O.K.  For starters, you just might a have a deal.  You won’t really know for sure until you get further along in this thing. 

On the one hand, you might be able to put a good chunk of change in your pocket & help these people out if you persist in this deal. 

On the one hand, you might look at the work involved in this type of situation and say – too much work & hassle for a paycheck that may or may not happen.  I’ll get into what’s going to have to happen for that to come true in a just a moment.

There is an inner game and an outer game to doing any short sale.  The inner game is a balance of your desire to help these people out, and to make a profit from the situation.  If you don’t have a good feeling about making money from this situation, you probably won’t be successful.  Know that you ARE there to help them out.  If you don’t help them, they will either loose the house take a bigger hit, or some scam artist is going to get ahold of them. 

The outer game is all the steps involved in walking them through the short sale. 

My advice to you in this situation is to take it as far as you can on as little actual work on your part as possible.  What you’ll find is that a short sale can take a ton of time and still not go anywhere. 

Your first step will be to start working with the lender on putting a short sale together, just like you would any other.  Get the authorization to release information.  Have them start gathering together their paperwork.  Part of this will be to get a contract with the sellers. 

At the same time, contact the trustee for the bankruptcy.  Let them know you are planning to work with the owners to get the house sold.  Verify with the trustee that he or she will release the property from the bankruptcy. 

The next step is to find a buyer for the property.  Get a contract with the them to buy the property as is. 

Once you have a buyer, set up a closing with the title company. 

So I would arrange to meet with the sellers and lay out their options.  Share with them how you think you can help, and get the short sale started.  I think you will find out early on if this going to be nothing but a dead end.