SBA SOP 50 51 3- Classifying Loans in Liquidation
Blog article by expert SBA workout attorneys from Protect Law Group, APC regarding SBA loans classified in liquidation status and how lenders begin the process
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 CallThe 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 agency must give your 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 money 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%. 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 pay check can really affect your ability to pay your bills, raise your kids and save for retirement.
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. If you fail to submit a hearing request in a timely matter, 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 be a 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.
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.
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.
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. Client received the SBA's Official 60-Day Notice with the debt scheduled for referral to 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 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.
Client personally guaranteed SBA 504 loan balance of $375,000. Debt had been cross-referred to 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.
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.
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