QMC

Valuing Promissory Notes with Applicant as Lender

Determining the Resource Value of Promissory Notes in which the applicant is the Lender:

The Promissory note is a negotiable agreement:

Assume the resource value is the outstanding principal balance owed on the note unless verification is provided the note cannot be sold for that amount to a third party – at which time its resource value is the amount it can be sold for.

Cash, or real or personal property transferred to the borrower is no longer a resource unless the Lender can access the funds/property for his/her own personal use.

Payments received from the borrower against principal are considered unearned income in the month of receipt, and a resource if retained into the following month.

The Promissory note is bona fide but non-negotiable:

The Promissory note is a resource of the Lender, but the resource value is $0 as it cannot be sold.

Cash, or real or personal property transferred to the borrower is no longer a resource unless the Lender can access the funds/property for his/her own personal use.

Payments received from the borrower against principal are considered unearned income in the month of receipt, and a resource if retained into the following month. 

Missouri Department of Social Services Income Maintenance Manual.

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