Small business owners could acquire assistance through local attorneys. This assistance could prevent them from suffering through financial ruin. It presents them with the opportunity to gain an SBA Offer in Compromise. These options could eliminate the possibility of seizure and foreclosure.
An SBA loan default occurs when the borrower is more than ninety days delinquent on their loan. After the loan is in default, the lender has the right to begin the seizure of the identified collateral. The collateral is any property or assets used to secure the loan. It is primarily the building or machinery that was purchased through the funds provided by the loan.
A default could also lower the borrower's credit score. This could make it difficult for the company to acquire new lines of credit. It could make it impossible for them to acquire a low-interest loan for business purposes.
Once the borrower acquires the SBA demand letter, they must take immediate action. Any failure to take action could lead to negative legal action. This could include the foreclosure of the property or a lawsuit to collect the full balance of the loan.
The borrower should contact an attorney to evaluate their options. The attorney could determine if an SBA offer of compromise is possible. This opportunity could allow the borrower to pay a small value without suffering the negative consequences of default.
An SBA loan foreclosure could lead to the end of the company. If the business owner loses their property through foreclosure, it is not likely that they will receive another loan. This could prevent them from reopening their doors after the settlement offer is accepted.
Local small business owners need help reducing the negative impact of a default. An attorney helps them with these opportunities by determining if an SBA offer in compromise is available to them. This opportunity could reduce the full value of the loan and make it more affordable. Business owners who wish to enter into a Tax Offset Program or acquire an offer in compromise should contact an attorney now.
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 an SBA 7(a) loan for $100,000 from the lender. The SBA loan went into early default in 2006 less than 12 months from disbursement. The SBA paid the 7(a) guaranty monies to the lender and subsequently acquired the deficiency balance of about $96,000, including the right to collect against the guarantor. However, the SBA sent the Official 60-Day Due Process Notice to the Client's defunct business address instead of his personal residence, which he never received. As a result, the debt was transferred to Treasury's Bureau of Fiscal Service where substantial collection fees were assessed, including accrued interest per the promissory note. Treasury eventually referred the debt to a Private Collection Agency (PCA) - Pioneer Credit Recovery, Inc. Pioneer sent a demand letter claiming a debt balance of almost $310,000 - a shocking 223% increase from the original loan amount assigned to the SBA. Client's social security disability benefits were seized through the Treasury Offset Program (TOP). Client hired the Firm to represent him as the debt continued to snowball despite seizure of his social security benefits and federal tax refunds as the involuntary payments were first applied to Treasury's collection fees, then to accrued interest with minimal allocation to the SBA principal balance.
We initially submitted a Cross-Servicing Dispute (CSD) challenging the referral of the debt to Treasury based on the defective notice sent to the defunct business address. Despite overwhelming evidence proving a violation of the Client's Due Process rights, the SBA still rejected the CSD. As a result, an Appeals Petition was filed with the SBA Office of Hearings & Appeals (OHA) Court challenging the SBA decision and its certification the debt was legally enforceable in the amount claimed. After several months of litigation before the SBA OHA Court, our Firm Attorney successfully negotiated an Offer in Compromise (OIC) Term Workout with the SBA Supervising Trial Attorney for $82,000 spread over a term of 74 months at a significantly reduced interest rate saving the Client an estimated $241,000 in Treasury collection fees, accrued interest (contract interest rate and Current Value of Funds Rate (CVFR)), and the PCA contingency fee.
The client personally guaranteed an SBA 504 loan balance of $375,000. Debt had been cross-referred to the Treasury at the time we got involved with the case. We successfully had debt recalled to the SBA where we then presented an SBA OIC that was accepted for $58,000.
Clients personally guaranteed an SBA 7(a) loan that was referred to the Department of Treasury for collection. Treasury claimed our clients owed over $220,000 once it added its statutory collection fees and interest. We were able to negotiate a significant reduction of the total claimed amount from $220,000 to $119,000, saving the clients over $100,000 by arguing for a waiver of the statutory 28%-30% administrative fees and costs.
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