SBA Loan Default: SBA to Increase Enforcement Efforts?
We help people who need to avoid SBA loan default by teaching them about SBA offer in compromise and about various SBA loan problems.
Contact Our SBA Attorneys for Nationwide Representation of SBA and Treasury Debt Problems
Book a Consultation CallIf you have recently received a written notice from the Department of Treasury demanding payment 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 the amount is now up to 30% more than because the Department of Treasury has added oppressive “collection fees.”
You may feel a certain type of paralysis because the federal government is looking to collect more money than you will ever be able to pay back in your lifetime. The first step you need to take is perform a proper investigation and an analysis of your legal defenses, where applicable.
Neither the SBA nor the Department of Treasury needs to go to court and prove their case in front of a jury or judge like a private creditor when it pursues you through the federal agency system. You do not receive your “day in court” to argue your case when the federal government is your creditor. The SBA and Department of Treasury unilaterally decide that you owe the debt. They do not send you any documents that prove you owe the debt and the federal government certainly does not provide you documents that may exonerate you from liability. The SBA and the Treasury may have hundreds of pages of documents related to your case, which you have a right to inspect and review.
To get your day in court, so to speak, you have to figure out what evidence is available and the legal defenses you can assert. An SBA Attorney can conduct such an investigation and advise you of your options. Once you know your options, you can make an informed decision on how to dispute the claimed debt.
Before filing bankruptcy and ruining your credit or taking another path, you should consider having one of our SBA Attorneys to conduct a proper investigation of your federal debt and determine if there are better alternatives.
Contact us today for a Case Evaluation.
Clients borrowed and personally guaranteed an SBA 7(a) loan. Clients defaulted on the SBA loan and were sued in federal district court for breach of contract. The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan. We were subsequently hired to intervene and aggressively defend the lawsuit. After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.
Our firm successfully resolved an SBA 7(a) loan default in the amount of $140,000 on behalf of a husband-and-wife guarantor pair. The business had closed following a prolonged decline in revenue, leaving the borrowers personally liable for the remaining balance.
After conducting a comprehensive financial analysis and preparing a detailed SBA Offer in Compromise (SBA OIC) package, we negotiated directly with the SBA and the lender to achieve a settlement for $70,000 — just 50% of the outstanding balance. This settlement released the borrowers from further personal liability and allowed them to move forward without the threat of enforced collection.
Our firm successfully negotiated an SBA offer in compromise (SBA OIC), settling a $974,535.93 SBA loan balance for just $18,000. The offerors, personal guarantors on an SBA 7(a) loan, originally obtained financing to purchase a commercial building in Lancaster, California.
The borrower filed for bankruptcy, and the third-party lender (TPL) foreclosed on the property. Despite the loan default, the SBA pursued the offerors for repayment. Given their limited income, lack of significant assets, and approaching retirement, we presented a strong case demonstrating their financial hardship.
Through strategic negotiations, we secured a favorable SBA settlement, reducing the nearly $1 million debt to a fraction of the amount owed. This outcome allowed the offerors to resolve their liability without prolonged financial strain.
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