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Determining The Best Course Of Action Based On The Notice

Facing a notice from the SBA? Discover expert strategies to navigate legal, financial complexities to protect your business and resolve debts efficiently.

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Have you ever received a notice and found yourself unsure about the best course of action to take? When dealing with legal and financial matters, especially those concerning government agencies like the Small Business Administration (SBA), it’s crucial to understand your options and make informed decisions.

Understanding the Notice

Receiving a notice from the SBA or other federal agencies can be daunting. These notices may concern issues such as administrative offset, federal salary offset, or other financial actions that could impact your business’s stability. Protect Law Group specializes in navigating these complexities, offering guidance and strategies to manage and potentially resolve these issues. They provide expertise in dealing with all aspects of SBA loans and federal debt.

Types of Notices You May Encounter

Understanding the types of notices you might receive is the first step in determining the appropriate response. These could include:

  • Administrative Offset Notice: This informs you of the government’s intention to collect debt by reducing payments from other federal payments you might be eligible to receive.
  • Federal Salary Offset Notice: This is issued when the intent is to collect a debt through deductions from your federal salary.
  • Treasury Offset Notice: This involves collection actions taken by the Treasury Department and usually occurs when a debt is transferred to them for collection.
  • SBA Notice of Default: This notice lets you know that you have defaulted on a loan, prompting the need for immediate attention to avoid severe consequences.

Each type of notice carries specific implications and requires different responses. Ensuring you understand the content and implications of these notices is vital.

The Role of Protect Law Group

When faced with these challenges, having a legal partner well-versed in these matters can be invaluable. Protect Law Group offers a suite of services designed to help you navigate the complexities of SBA loans and federal debt issues.

Core Services Offered

Protect Law Group’s services are tailored to provide you with multiple courses of action depending on the notice received. Key services include:

  • SBA Offer in Compromise (OIC): This service allows you to negotiate a settlement on your debt, potentially reducing the amount you owe. It’s especially beneficial if you’re unable to pay the full amount.
  • Structured Workout Agreements: For businesses that can’t pay in full, extending payments over time through a structured workout can alleviate immediate financial pressure.
  • Administrative Litigation Representation: If your matter requires litigation, their attorneys can represent you before the SBA Office of Hearings and Appeals.
  • Negotiation Services: Skilled negotiators can advocate on your behalf to secure favorable terms with your creditors.

By leveraging these services, you can often find a path to resolving your debt issues that minimizes financial disruption.

Developing a Strategy to Respond

Once you’ve received a notice, it’s important to have a clear strategy in place. Protect Law Group assists by helping to develop and implement strategies that are tailored to your specific situation.

Immediate Actions to Consider

Here are some immediate actions to consider when you receive a notice:

  1. Review the Notice Carefully: Understand what the notice is about, its implications, and the timeline for responding. Look for any errors that could be contested.
  2. Consult a Professional: Engage with professionals like those at Protect Law Group who can guide you based on their expertise and experience.
  3. Gather Documentation: Collect all pertinent documents related to your debt and any relevant communications with the SBA or Treasury.
  4. Evaluate Financial Options: Assess your current financial situation to understand your capacity to address the debt. Determine if options like an Offer in Compromise are viable.
  5. Formulate a Response Plan: With professional guidance, develop a plan that outlines the steps you need to take to address the notice effectively.

The focus should always be on addressing the notice promptly to prevent any escalation of actions that could adversely affect your finances.

Legal Considerations

A significant part of determining the best course of action involves understanding the legal landscape. The Agency Practice Act authorizes Protect Law Group attorneys to represent federal debtors nationwide, ensuring that you have experienced legal assistance available.

Handling Legal Complexities

Legal complexities can arise when dealing with issues like cross-servicing disputes and procedural errors. Here is how Protect Law Group can assist:

  • Filing Appeals and Petitions: They can help you prepare appeals and petitions with the SBA’s Office of Hearings and Appeals, especially if there are factual or procedural errors.
  • Navigating Cross-Servicing Disputes: If your debt has been transferred for cross-servicing, their expertise can aid in effectively disputing the debt.
  • Legal Error Analysis: Identifying factual, procedural, and legal errors that may exist in the notices or in the way debts have been managed.

