SBA Debt Attorneys

Under the Federal Statute of Limitations Act (28 U.S.C. 2415(a)), an action by the Government to recover upon a contract for money damages is barred unless filed within 6 years from the date the cause of action accrued. The date of the accrual of the cause of action may be subject to various interpretations. However, in the event of partial payment or written acknowledgement of the debt, the cause of action again accrues at the time of the partial payment or acknowledgement. 28 U.S.C.A. § 2415(a).

To determine if an SBA OIC is possible the following information must be provided;• A completed and signed SBA Form 1150 Offer in Compromise which outlines the terms of the offer and why the offer is being made. Be sure to address all the items on the forms “Instructions for Presenting the Offer” and “Elements of a Workable Compromise Offer.” You should also discuss the settlement arrangements that are being made with other creditors.• All offeror(s) must complete and sign an SBA Form 770 Financial Statement of Debtor and provide copies of the most recent two years of personal IRS Tax returns (or a copy of the Extension if not filed). The SBA Form 770 will be reviewed and compared with the original SBA Form 413 “Personal Financial Statement” completed at the time of loan approval. Valuations of property subject to judgment must be supported.• Copy of a current paystub if you are employed.• Additional information may be necessary depending on the individual circumstances of the transaction.

If your SBA loan is in default and you are working with your lender to wind down the business and settle the deficiency with an offer in compromise, time is of the essence. Banks generally do not wait much longer than 60-90 days after the defaulted borrower (business) has been liquidated or shut down to tender an OIC to the SBA for consideration which, if accepted, could potentially release the guarantors from the deficiency for a lesser amount. Generally speaking, the bank or CDC will send you what is commonly known as a Notice of Default, Acceleration and Demand for Payment for the entire loan balance due. If litigation is not a fiscally viable option and after certain collateral liquidation, you may be offered the chance to submit an SBA OIC with the bank or CDC for SBA consideration. If your case is ultimately transferred to the SBA, you should receive a 60-day Official Notice and demand for payment. If you fail to timely submit an SBA OIC within the administrative time frame as noted in this letter, the SBA will then refer your debt to the U.S. Department of Treasury for enforced collection, and thus, you will probably lose your one (1) time shot to settle for less than what is purportedly owed on the SBA debt through the SBA Offer in Compromise process..It should be noted that Treasury rarely collects on these bad loans directly – rather they hire private collection agencies (PCAs) to handle this. These PCAs don’t know anything about the history behind the loan – their job is to be ruthless in their collection endeavors as they generally receive a generous percent of the collected amount or actually bought the so-called junk federal debt for pennies on the dollar. Several of these federally approved private collection agencies or junk debt buyers are particularly nasty, and rarely settle for less than 50% of the outstanding amount as the incentives for collection, litigation and judgment pursuit are very high. Contrast that with the results that we have reviewed and settled and it’s easy to see the importance of addressing your outstanding SBA debt sooner rather than later, whether you’re working with a non-attorney consultant, an SBA Attorney or Federal Agency Practitioner, or attempting to do it yourself. If you think your banker is nasty or difficult to work with, you don’t want to experience the tactics of these collection agencies or junk debt buyers.

Each individual SBA OIC will be based on a case by case review of the Borrower’s or Guarantor’s individual financial situation and certain “litigative risks.” Factors that will be considered are:• An assessment of the debtor’s ability to pay and potential earnings capacity• Health and life expectancy• Local economic conditions• Equity in pledged or reachable assets• Settlement arrangements with other creditors• Applicable exemptions available to debtor under State and Federal law• The cost, time and risk of collection litigation

What Is The SBA Office Of Hearings And Appeals (OHA) And What Is Their Jurisdictional Power? CollapseThe Office of Hearings and Appeals (OHA) is an independent office of the Small Business Administration (SBA) established in 1983 to provide an independent, quasi-judicial appeal of certain SBA program decisions. The SBA OHA has authority to conduct proceedings in the following cases: Collection of debts owed to SBA and the United States under the Debt Collection Act of 1982, the Debt Collection Improvement Act of 1996, and part 140 of the aforesaid chapter; (t) Any other hearing, determination, or appeal proceeding referred to OHA by the Administrator of SBA, either through an SOP, Directive, Procedural Notice, or individual request by the Administrator to the SBA/OHA. The SBA OHA’s office is on the eighth floor of SBA headquarters above the Federal Center SW metro stop. Their office address is: 409 Third Street, SW, Eighth FloorWashington, DC 20416