SBA Loan Default Attorneys: Understanding the Collection Process
Navigate SBA loan defaults with confidence. Discover how SBA loan default attorneys can guide you through collections and safeguard your financial future efficiently.
Explore the factors influencing SBA's decision on your Offer in Compromise. Learn how to improve your chances of acceptance and manage your defaulted loan effectively.
If you're dealing with a defaulted SBA loan and exploring your options, you might be considering an Offer in Compromise (OIC). This process allows you to propose settling your debt for less than the full amount owed. However, whether the SBA accepts your offer depends on several factors. Protect Law Group, a law firm specializing in SBA loan issues, can guide you through this complex process and help improve your chances of success.
An Offer in Compromise is a proposal to repay a portion of your debt instead of the full amount. This can provide relief if you're struggling financially. The SBA views OICs as a way to recover some funds while offering borrowers a chance to resolve their debts.
Business ventures can fail for various reasons, leaving debt behind. While bankruptcy is an option, it often carries long-term consequences. An OIC offers an alternative that may help you manage your debt without the stigma of bankruptcy. Protect Law Group can help you evaluate whether this is the right path for you.
The SBA evaluates several factors when deciding whether to accept an OIC. These include:
The SBA aims to achieve a resolution that is more financially advantageous than enforced collection actions. Lump sum payments are often preferred as they provide immediate returns with less risk and cost.
To increase the likelihood of acceptance, consider the following steps:
Conduct a thorough review of your finances, including income, expenses, assets, and liabilities. Protect Law Group can assist in organizing this information to strengthen your proposal.
Your offer should reflect your genuine ability to pay. Unrealistic proposals can harm your credibility. Protect Law Group can help you strike the right balance.
Professional advice is invaluable. Protect Law Group’s experienced SBA attorneys can guide you through the process, ensuring your documentation and negotiation strategies are effective.
Provide detailed explanations for your financial struggles, supported by documentation. This strengthens your case and demonstrates sincerity.
Submitting an OIC requires precision and thoroughness. Protect Law Group can help ensure your submission is complete and accurate.
Most OIC submissions involve completing SBA Form 1150, which requires detailed financial information. Accuracy is crucial to avoid delays or rejections.
Include a cover letter summarizing your situation and key points of your OIC. This personalizes your submission and provides context beyond the numbers.
After submission, the SBA will review your OIC. Possible outcomes include:
If accepted, you can move forward without the burden of overwhelming debt. Protect Law Group can help you adhere to the terms of the agreement.
The SBA may propose a counteroffer. Being prepared to negotiate is essential.
If rejected, understanding the reasons is critical. Protect Law Group can help you reassess and potentially resubmit a revised offer.
Adhere strictly to the terms of the agreement to avoid defaulting on the new arrangement.
Rejection doesn’t mean the end. Protect Law Group can help you explore other options, including negotiation or, if necessary, bankruptcy.
Whether the SBA accepts your OIC depends on many factors. Protect Law Group’s expertise in SBA loan issues can help you navigate this complex process, increasing your chances of a favorable outcome. Contact them at (833) 428-0937 for a case evaluation and personalized guidance toward financial recovery.
Are you struggling with a defaulted SBA loan and wondering if the SBA will accept your Offer in Compromise? The process can be complex, but with the right guidance, you can increase your chances of success. Protect Law Group specializes in helping individuals and businesses navigate SBA loan challenges, including Offers in Compromise. Their experienced SBA attorneys and Federal Agency Practitioners provide tailored solutions to help you resolve your debt effectively. Contact Protect Law Group today at (833) 428-0937 for a case evaluation and take the first step toward financial relief.
An SBA Offer in Compromise (OIC) is a proposal to settle your SBA loan debt for less than the full amount owed. It is designed for borrowers facing financial hardship who are unable to meet their loan obligations fully. The SBA considers OICs as a way to recover some funds while providing relief to borrowers.
An Offer in Compromise can be a viable alternative to bankruptcy, which often carries long-term repercussions and stigma. By pursuing an OIC, you may be able to manage your debt more effectively and avoid the negative consequences associated with filing for bankruptcy.
The SBA evaluates several factors, including the handler of your file, your cooperation with the lender, the presence of liquid assets, the amount of deficiency balance, the potential for bankruptcy, your net worth and assets, wage garnishment yield, special circumstances like health issues, and the cost of collection. These factors help determine whether your offer is acceptable.
To increase your chances, evaluate your financial situation thoroughly, set a realistic offer based on your ability to pay, consult with experts like attorneys or financial advisors, and provide detailed documentation explaining your financial struggles. Submitting accurate and complete forms, such as SBA Form 1150, is also crucial.
If your OIC is rejected, it is important to understand the reasons behind the decision. You can reassess your financial situation, address any deficiencies in your submission, and potentially resubmit a revised offer. Consulting a professional may also help you explore other options, such as negotiation or bankruptcy as a last resort.
The SBA may accept your offer, providing relief and closure to your debt situation. Alternatively, they might propose a counteroffer with adjusted terms or amounts. If your offer is rejected, you can use the feedback to revise and resubmit your proposal or explore other debt resolution options.
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.
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.
Small business and guarantors obtained an SBA COVID-EIDL loan for $1,000,000. Clients defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for collection. Treasury added nearly $500,000 in collection fees totaling $1,500,000. Clients were served with the SBA's Official 60-Day Notice and exercised the Repayment option by applying for the SBA’s Hardship Accommodation Plan. However, their application was summarily rejected by the SBA without providing any meaningful reasons. Clients hired the Firm to represent them against the SBA, Treasury and a Private Collection Agency. After securing government records through discovery, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury. During litigation and before the OHA court issued a final Decision and Order, the Firm successfully negotiated a reinstatement and recall of the loan back to the SBA, a modification of the original repayment terms, termination of Treasury's enforced collection and removal of the statutory collection fees.