SBA Debt Attorneys

Charge off is the process by which the SBA recognizes a loss and removes the uncollectible loan account from its active receivable accounts. The SBA’s policy is to be diligent and thorough in collection of federal debt and to promptly charge off all uncollectible accounts to more accurately reflect the status of the individual account and the Agency’s entire portfolio. It should be noted that a charge off is merely an administrative determination that does NOT affect SBA’s rights against any obligor nor reduce the SBA’s (or a participant lender’s) ability to proceed with any available remedy.

Filing fees with the court may vary but as of the time of this writing the filing fees are $1,738.

Attorneys' fees will vary on the complexity of your case but will be in the $15,000 to $25,000 range in most cases.

Under a regular Chapter 11, attorneys' fees were usually a minimum of $50,000.

When you fail to make payments on your SBA loan, the bank or CDC will start contacting you asking for payment. Eventually, if non-payment continues, and you fail to cure the “default”, the bank or CDC may seek to collect on its collateral. This could include monies contained in an account housed at the same bank, your account receivables, your business equipment, real estate, even your home if you used a mortgage beyond the homestead exemption limits. You can expect that the bank or CDC will aggressively seize pledged collateral because the SBA requires the lender or CDC to take all appropriate steps to collect as much of the debt as it can before tendering a claim to the SBA for the balance. And if the United States Department of Treasury receives your account, then you can expect more aggressive collection action, and possibly, full-fledged litigation.

A compromise with one or more Obligors does not release the continuing liability of any remaining Obligors. Each entity or individual responsible for the debt must develop its/his/her own SBA OIC.

Creditors' committees commonly occur in traditional Chapter 11 cases, but they need a cause in Subchapter V cases.

Subchapter V trustees' primary function is to create a standard plan with the debtor and creditor. They do have the authority to audit the debtor's finances, but their primary purpose is mediation.

The reason for this is Congress sees impartial third-parties' increasing the likelihood of a sound resolution among the debtor and its creditors. Unbiased third parties are especially useful for small businesses whose creditors are tentative as a result of COVID.