How Protect Law Group Can Help Your Small Business Achieve Loan Forgiveness
Learn how Protect Law Group's SBA Attorneys in San Diego, Orange, and Los Angeles Counties can assist your small business in achieving loan forgiveness. Contact us!
We Provide Nationwide Representation of Small Business Owners, Personal Guarantors, and Federal Debtors with More Than $30,000 in Debt before the SBA and Treasury Department's Bureau of Fiscal Service
No Affiliation or Endorsement by any Federal Agency
Owe more than $30,000? If yes, we can provide you realistic solutions to SBA loan problems and US Treasury Debt Collection Tactics.
The SBA Attorneys in our office want to help you resolve your SBA debt situation. No matter how difficult your circumstances may seem, the right SBA debt attorneys can assist you.
We understand that you may have questions regarding a wide range of federal agency matters, including how to respond to an SBA demand letter, what SBA loan foreclosure actually entails, and what is a Treasury Offset Program levy.
Our SBA Attorneys can explain all of these topics and more. We urge you to review our disclaimer and blog to learn more about subjects that may be confusing to you and to contact us right away if you have specific questions relating to your unique circumstances.
We look forward to helping you during this difficult and stressful period of your life.
Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure
Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements
Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.
Clients' 7(a) loan was referred to Treasury's Bureau of Fiscal Service for enforced collection in 2015. They not only personally guaranteed the loan, but also pledged their primary residence as additional collateral. One of the clients filed for Chapter 7 bankruptcy thinking that it would discharge the SBA 7(a) lien encumbering their home. They later discovered that they were mistakenly advised. The Firm was subsequently hired to review their case and defend against a series of collection actions. Eventually, we were able to negotiate a structured workout for $180,000 directly with the SBA, saving them approximately $250,000 (by reducing the default interest rate and removing Treasury's substantial collection fees) and from possible foreclosure.
Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’s ureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
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.
SOP 50 51 2A, Ch. 17, 8-12 states that “[a]ny settlement amount must bear a reasonable relationship to the present value of the estimated amount of recovery available through foreclosure (using a forced sale equivalent value) and enforced collection. This value, combined with the earning potential of the debtor, will form the basis for the offer in compromise.“ Litigative risks” involve answering certain legal questions as to the actual liability of the debtor and will be thoroughly explored by the SBA, if raised properly. The degree of doubt coupled with the potential costs, expenses and time involved in pursuing collection matters will generally determine the acceptable amount for a settlement. Thus, when considering an SBA OIC, it is very important for your qualified representative (who should have a background in litigation and thus be an attorney and have a working knowledge of SBA matters) to be able to advise SBA debtors regarding litigative risks and the costs associated with litigation and how all of these factors can impact the proposed offer to the Federal Government.
An SBA Guaranteed Loan with multiple personal guarantors considers each of the guarantors as being “jointly and severally” liable for the loan balance. This means that anyone who signed the loan as a borrower, obligor or a guarantor, is liable for the entire outstanding balance. Therefore, each and every guarantor can be pursued for the total loan balance. The problem that manifests with multiple guarantors after an SBA loan default is when certain individuals have more personal assets than others. Generally, lenders, the CDCs and the SBA target those personal guarantors who may have more assets than others. Hence, those individuals whose personal guarantees are “worthless” will generally not have to pay as much.
Yes. The Agency Practice Act (5 U.S. Code Section 500 et seq.) specifically authorizes attorneys in good standing of the bar of the highest court of their State to represent you before the U.S. Small Business Administration, the U.S. Department of Treasury and the Bureau of Fiscal Service. However, if you decide to hire a non-attorney firm or consultant to handle your SBA matter before the aforesaid federal agencies, be advised that this non-attorney firm or consultant are in violation of the Federal Agency Practice Act, and cannot advise you on any legal issues. The problem we have with non-attorney representation for SBA matters in this industry is that we do not believe these non-attorneys have the legal authorization and ability to advise or counsel you on any interpretation of SBA administrative law (such as the SBA’s SOPs, the Code of Federal Regulations (CFRs), SBA OHA decisions, bankruptcy issues, federal/state statutory law or federal case law). In addition, many of these non-attorney representatives are neither affiliate members of NADCO, NAGGL (SBA trade associations) nor authorized to practice before the Department of Treasury pursuant to the Agency Practice Act and Circular 230. Finally, in the event that you need to appeal your case to the SBA Office of Hearings and Appeals in connection with your SBA debt or any adverse decision that may be considered an abuse of discretion, the non-attorney representatives will NOT be able to cite to legal precedent or argue applicable law before the SBA’s Administrative Law Judge (ALJ) as any attempt on their part would arguably be the unauthorized practice of law, and would be useless since these non-attorneys wouldn’t have any clue as to how to proceed with representing your interests in this special forum as these individuals do not have the education, training or experience to administratively litigate your case and protect your interests.
An SBA Offer in Compromise is generally on out-of-court work out option for a business which probably needs to shut down and there is no reasonable turnaround plan that can be executed to resurrect it from its current financial quandary. Furthermore, this remedial option is best utilized when it is apparent that the business’s pledged collateral is insufficient to pay off the outstanding loan balance and the personal guarantees of the owners are at stake.