That was the tenant's money under the property manager's care.When the bankruptcy happened, that money should not be affected by other debtors trying to collect.

Would it be just more debt or would it be for down payment for an investment property?

You may want/need to pay off the debt or maybe not, it's part of a great plan.2.

As I understand it in a Ch 13 the debtor/bankrupt files a plan with the court which describes how the debtor will repay the creditors. 

What's the process of getting approval for the sale (ie: does each debtor get a vote, does the bankruptcy judge need to approve it, etc.?)

Should I have the house signed over to me first before I pay the settled price that I now have with the debtor?

Lenders repossessed around 7,000 properties in the first quarter of 2021, 87% fewer than in the same period in 2020, even though the share of mortgage debtors that were behind on their payments spiked to a high not seen since the global financial crisis (see chart 3).

They may need credit at some point going forward and will need to pay off the judgment.It's a shame that society makes it harder to require debtors to pay than for businesses to collect. 

Do not incur any additional debt or make any major purchases.

Not nearly as much debt (or equity) sloshing around in this space.