Discover SBA Default Assistance Programs to effectively manage loan defaults. Learn about solutions like offers in compromise, structured workouts, and legal support.
Are you facing the challenges of a Small Business Administration (SBA) loan default and wondering what assistance programs are available to help you navigate these troubled waters? Dealing with a default can be overwhelming and stressful, but understanding the support options provided by the SBA can significantly ease the burden. SBA Default Assistance Programs are specifically designed to help individuals and businesses manage and resolve their debt issues effectively. In this article, we will explore various programs and legal avenues available, with professional insights into how Protect Law Group can assist in resolving your SBA debt challenges.
When a small business struggles to meet its financial obligations to the SBA, a loan default may occur. This situation can arise due to various factors, including cash flow problems, unexpected expenses, or inadequate revenue generation. Understanding the implications of an SBA loan default is crucial for making informed decisions and seeking appropriate assistance.
Once a default occurs, several processes can be initiated by the SBA or the lending institution. These may include demands for repayment, collection actions, and potential legal proceedings. Knowing the steps involved can help you prepare for potential outcomes and explore available solutions.
To aid those facing loan defaults, the SBA offers several assistance programs aimed at resolving debts while minimizing negative consequences. These programs are designed to provide support, negotiation leverage, and a pathway to financial recovery.
The SBA Offer in Compromise program allows eligible business owners to settle their debts for less than the total amount owed. This option can be particularly beneficial for businesses facing financial hardship. Engaging professional assistance, such as legal advisors from Protect Law Group, can be crucial in preparing a compelling offer that addresses the SBA’s requirements.
The OIC involves negotiations with the SBA to accept a reduced payment in full settlement of the debt. It requires a demonstration of inability to pay the full amount, backed by financial documentation. A successful offer can lead to significant debt relief.
The Structured Workout Program is a negotiated agreement between the SBA and borrowers that allows debt repayment over an extended period. This plan can provide breathing room to manage finances and gradually settle the outstanding amount.
Legal support plays a critical role in navigating the complexities of SBA default assistance. Protect Law Group specializes in offering comprehensive legal services for borrowers, ensuring each case is approached with expertise and strategic thinking.
Protect Law Group offers a wide range of legal services tailored to address SBA and Treasury debt issues. Their attorneys are proficient in federal debtor representation, providing solutions to defend and potentially resolve SBA debt collection matters.
When disputes escalate to litigation, having skilled attorneys can be pivotal. Protect Law Group represents clients in administrative litigation before the SBA Office of Hearings and Appeals, ensuring clients’ rights and interests are safeguarded.
Legal representation in administrative litigation involves reviewing case specifics, challenging procedural errors, and advocating for fair treatment.
Effective negotiations can lead to favorable terms and potential debt reduction. Protect Law Group employs expert negotiators to interact with the SBA and lenders, exploring the best possible outcomes for clients.
When SBA debts are transferred to the Treasury’s Bureau of Fiscal Service, resolving cross-servicing disputes becomes essential. Protect Law Group assists in formally preparing Petitions for Cross-Servicing Disputes, aiming to resolve these issues effectively.
Selecting the right legal firm is crucial for successfully navigating SBA debt problems, and Protect Law Group stands out for several reasons:
Protect Law Group distinguishes itself by offering highly educated attorneys who are well-versed in core principles for resolving SBA loan problems. This depth of knowledge and experience results in personalized solutions catered to each client’s unique circumstances.
Facing SBA loan default challenges requires informed decision-making and professional support. Understanding the available SBA Default Assistance Programs and seeking expert legal advice are crucial steps towards resolution. Protect Law Group stands ready to provide guidance, helping you explore and implement effective strategies to navigate these financial challenges successfully.
By leveraging their expertise, you can work towards minimizing the impact of debt issues and regaining fiscal stability, whether through negotiated settlements, structured workouts, or legal representation. If you’re encountering difficulties managing your SBA debt, consider reaching out to Protect Law Group for a comprehensive evaluation and the peace of mind needed during this complicated time.
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.
The clients are personally guaranteed an SBA 7(a) loan. The SBA referred the debt to the Department of Treasury, which was seeking payment of $487,981 from our clients. We initially filed a Cross-Servicing Dispute, which was denied. As a result, we filed an Appeals Petition with the SBA Office of Hearings and Appeals asserting legal defenses and supporting evidence uncovered during the discovery and investigation phase of our services. Ultimately, the SBA settled the debt for $25,000 - saving our clients approximately $462,981.
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.
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