SBA Loan Default News: The Worst Franchises
We provide people who are facing an SBA loan default with solutions. We analyze SBA loan problems and provide solutions such as an SBA offer in compromise.
Contact Our SBA Attorneys for Nationwide Representation of SBA and Treasury Debt Problems
Book a Consultation CallIf you have received the 60-Day Official Notice from the SBA offering you the opportunity to petition for an administrative review of the debt, make an SBA Offer in Compromise or enter into a Repayment agreement for an SBA loan default, you may not know which way to turn. Not only has your SBA debt come back to haunt you but if you fail to respond to the 60-Day Official Notice within the stated time frame, your case will be cross-referred to the Department of Treasury’s Bureau of Fiscal Service, where the Government will add an amount up to 32% of the original SBA debt balance as “administrative fees and costs.”
Sometimes, based on your financial status, an SBA Offer in Compromise won’t be an option. Some SBA debtors have too much in liquid assets and/or their monthly income is too high such that the SBA will not be amenable to an SBA Offer in Compromise.
If your financial profile and net worth disqualifies you for an SBA Offer in Compromise, one of your options is to negotiate a Repayment agreement with the SBA. After carefully reviewing your financial profile, an SBA Attorney can negotiate a reasonable Repayment agreement with the SBA prior to the cross-referral of your case to Treasury’s Bureau of Fiscal Service.
A Repayment agreement with the SBA is used to pay the claimed debt over a reasonable period of time. However, the SBA unilaterally defines a “reasonable period of time” as no more than 3 years. It, however, will not take into consideration certain factors as noted in the SBA Standard Operating Procedures (SOPs), the Code of Federal Regulations (CFR) or the Federal Claims Collection Standards (FCCS) to derive the monthly amount unless you assert your rights. Instead, the SBA will just calculate the monthly amount by dividing the unverified amount of the SBA debt by 36 months.
It is a one-sided negotiation that favors that SBA. Don’t fall into the trap by trying to negotiate the Repayment agreement terms by yourself. Instead, let an SBA Attorney analyze your financial profile and compare it against the FCCS to derive a “reasonable” amount that you can afford and present the terms to the SBA to arrive at a “win-win” negotiation that works for both parties.
Contact us today for a Case Evaluation.
Sometimes, based on your financial status, an SBA Offer in Compromise won’t be an option. Some SBA debtors have too much in liquid assets and/or their monthly income is too high such that the SBA will not be amenable to an SBA Offer in Compromise.
If your financial profile and net worth disqualifies you for an SBA Offer in Compromise, one of your options is to negotiate a Repayment agreement with the SBA. After carefully reviewing your financial profile, an SBA Attorney can negotiate a reasonable Repayment agreement with the SBA prior to the cross-referral of your case to Treasury’s Bureau of Fiscal Service.
A Repayment agreement with the SBA is used to pay the claimed debt over a reasonable period of time. However, the SBA unilaterally defines a “reasonable period of time” as no more than 3 years. It, however, will not take into consideration certain factors as noted in the SBA Standard Operating Procedures (SOPs), the Code of Federal Regulations (CFR) or the Federal Claims Collection Standards (FCCS) to derive the monthly amount unless you assert your rights. Instead, the SBA will just calculate the monthly amount by dividing the unverified amount of the SBA debt by 36 months.
It is a one-sided negotiation that favors that SBA. Don’t fall into the trap by trying to negotiate the Repayment agreement terms by yourself. Instead, let an SBA Attorney analyze your financial profile and compare it against the FCCS to derive a “reasonable” amount that you can afford and present the terms to the SBA to arrive at a “win-win” negotiation that works for both parties.
Contact us today for a Case Evaluation.
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.
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.
Client personally guaranteed SBA 7(a) loan balance of over $150,000. Business failed and eventually shut down. SBA then pursued client for the balance. We intervened and was able to present an SBA OIC that was accepted for $30,000.
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