Looking for SBA debt relief options? Click here to find out how submitting SBA offers in compromise can reduce your non-tax debt!
Book a Consultation CallWhen you got the SBA loan, you had every intention of paying it back. Unfortunately, you are now struggling just to keep yourself and your business afloat. However, some viable options existif you need SBA debt relief.
Some of these options you may not have even heard of yet. One of them that is used with more success than not is when you submit an offer of compromise. Submitting an offer in compromise is just one way to relieve some of your ongoing business and financial pressure.
You may also negotiate with your lender so you can create a workout agreement that is better suited to your new financial circumstances. Please keep reading if you want to learn more about submitting an offer in compromise and how it can reduce your non-tax debt.
It is actually quite normal for small businesses to struggle to repay their debts. The Bureau of Labor reports that 20% fail in their first year. 50% of small businesses fail by their fifth year.
This is why the SBA approves millions of dollars in loans and guarantees each year. They want to ensure that you have every opportunity to succeed and grow. When you struggle to pay back your SBA loan, you can even seek SBA debt relief.
One option when seeking debt relief is to submit an offer in compromise to the SBA. The SBA will review your circumstances and determine if they accept or deny your offer. To help you better understand how submitting an offer of compromise can relieve some of your SBA debt, here are some strategies that explain the process.
As a personal guarantor, if your business defaults on an SBA loan you remain personally liable. The SBA offer in compromise program allows personal guarantors to pay less than the full amount of the debt to settle. However, your business must be closed to take advantage of the offer in compromise. The SBA has made exceptions, but it's a rare thing for them to do.
On top of closing your business, you need to consult with a legal representative for you to get the best shot at the SBA approving your offers in compromise program.
Your SBA Offer in Compromise Attorney can help you navigate the offer in compromise waters.
Overall your offer in compromise should be presented to the SBA in a compelling manner and be numbers-driven. The numbers must be factual and backed up by documents. The numbers also need to demonstrate to the SBA that they cannot get the loan money you owe them.
It understandable that small business owners turn to the SBA when they need to start or grow their business. But if your business begins to fail, the SBA loan debt is now an issue. Now that you're facing SBA loan debt, it is usually necessary to liquidate the business assets.
Unfortunately, the liquidation often fails to cover the balance of the loan. As such, any deficiency falls on you, the personal guarantor.
The SBA, via the Department of Treasury, could order your employer or the IRS to garnish any disposable pay to satisfy the delinquent non-tax debt you owe to the United States if you defaulted on an SBA loan. They do this through the Administrative Wage Garnishment (AWG) process. SBA debtors do have the right to have an official hearing if they receive a notice of intended AWG.
Using experienced counsel to present evidence and legal arguments in your defense will increase your chances of defeating the AWG.
The SBA loan default statute of limitations consists of the amount of time that a lender has to sue a borrower for defaulting on their loan. The law varies depending on where the borrower lives.
However, once the SBA or the Treasury service your debt, no statute of limitations exists as to administrative remedies such as administrative wage garnishment, tax refund offset or Social Security offset. A six year statute of limitations applies to the government's ability to sue you for breach of contract / guarantee. However, this only applies to filing a law suit, it does not apply to administrative remedies.
The SBA lenders can provide loan deferments to borrowers when they want to modify or suspend their payments for a time. Loan deferments can be for a little as 3 months.
SBA Attorneys range from providing SBA loan default expertise to helping you with your SBA offers in compromise.
An assertive attorney experienced in Offer in Compromise cases can help you settle an SBA loan.
Reach out to Protect Law Group. Protect Law Group can make a difference in your SBA debt relief case. Having someone dedicated to helping you settle an SBA debt relief case will help you turn the page so you can move forward with the rest 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.
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’sBureau 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.
The clients are personally guaranteed an SBA 7(a) loan. The SBA referred the debt to the Department of Treasury, which was seeking payment of $487,981 from our clients. We initially filed a Cross-Servicing Dispute, which was denied. As a result, we filed an Appeals Petition with the SBA Office of Hearings and Appeals asserting legal defenses and supporting evidence uncovered during the discovery and investigation phase of our services. Ultimately, the SBA settled the debt for $25,000 - saving our clients approximately $462,981.
The client personally guaranteed an SBA 7(a) loan for $150,000. His business revenue decreased significantly causing default and an accelerated balance of $143,000. The client received the SBA's Official 60-day notice with the debt scheduled for referral to the Treasury’s Bureau of Fiscal Service for aggressive collection in less than 26 days. We were hired to represent him, respond to the SBA's Official 60-day notice, and prevent enforced collection by the Treasury and the Department of Justice. We successfully negotiated a structured workout with an extended maturity date that included a reduction of the 14% interest rate and removal of substantial collection fees (30% of the loan balance), effectively saving the client over $242,000.
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