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Treasury Department’s authority to refer SBA debt cases to the Department of Justice for collection litigation

Department of the Treasury Bureau of Fiscal Service Power to Refer SBA debt to the Department of Justice for collection by litigation

Video Transcript:

 

The transcript of the video follows below for further review.

When an SBA debt case is referred for Department of Justice collection litigation, it is first routed to the National Central Intake Facility located in Washington, D.C. for processing. After submission, the SBA debt case is then assigned to the appropriate United States Attorneys Office or private counsel under contract with the Federal Government.

Screening at the National Central Intake Facility initially checks referrals to ensure that the Statute of Limitations to file a lawsuit has not expired and that the Amount of principal referred is greater than $2,500.00.  Each file must contain credit data on the SBA debtor obtained within the past 6 months or evidence of verified employment or the SBA debtor’s asset information.

If the SBA debt case is accepted, the entire package is then mailed to the Financial Litigation Unit in the United States Attorneys Office of jurisdiction or to the Private Counsel Office litigating on behalf of the Justice Department.  There are approximately 19 private counsel districts where a SBA debt case could be referred.  Private counsel districts are located in:

Los Angeles, California;

San Francisco, California;

Connecticut (Foreclosures only);

Washington, D.C.;

Miami, Florida;

Tampa, Florida;

Chicago, Illinois;

Detroit, Michigan;

Newark, New Jersey;

Brooklyn, New York;

Syracuse, New York;

Buffalo, New York;

Philadelphia, Pennsylvania;

Scranton, Pennsylvania

Referrals that comply with the National Central Intake Facility screening criteria may, however, still be subject to immediate rejection after review by the United States Attorneys Office. (The United States Attorneys Office returns declined claims back to the Treasury Department and notifies the National Central Intake Facility of the declination.)

CASES ASSIGNED TO SPECIAL ASSISTANT U. S. ATTORNEYS

The National Central Intake Facility is charged with the responsibility of tracking all cases that are being litigated by the Department of Justice's United States Attorneys. This includes SBA debt cases assigned to the Special Assistant U. S. Attorneys.

Once the Treasury Department refers an SBA debt to the Department of Justice for collection litigation, Treasury must immediately terminate the use of all administrative collection activities – Administrative Wage Garnishment, Treasury Offset Program levies, Administrative Offset against Federal Salary, Pension, Social Security Benefits, Federal Tax Refund and referrals to Private Collection Agencies under contract with Federal Government.  Furthermore, Treasury must refrain from having any contact with the SBA debtor, and direct all SBA debtor inquiries concerning the SBA debt to the Department of Justice.

In a future blog post, we will attach a Sample Complaint filed by the United States Attorneys Office against a SBA debtor for breach of a personal guarantee agreement that secured the SBA loan on behalf of the failed business.  The Sample Complaint describes the typical allegations filed by United States Attorneys Office against a SBA debtor when the Federal Government resorts to using litigation to collect an SBA debt.

DEBARMENT PROVISION OF THE FEDERAL DEBT COLLECTION PROCEDURES ACT

A debarment provision within the Federal Debt Collection Procedures Act of 1990 (FDCPA) 28 U.S.C. § 3201(e), provides that individual guarantors who have defaulted on their obligations to repay a SBA loan, and against whom the Department of Justice has secured a judgment for their SBA debt through collection litigation, may not be eligible for certain further federal financial benefits, until the judgments outstanding against them are paid in full or otherwise satisfied.

If you are facing a SBA loan default, contact us today for a FREE initial consultation with an experienced SBA workout attorney at 888-756-9969.

We analyze your SBA loan problems and advise you on potential solutions such as a SBA offer in compromise for your SBA loan default.

We are here to help you with your SBA loan problems.

If you owe more than $30,000, call our experienced attorneys at (888) 303-6975 anytime for a Free Case Evaluation

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Helping provide real solutions to individuals who are facing SBA loan problems. Contact one of our experienced SBA Attorneys and Federal Agency Practitioners today for a Free Case Evaluation - (888) 756-9969. 

We are here to help you with your SBA loan problems.

If you owe more than $30,000, call our experienced attorneys at (888) 303-6975 anytime for a Free Case Evaluation