Louisville Short Sale Expert: Helping You Avoid Foreclosure

Intriguing Legal Question About HAFA Short Sale $3,000 Incentive While In Bankruptcy

Do the sellers keep the $3,000 or do the creditors get it?

Sellers are in Chapter 13 Bankruptcy.
We are submitting their short sale as a HAFA short sale.
If the HAFA short sale is approved, the lender will provide a $3,000 relocation assistance incentive to the seller.

My question is:

Will the sellers be able to keep the $3,000 now or will the bankruptcy court distribute it to the creditors?

Note: There is a concept called Homestead Exemption, but since I’m not a lawyer I don’t know if it applies.

I am always intrigued and excited when a situation arises that I don’t have an immediate answer. It is an opportunity to learn and hone my craft.

I will also pose the question to the seller’s bankruptcy attorney. The sellers were also instructed to consult their attorney.

If any readers are lawyers or have knowledge of this situation – please join the conversation!

Thanks – Dave

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