HRS §651-123
How the money from a forced sale is divided
When property is sold to pay a debt, the money is used in a set order: first to the owner's exemption, then costs and fees, then the debt that caused the sale, then any later debts, and any leftover goes to the owner. The sale wipes out later debts but does not affect earlier ones.
courtscreditorsdebtors
The statute, as written — Application of proceeds of sale
When the property thus taken is sold, which sale shall be subject to all prior liens and encumbrances, the proceeds of the sale thereof shall be applied in the following order of priority: first, to the defendant to the amount of the exemption, if any; second, to the satisfaction of the execution costs, attorney's and appraiser's fees, and any other fees that may necessarily arise; third, to the satisfaction of the lien under which the sale is made; fourth, to the discharge of any subsequent liens and encumbrances according to their priority; and fifth, the balance, if any, to the defendant. The sale shall operate to extinguish subsequent liens and encumbrances without forcing prior lienors and encumbrancers to their right of recovery.
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