Page 213

SNAP CERTIFICATION MANUAL – SECTION 5000 5100 Income – Summary 5110 Bankruptcy

repossession, it becomes the legal property of the bank. Even if the bank sells the collateral (land, equipment, etc.) and uses the proceeds to pay off a business loan, the proceeds of the sale are not counted as income in the self-employment enterprise. When bankruptcy is declared, a creditor (or lender) may write off all or part of a loan or “forgive” the outstanding balance or the household’s current payment may be recalculated. If the amount due on a deductible expense (i.e., house payment) changes as a result of a bankruptcy, the worker will verify the amount currently incurred for the expense. The current amount will be used in the SNAP budget. Past due amounts will not be allowed even if included with current payments or even if paid through the court directly to the creditor. See SNAP 6710. A bankruptcy settlement normally states the household’s resources, which resources will be disposed to cover the household’s debts and under which conditions the household may retain other resources. If there are questions about whether resources retained by the household are accessible, a legal opinion should be requested through normal channels.

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Page 213

Official source

SNAP CERTIFICATION MANUAL – SECTION 5000 5100 Income – Summary 5110 Bankruptcy

repossession, it becomes the legal property of the bank. Even if the bank sells the collateral (land, equipment, etc.) and uses the proceeds to pay off a business loan, the proceeds of the sale are not counted as income in the self-employment enterprise. When bankruptcy is declared, a creditor (or lender) may write off all or part of a loan or “forgive” the outstanding balance or the household’s current payment may be recalculated. If the amount due on a deductible expense (i.e., house payment) changes as a result of a bankruptcy, the worker will verify the amount currently incurred for the expense. The current amount will be used in the SNAP budget. Past due amounts will not be allowed even if included with current payments or even if paid through the court directly to the creditor. See SNAP 6710. A bankruptcy settlement normally states the household’s resources, which resources will be disposed to cover the household’s debts and under which conditions the household may retain other resources. If there are questions about whether resources retained by the household are accessible, a legal opinion should be requested through normal channels.