When calculating the maximum permitted loan after a loan is defaulted, I can't remember if I should add the current value of the defaulted loan (like I would a active loan) to the investment balance before applying 50%? Example: Ptp defaulted on loan in 2015 and has no other loan. The defaulted loan value after adjusting for interest through today is $2000. His vested investment balance today is $20,000. Is his maximum available loan:
A. $9000 = [($20,000 + $2000) *50%] = $11,000 - $2000
or
B. $8000 = ($20000 * 50%) = $10,000 - $2000