Bankruptcy impacting seller-financed property

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2 clients sold property a decade ago and owner financed the sale; one a business at $1.3 million, the other a home at $500 K, both at 5%.  Both were addressed on a schedule D the year of the sale, and interest received on the note was included on Schedule B in subsequent years.  Because of Covid-19 financial insolvencies, both buyers stopped making payments and filed bankruptcy (Chapters 11 and 7, respectively).  The home is considered secured and the seller is the only entity that will get anything, however, the note has been modified twice, once before and once after the bankruptcy was filed.  The owner incurred about $4000, in legal fees for representation in the bankruptcy.  Where are these fees deducted?  Hopefully, they can offset the interest received on Schedule B, or somehow be linked to the previously filed capital gains on the Schedule D for the year of the sale.  The worst place to deduct them is on Schedule A, because the standard deduction is higher than the deductions on Schedule A, even including the legal fees.  The business is even a worse situation, since the debt is being considered unsecured, and the principal balance is over $1 million and the seller is not likely to get anything from the courts, and is being forced to themselves file a Chapter 7 bankruptcy.  What happens to this huge loss ($3,000/yr will not be recovered for over 300 years)?