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.
Small business sole proprietor obtained an SBA COVID-EIDL loan for $500,000. Client defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for aggressive collection. Treasury added $180,000 in collection fees totaling $680,000+. Client tried to negotiate with Treasury but was only offered a 3-year or 10-year repayment plan. Client hired the Firm to represent before the SBA, Treasury and a Private Collection Agency. After securing government records through discovery and reviewing them, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury citing a host of purported violations. The Firm was able to negotiate a reinstatement and recall of the loan back to the SBA, participation in the Hardship Accommodation Plan, termination of Treasury's enforced collection and removal of the statutory collection fees.
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.
Client’s small business obtained an SBA 7(a) loan for $150,000. He and his wife signed personal guarantees and pledged their home as collateral. The SBA loan went into default, the term or maturity date was accelerated and demand for payment of the entire amount claimed was made. The SBA lender’s note gave it the right to adjust the default interest rate from 7.25% to 18% per annum. The business filed for Chapter 11 bankruptcy but was dismissed after 3 years due to its inability to continue with payments under the plan. Clients wanted to file for Chapter 7 bankruptcy, which would have been a mistake as their home had significant equity to repay the SBA loan balance in full as the Trustee would likely seize and sell the home to repay the secured and unsecured creditors. However, the SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection to the SBA. Clients then received the SBA Official 60-Day Notice and hired the Firm to respond to it and negotiate on their behalf. Clients disputed the SBA’s alleged balance of $148,000, as several payments made to the SBA lender during the Chapter 11 reorganization were not accounted for. To challenge the SBA’s claimed debt balance, the Firm Attorneys initiated expedited discovery to obtain government records. SBA records disclosed the true amount owed was about $97,000. Moreover, because the Clients’ home had significant equity, they were not eligible for an Offer in Compromise or an immediate Release of Lien for Consideration, despite being incorrectly advised by non-attorney consulting companies that they were. Instead, our Firm Attorneys recommended a Workout of $97,000 spread over a lengthy term and a waiver of the applicable interest rate making the monthly payment affordable. After back and forth negotiations, SBA approved the Workout proposal, thereby saving the home from imminent foreclosure and reducing the Clients' liability by nearly $81,000 in incorrect principal balance, accrued interest, and statutory collection fees.
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