These legal avenues can sometimes provide leverage to negotiate more favorable terms or even reverse the effects of a notice.

Negotiation and Resolution

Negotiation is at the heart of many successful debt resolutions. Protect Law Group’s negotiators are skilled in working with the SBA and lenders to secure favorable agreements.

The Art of Negotiation

Negotiating a resolution can involve several strategies:

  • Leveraging Expert Negotiators: With their specialist knowledge, negotiators can present compelling arguments that may lead creditors to agree to more favorable terms.
  • Debt Restructuring: This might involve modifying the payment structure to make debts more manageable.
  • Exploring Alternative Solutions: Considering options like Offers in Compromise or debt settlements.

The ultimate goal of negotiation is to reach an agreement that minimizes financial harm while resolving the issue effectively.

Protecting Assets and Business Interests

Resolving debt issues effectively is not just about addressing the immediate notice but protecting your business assets and interests in the long term.

Strategies for Asset Protection

Here are steps you can take to protect your assets:

  • Avoiding Foreclosure and Bankruptcy: By resolving debts proactively through solutions such as structured workouts or settlements.
  • Minimizing Damage: Actions like correcting procedural errors early can prevent extensive damage to your credit and financial standing.
  • Securing Long-Term Financial Stability: Implementing strategies that align with your business’s operational capability and financial health.

By focusing on these protective measures, you can ensure that your business remains viable and your personal assets are protected from adverse actions.

Conclusion

Determining the best course of action when you receive a notice can be complex and overwhelming. Whether it’s a federal salary offset or an administrative notice, understanding the potential impact and knowing your options are crucial. Protect Law Group offers the expertise and strategic guidance necessary to navigate these challenges. With their support, you can focus on resolving debts effectively and maintaining your business and financial well-being. Making informed decisions and taking timely action are essential steps in ensuring that you handle notices in a manner that aligns with your financial goals and legal obligations.

Frequently Asked Questions

$750,000 SBA 7A LOAN – NEGOTIATED WORKOUT AGREEMENT

$750,000 SBA 7A LOAN – NEGOTIATED WORKOUT AGREEMENT

Client’s small business obtained an SBA 7(a) loan for $750,000.  She and her husband signed personal guarantees exposing all of their non-exempt income and assets. With just 18 months left on the maturity date and payment on the remaining balance, the Great Recession of 2008 hit, which ultimately caused the business to fail and default on the loan terms. The 7(a) lender accelerated and sent a demand for full payment of the remaining loan balance.  The SBA lender’s note allowed for a default interest rate of about 7% per year. In response to the lender's aggressive collection action, Client's husband filed for Chapter 7 bankruptcy in an attempt to protect against their personal assets. However, his bankruptcy discharge did not relieve the Client's personal guarantee liability for the SBA debt. The SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection against the Client to the SBA. The Client then received the SBA Official 60-Day Notice. After conducting a Case Evaluation with her, she then hired the Firm to respond and negotiate on her behalf with just 34 days left before the impending referral to Treasury. The Client wanted to dispute the SBA’s alleged debt balance as stated in the 60-Day Notice by claiming the 7(a) lender failed to liquidate business collateral in a commercially reasonable manner - which if done properly - proceeds would have paid back the entire debt balance.  However, due to time constraints, waivers contained in the SBA loan instruments, including the fact the Client was not able to inspect the SBA's records for investigation purposes before the remaining deadline, Client agreed to submit a Structured Workout for the alleged balance in response to the Official 60-Day Notice as she was not eligible for an Offer in Compromise (OIC) because of equity in non-exempt income and assets. After back and forth negotiations, the SBA Loan Specialist approved the Workout proposal, reducing the Client's purported liability by nearly $142,142.27 in accrued interest, and statutory collection fees. Without the Firm's intervention and subsequent approval of the Workout proposal, the Client's debt amount (with accrued interest, Treasury's statutory collection fee and Treasury's interest based on the Current Value of Funds Rate (CVFR) would have been nearly $291,030.

$150,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

$150,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

The 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. The client received the SBA's Official 60-day notice with the debt scheduled for referral to the 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 the 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.

$298,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

$298,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA.  Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice.  Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt.  After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.

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