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Are loans from friends income?

I have the good fortune to have a few friends who will loan me money for rent and expenses through BK, with payments and interest to begin 1 year after I get out of Bk. Assuming that we write up appropriate promissory notes (should we notarize them?), would those borrowed monies be considered income or surplus income? Thx Hard times for a lot of these days…

Posted from: British Columbia

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One Response to “Are loans from friends income?”

A licensed trustee said...

Borrowed money is NOT considered income – the trick is to convince your trustee (and the Court) that they are loans and not a gift. If the amoutn you are lving on is less than the governmetn threshold the question is moot (becuase you won’t owe any surplus income payments). If you require more than the threshold to live then things might get interesting.

Your best bet is to discuss this with your trustee BEFORE you decide to file…