What is the situation that Eliza has found herself in. What is the atmosphere that is created in the chapter VII? Is it sympathy towards Eliza and her son?

It is hard not to feel anything but sympathy for the slaves in this book including Eliza. The main theme of this chapter is the bond between a mother and her child. Another important theme is Eliza's reliance upon God. Her Christian masters have betrayed her by selling her son, and now she in turn feels she is betraying her duty of loyalty to them. Nevertheless, her love for her son outweighs all other commitments, and so Eliza is transformed from a passive, unquestioning servant to a defiant and courageous woman. Thus, the only help she can now trust is divine intervention, as Stowe reveals through the prayers Eliza utters as she runs: "Lord, help! Lord, save me!"

Indeed, the details of Eliza's flight are quite melodramatic. She runs all night, screaming to the heavens, and the whole while her innocent child sleeps with his "small, soft arms trustingly holding on to your neck." Stowe's purpose in over-emphasizing the drama and emotion of each scene is to create a sense in the reader that this is a novel about good and evil. She has to convince her readers, many of whom did not disagree with slavery, that Eliza and her son deserve to be free and Haley is a villain for wanting to own them.