What is the difference between a garnishment and an Administrative Wage Garnishment (AWG)?
Garnishment allows a creditor to recover from a debtor through an attachment of property in possession of a third party, and wage garnishment is when that property consists of the debtor’s wages in the hands of his or her employer.
Administrative wage garnishment (AWG) is a process in which a federal agency may collect delinquent nontax debt by garnishing the wages of a delinquent debtor without first obtaining a court order. 31 U.S.C. § 3720D(a); 31 C.F.R. § 285.11(d).
SBA may order your employer to pay SBA a portion of your disposable pay to satisfy delinquent non-tax debt you owe to the United States. This process is authorized by 31 U.S.C. 3720D.
In order to initiate the AWG process, Treasury’s Bureau of Fiscal Service (BFS) must send you written notice by first class mail to your last known address at least 30 days before effecting a garnishment against your wages or paycheck.
You must make a written request for a hearing within the 15th business day after BFS mailed the pre-garnishment notice. Untimely hearing requests are subject to the appointed Hearing Official’s decision on regarding whether the delay was caused by circumstances beyond your control.
If a hearing request is timely submitted, the Hearing Official will most likely provide you with a “paper hearing,” that is, the Hearing Official will decide the issues in dispute based upon a review of the written record. The Hearing Official will set a reasonable deadline for the parties to submit their respective documentary evidence.
The SBA is charged with the burden of proving the existence (legal enforceability) and the amount of the debt.
If the SBA meets its burden of production, then a shift occurs where you are required by law to demonstrate by a preponderance of the evidence that the debt is not legally enforceable, does not exist or that the amount of the debt is incorrect.
Additionally, you can present evidence that the terms of the repayment schedule are unlawful, would cause you a financial hardship, or that collection of the debt may not be pursued due to operation of law.
In order to mount a defense to the SBA debt, you need to conduct an investigation and obtain records from both the SBA and the Treasury Department. After obtaining the necessary records through the administrative discovery process, you should then research your legal defenses to the debt. This is not an easy process and you should not attempt to challenge an AWG notice without the benefit of legal counsel.
Our attorneys have challenged numerous AWG notices on behalf of SBA debtors throughout the country issued by Treasury’s Bureau of Fiscal Service and/or its assigns, including the Private Collection Agencies (PCAs) under federal contract with the government.
Click Sample AWG Decision to view a redacted PDF copy of an SBA Hearing Official’s Decision wherein our attorneys were successful in challenging the cross-referral of the SBA debt to Treasury’s BFS. One of the results from this particular case was that the “administrative fees, interest and penalties” that are statutorily automatically added to the principal SBA liability were removed and the client was then provided an opportunity to negotiate directly with the SBA through an Offer in Compromise or alternative workout.
If you are facing an Administrative Wage Garnishment stemming from an SBA debt that has been cross-referred to Treasury’s Bureau of Fiscal Service or a Private Collection Agency – do not attempt to “Do-It-Yourself” (DIY), contact us today for a FREE initial case evaluation with an experienced SBA or Treasury workout attorney at 1-888-756-9969.
We can analyze your SBA debt, Administrative Wage Garnishment (AWG) Notice, Treasury/BFS or Private Collection Agency problem and advise you on a range of potential solutions.
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