When facing financial challenges, it's crucial for small business owners to understand their options regarding small business bankruptcy. Two common bankruptcy filings for small businesses are Chapter 7 and Chapter 11. At Protect Law Group, we specialize in negotiating compromises and repayment plans with the Small Business Administration (SBA) on your behalf and we have successfully resolved millions of dollars in SBA debt.
In this blog, we'll discuss the differences between these bankruptcy types and explore the role of Small Business Administration (SBA) programs such as SBA loan forgiveness and SBA debt relief. We'll also touch on the SBA debt relief extension and how it can benefit struggling businesses.
Chapter 7 bankruptcy, also known as liquidation, is a process where a business ceases operations, and its assets are sold to pay off outstanding debts. This type of small business bankruptcy is suitable for businesses that cannot continue operating due to their financial struggles.
In contrast, Chapter 11 bankruptcy is a reorganization process that allows businesses to continue operating while restructuring their debts. This form of small business bankruptcy is ideal for companies with a viable business model that requires financial reorganization to become profitable again.
Another essential aspect to consider when navigating Chapter 7 or Chapter 11 small business bankruptcy or seeking SBA debt relief is negotiating a repayment plan with creditors. A well-negotiated repayment plan can ease financial burdens and allow businesses more time to recover and regain their footing. In some cases, this could even help avoid small business bankruptcy altogether.
When negotiating a repayment plan, it's vital to be transparent with your creditors and attorneys about your business's financial situation and your ability to make payments. By working closely with your creditors and demonstrating your commitment to repaying your debts, the lawyers at Protect Law Group may secure more favorable terms, such as reduced interest rates or extended payment periods.
Additionally, exploring options like SBA debt relief and SBA loan forgiveness can complement these negotiations, further strengthening your business's financial position.
SBA loan forgiveness programs, such as the Paycheck Protection Program (PPP), can alleviate the financial burden on small businesses by forgiving a portion or the entire loan amount, provided specific criteria are met. When a business qualifies for SBA loan forgiveness, it can prevent the need for small business bankruptcy by reducing the debt load.
It's important for business owners to understand the requirements of SBA loan forgiveness programs and seek assistance from professionals like the attorneys at Protect Law Group to maximize their chances of receiving loan forgiveness, potentially avoiding small business bankruptcy altogether.
If you have received a 60-day notice of repayment from the SBA and are considering Chapter 7 or Chapter 11 bankruptcy, call our office first!
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 personally guaranteed an SBA 504 loan balance of $337,000. The Third Party Lender had obtained a Judgment against the clients. We represented clients before the SBA and negotiated an SBA OIC that was accepted for $30,000.
Clients borrowed and personally guaranteed an SBA 7(a) loan. Clients defaulted on the SBA loan and were sued in federal district court for breach of contract. The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan. We were subsequently hired to intervene and aggressively defend the lawsuit. After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.
Small business sole proprietor obtained an SBA COVID-EIDL loan for $500,000. Client defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for aggressive collection. Treasury added $180,000 in collection fees totaling $680,000+. Client tried to negotiate with Treasury but was only offered a 3-year or 10-year repayment plan. Client hired the Firm to represent before the SBA, Treasury and a Private Collection Agency. After securing government records through discovery and reviewing them, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury citing a host of purported violations. The Firm was able to negotiate a reinstatement and recall of the loan back to the SBA, participation in the Hardship Accommodation Plan, termination of Treasury's enforced collection and removal of the statutory collection fees.
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