SBA OIC: Deferment v. Liquidation
Dealing with an SBA OIC case can be hard, this is why you should allow one of our lawyers to settle your SBA debt. Talk to us about your SBA loan default.
The federal government can garnish up to 15% of your paycheck without first obtaining a civil court judgment. This can strike at the heart of your finances.
Book a Consultation CallThis percentage may seem modest, but it can accumulate quickly, especially for those living paycheck to paycheck. The administrative wage garnishment process allows the government to take a portion of your paycheck without first obtaining a civil court judgment. As such, the SBA or other creditor agencies must give you notice thirty days in advance and an opportunity to request a hearing or negotiate a payment plan. Courts have interpreted the six-year statute of limitations for actions for monetary damages as applicable only to lawsuits filed in court. It does not apply to non-judicial collection methods, such as administrative wage garnishment.
Administrative wage garnishment can hamper your finances. Unless you agree in writing to a higher amount, the government can garnish your disposable pay up to 15%. It's crucial to understand that “disposable pay” is calculated after mandatory deductions, so knowing your deductions can help you estimate the true impact of garnishment. Federal law also limits total garnishments to 25% of disposable pay. Therefore, if you have other garnishments, the total of all garnishments, including the federal government, cannot exceed 25%.
"Disposable pay" means your pay after the deduction of health insurance premiums and any amount required by law to be withheld. Such amounts include Social Security taxes, withholding taxes, Medicare, etc. Therefore, if you had a previous garnishment of 15% in place and then the government obtained an administrative wage garnishment order against you, the administrative wage garnishment would be limited to an additional 10% of your income. Taking 15% of your paycheck can really affect your ability to pay your bills, raise your kids, and save for retirement. Many individuals do not realize that even small garnishments can drastically impact your budgeting and future financial goals, making it imperative to take action if you receive notice of garnishment.
As soon as you receive the notice of intended administrative wage garnishment, you must request a hearing. Alternatively, you can contact the Treasury and arrange for a payment plan. If you request a hearing timely, an administrative wage garnishment cannot start until you've had a chance to present your case. Be proactive; it’s essential to keep records of all communications and ensure prompt submission of your hearing request to avoid complications. If you fail to submit a hearing request promptly, the administrative wage garnishment will start.
Going forward, you may present evidence that you don't owe the debt, the debt is not enforceable, or the amount of the debt is incorrect. Also, you may present evidence that an administrative wage garnishment would cause financial hardship if implemented. Lastly, if you were involuntarily terminated from your previous job and have been currently employed for less than 12 months, a wage garnishment cannot proceed. It’s advised to gather any documentation that supports your claims, as this information will be crucial for your defense.
You will need to file a brief with facts, evidence, and legal support for your position, as well as financials if you claim financial hardship. To that end, our assertive attorneys have represented clients all over the country in administrative wage garnishment hearings. Protect Law Group has the experience obtaining the necessary evidence and presenting your defenses. With the right legal representation, you can navigate this challenging situation more effectively and work toward a favorable resolution.
Contact our office today and one of our attorneys will discuss your matter with you at no cost.
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.
Client received the SBA's Official 60-Day Notice for a loan that was obtained by her small business in 2001. The SBA loan went into default in 2004 but after hearing nothing from the SBA lender or the SBA for 20 years, out of the blue, she received the SBA's collection due process notice which provided her with only one of four options: (1) repay the entire accelerated balance immediately; (2) negotiate a repayment arrangement; (3) challenge the legal enforceability of the debt with evidence; or (4) request an OHA hearing before a U.S. Administrative Law Judge.
Client hired the Firm to represent her with only 13 days left before the expiration deadline to respond to the SBA's Official 60-Day Notice. The Firm attorneys immediately researched the SBA's Official loan database to obtain information regarding the 7(a) loan. Thereafter, the Firm attorneys conducted legal research and asserted certain affirmative defenses challenging the legal enforceability of the debt. A written response was timely filed to the 60-Day Notice with the SBA subsequently agreeing with the client's affirmative defenses and legal arguments. As a result, the SBA rendered a decision immediately terminating collection of the debt against the client's alleged personal guarantee liability saving her $50,000.
Our firm successfully facilitated the SBA settlement of a COVID-19 Economic Injury Disaster Loan (EIDL) where borrower received an SBA disaster loan of $150,000, but due to the severe economic impact of the COVID-19 pandemic, the business was unable to recover.
Despite the borrower’s efforts to maintain operations, shutdowns and restrictions significantly reduced the customer base and revenue, making continued operations unsustainable. After a thorough business closure review, we negotiated with the SBA, securing a resolution where the borrower paid only $6,015 to release the collateral, with no further financial liability for the owner/officer.
This case demonstrates how businesses affected by the pandemic can navigate SBA loan settlements effectively. If your business is struggling with an SBA EIDL loan, we specialize in SBA Offer in Compromise (SBA OIC) solutions to help close outstanding debts while minimizing financial burden.
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