I'm not a lawyer so Aaron, or anyone for that matter, please correct me if I'm wrong.
Basically, you MAY be able to keep your existing residence but as for selling it and using any proceeds to purchase another, that is pretty much out of the question. If your home equity is larger than the state's homestead exemption, you may lose the home. If not, you may be able to reaffirm the mortgage or keep making payments on the existing mortgage. However, if you fail in your payments, the home may be foreclosed on.
If the trustee were to sell the property, any gains would most likely be used to pay off the secured debt that remains; you would not be given the proceeds for a down payment on another residence.

