Learn essential steps to take when sued by the U.S. Attorney for a defaulted SBA loan. Understand the process, explore negotiation options, and engage legal aid.
Facing a lawsuit from the U.S. Attorney due to a defaulted SBA loan can be overwhelming. Protect Law Group specializes in helping individuals navigate these challenging situations. With experienced SBA attorneys and Federal Agency Practitioners, they provide tailored solutions to address complex legal and financial issues effectively.
Defaulting on an SBA loan often triggers a series of actions. Initially, your lender may file a lawsuit to recover the loan amount before involving the SBA. Protect Law Group can guide you through this process, ensuring you understand your rights and options.
After a default, lenders aim to recover as much of the loan as possible. They may file lawsuits against borrowers and guarantors but are often open to compromise. Protect Law Group can help you negotiate with lenders to potentially dismiss lawsuits before judgments are reached.
Once the SBA honors the loan guarantee, they may pursue recovery from guarantors with significant assets or income. Protect Law Group offers expert advice on managing this stage of the process.
If the SBA refers your case to the U.S. Attorney, the Civil Division may file a lawsuit in federal court. Protect Law Group emphasizes the importance of seeking legal counsel immediately to navigate federal court procedures and explore settlement options.
Consulting an attorney is crucial. Protect Law Group provides case evaluations to help you respond appropriately and within deadlines, minimizing risks of adverse judgments.
A lawsuit signals the government’s intent to recover the debt. Protect Law Group can help you demonstrate sincerity in resolving the matter and develop a strategy to address the lawsuit effectively.
The SBA has six years to file a lawsuit, starting from when they take possession of the Note. Protect Law Group ensures clients understand these timelines and how federal laws override state statutes of limitations.
Understanding the statute of limitations is vital. Protect Law Group provides clarity on how these timelines impact your case and helps you prepare accordingly.
Assess your assets, liabilities, and income to determine a reasonable compromise. Protect Law Group assists in crafting offers that reflect your genuine capacity to pay.
Self-representation is rarely advisable. Protect Law Group’s experienced attorneys provide tailored strategies to address your specific circumstances.
Negotiation remains possible even after a lawsuit is filed. Protect Law Group helps structure compelling offers to resolve disputes before judgments are issued.
A reasonable offer aligns with your financial capabilities and satisfies the lender or SBA. Protect Law Group ensures your offer is legally sound and strategically advantageous.
Settlement saves time, money, and stress while avoiding lengthy court procedures. Protect Law Group helps clients achieve favorable settlements to minimize legal and financial burdens.
If settlement isn’t feasible, Protect Law Group prepares clients for court proceedings, ensuring compliance with legal requirements and developing strategies to minimize potential losses.
Court decisions may impose stricter repayment terms. Protect Law Group helps clients understand these risks and prepares for appeals if necessary.
Legal aid organizations can provide guidance for those unable to afford private attorneys. Protect Law Group connects clients with resources to navigate SBA loan litigation.
Staying informed through credible platforms is essential. Protect Law Group offers insights and updates on SBA-related lawsuits to help clients stay prepared.
Facing a lawsuit over a defaulted SBA loan is challenging, but Protect Law Group is committed to helping clients find resolutions. By understanding the legal landscape, evaluating your financial position, and engaging professional assistance, you can address the situation constructively and move forward with confidence.
Are you being sued by the U.S. Attorney over a defaulted SBA loan? Don’t face this challenge alone. Protect Law Group specializes in helping individuals and businesses navigate the complexities of SBA loan disputes. With experienced SBA attorneys and Federal Agency Practitioners, we provide tailored solutions to protect your rights and financial future. Contact us today for a case evaluation at (833) 428-0937. Take the first step toward resolving your legal and financial challenges with confidence.
When you default on an SBA loan, your lender will typically take steps to recover the outstanding loan amount. This may include filing a lawsuit against you and any guarantors involved. If the lender cannot recover the full amount, they may request the SBA to honor the loan guarantee. Once the SBA fulfills this obligation, they may pursue recovery from guarantors with significant assets or income.
If the U.S. Attorney files a lawsuit, it is crucial to act promptly and consult with an attorney. A legal professional can help you navigate federal court procedures, respond within required timelines, and explore options for settlement or defense. Acting wisely and seeking professional advice is essential to protect your rights.
The SBA has a six-year period to file a lawsuit against a guarantor. This timeline begins when the SBA takes possession of the loan Note, not from the moment of default. Federal law governs this limitation period, ensuring the SBA has adequate time to act even if the lender’s statute of limitations has expired.
Yes, it is possible to negotiate a settlement even after a lawsuit has been filed. The government is often open to settlement under the right circumstances. A reasonable offer that reflects your genuine financial capacity can lead to the dismissal of the lawsuit before it progresses to judgment. An attorney can help you craft a compelling settlement proposal.
Settling out of court can save time, money, and stress. It allows both parties to agree on terms that are less burdensome than those imposed by a court judgment. Additionally, settlement avoids lengthy court procedures and potential negative publicity, making it a more efficient resolution.
Legal aid organizations can provide support to those who cannot afford private attorneys. These organizations can guide you through the complexities of SBA loan litigation. Additionally, online resources and platforms offer valuable insights and updates on dealing with SBA-related lawsuits, helping you stay informed and prepared.
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.
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.
Client's small business obtained an SBA COVID EIDL for $301,000 pledging collateral by executing the Note, Unconditional Guarantee and Security Agreement. The business defaulted on the loan and the SBA CESC called the Note and Guarantee, accelerated the principal balance due, accrued interest and retracted the 30-year term schedule.
The loan was transferred to the Treasury's Bureau of Fiscal Service which resulted in the statutory addition of $90,000+ in administrative fees, costs, penalties and interest with the total debt now at $391.000+. Treasury also initiated a Treasury Offset Program (TOP) levy against the client's federal contractor payments for the full amount each month - intercepting all of its revenue and pushing the business to the brink of bankruptcy.
The Firm was hired to investigate and find an alternate solution to the bankruptcy option. After submitting formal production requests for all government records, it was discovered that the SBA failed to send the required Official 60-Day Pre-Referral Notice to the borrower and guarantor prior to referring the debt to Treasury. This procedural due process violation served as the basis to submit a Cross-Servicing Dispute to recall the debt from Treasury back to the SBA and to negotiate a reinstatement of the original 30-year maturity date, a modified workout, cessation of the TOP levy against the federal contractor payments and removal of the $90,000+ Treasury-based collection fees, interest and penalties.
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