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Loans
Exempt
Loans are exempt as property in the month in which they are any of the following:
- Exempt as income from student loans and grants
- Exempt student loans and grants remain exempt even if the time which they were intended to cover has passed. The client must produce evidence of the source of the funds and show that expenses during the above time period did not exceed the amount of the loans and grants.
- Treated as income in the month of receipt, because no repayment is required.
Nonexempt
Loans which require repayment are included in the property reserve beginning the month of receipt.
Exception: Student loans and grants which must be repaid are exempt.
Verification
A statement from the borrower and the lender which documents:
- The amount of the loan.
- The conditions of the loan, e.g., timetable or plan for repayment.
- The acknowledgment by the borrower of their intent to repay and method of repayment (i.e., anticipated income or the pledge of collateral).
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