We Provide Nationwide Representation of Small Business Owners, Personal Guarantors, and Federal Debtors before the SBA and Treasury Department's Bureau of Fiscal Service
Book a Free Consultation CallThe COVID-19 pandemic has created massive economic upheaval. Even with government stimulus and deferments, you may find your business unsustainable. Many businesses have already closed due to the coronavirus. But you signed a personal guarantee agreeing to pay the loan personally if the business fails. As such, the lender or the government can seek repayment from you directly. This may include filing a lawsuit by the lender or administrative remedies by the government such as administrative wage garnishment.
If you live in Southern California - San Diego, Orange, or Los Angeles Counties, Chapter 7 bankruptcy may eliminate the SBA loan obligation and stop any lawsuit or other collection activity. You may have other resolution options, such as an offer in compromise or another structured workout. However, if you are not eligible for an offer in compromise or you have multiple delinquent unsecured debts, Chapter 7 bankruptcy may offer better relief for your situation. The SBA loan guarantee is be treated like any other unsecured debt and, therefore, subject to discharge. This means you do not have to pay the debt.
If, however, you pledged personal assets such as your house or other real estate, Chapter 7 bankruptcy becomes a less desirable option - especially if there is sufficient equity. Bankruptcy might not remove the lien on your house and the lender or SBA can still foreclose if sufficient equity is available for the taking. If you pledged your home as collateral, a Release of Lien for Consideration or a Chapter 11 Subchapter V might be a more viable option depending on your unique circumstances.
The Small Business Reorganization Act of 2019 (SBRA) - which was signed into law last August 2019 and took effect on February 19th, 2020 - marks a significant change in bankruptcy law for small businesses in severe financial distress. The SBRA adds a new subchapter V to Chapter 11, with the goal of easing the complexities and costs of small business bankruptcies. We can help small business debtors take advantage of the new streamlined Chapter 11 procedures - especially in this COVID-19 economic climate. We can provide advice and counsel, and if hired, execute on the following categories and phases:
Protect Law Group can provide the experienced legal representation you need in Chapter 7 or Chapter 11 Subchapter V bankruptcy matters. If you live in the San Diego, Orange, or Los Angeles Counties, California and have a defaulted SBA loan, contact Protect Law Group today for a Case Evaluation.
If you live in Southern California - San Diego, Orange, or Los Angeles Counties, Chapter 7 bankruptcy may eliminate the SBA loan obligation and stop any lawsuit or other collection activity. You may have other resolution options, such as an offer in compromise or another structured workout. However, if you are not eligible for an offer in compromise or you have multiple delinquent unsecured debts, Chapter 7 bankruptcy may offer better relief for your situation. The SBA loan guarantee is be treated like any other unsecured debt and, therefore, subject to discharge. This means you do not have to pay the debt.
If, however, you pledged personal assets such as your house or other real estate, Chapter 7 bankruptcy becomes a less desirable option - especially if there is sufficient equity. Bankruptcy might not remove the lien on your house and the lender or SBA can still foreclose if sufficient equity is available for the taking. If you pledged your home as collateral, a Release of Lien for Consideration or a Chapter 11 Subchapter V might be a more viable option depending on your unique circumstances.
The Small Business Reorganization Act of 2019 (SBRA) - which was signed into law last August 2019 and took effect on February 19th, 2020 - marks a significant change in bankruptcy law for small businesses in severe financial distress. The SBRA adds a new subchapter V to Chapter 11, with the goal of easing the complexities and costs of small business bankruptcies. We can help small business debtors take advantage of the new streamlined Chapter 11 procedures - especially in this COVID-19 economic climate. We can provide advice and counsel, and if hired, execute on the following categories and phases:
Protect Law Group can provide the experienced legal representation you need in Chapter 7 or Chapter 11 Subchapter V bankruptcy matters. If you live in the San Diego, Orange, or Los Angeles Counties, California and have a defaulted SBA loan, contact Protect Law Group today for a Case Evaluation.
Clients 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.
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.
Clients personally guaranteed SBA 504 loan balance of $750,000. Clients also pledged the business’s equipment/inventory and their home as additional collateral. Clients had agreed to a voluntary sale of their home to pay down the balance. We intervened and rejected the proposed home sale. Instead, we negotiated an acceptable term repayment agreement and release of lien on the home.
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