If you Owe more than $30,000 contact us for a case evaluation at (833) 428-0937
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Treasury Offset Program Defense

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Treasury Offset Program Defense

The Treasury Offset Program is a centralized offset program, administered by the Treasury Department’s Bureau of the Fiscal Service (BFS), to collect delinquent federal agency debts (including SBA debts), in accordance with 26 U.S.C. § 6402(d) (collection of debts owed to federal agencies), 31 U.S.C. § 3720A (reduction of tax refund by amount of the debts), and other applicable laws.

Payment agencies prepare and certify payment vouchers to BFS and disbursing officials at other federal agencies that are non-Treasury disbursed (such as the Department of Defense), who then disburse payments. The payment vouchers contain information about the payment including the Tax Identification Number (TIN) and name of the recipient.

Before an eligible federal payment is disbursed to a payee, disbursing officials compare the payment information with debtor information, which has been supplied by the federal creditor agency, in BFS’s delinquent debtor database. If the payee's TIN and name match the TIN and name of a debtor, the disbursing official offsets (withholds) the payment, in whole or in part, to satisfy the debt, to the extent legally allowed.

BFS transmits amounts collected through offset to the appropriate federal creditor agencies. BFS maintains information about the delinquent debt in the TOP delinquent debtor database and continues to offset eligible federal payments until the federal creditor agency suspends or terminates debt collection or offset activity for the debt.

A federal creditor agency will suspend collection if the debt is subject to a bankruptcy stay or if other reasons justify suspension. A federal creditor agency will terminate collection of a debt if it is paid in full, compromised, discharged, or if other reasons justify termination.

The federal government's administrative debt collection activities are governed by a number of federal laws. BFS, as the central disbursing agency of the federal government is required to perform such offset pursuant to 31 U.S.C. § 3716(c).

There are, however, several federal rules and regulations that BFS must adhere to prior to utilizing its TOP levy powers.  These rules and regulations my be viewed by clicking: Summary of TOP's Program Rules and Requirements - which explains the general rules applicable to TOP, due process prerequisites, offset amounts (percent of payments that may be offset by debt type) and TOP payment exemptions.

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Treasury Offset Program Defense
$150,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

$150,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’sBureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.

$350,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

$350,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

Client personally guaranteed SBA 7(a) loan for $350,000. The small business failed but because of the personal guarantee liability, the client continued to pay the monthly principal & interest out-of-pocket draining his savings. The client hired a local attorney but quickly realized that he was not familiar with SBA-backed loans or their standard operating procedures. Our firm was subsequently hired after the client received the SBA's official 60-day notice. After back-and-forth negotiations, we were able to convince the SBA to reinstate the loan, retract the acceleration of the outstanding balance, modify the original terms, and approve a structured workout reducing the interest rate from 7.75% to 0% and extending the maturity date for a longer period to make the monthly payments affordable. In conclusion, not only we were able to help the client avoid litigation and bankruptcy, but our SBA lawyers also saved him approximately $227,945 over the term of the workout.

$220,000 SBA 7A LOAN -DOT WAIVER OF ADMINISTRATIVE FEES & COSTS

$220,000 SBA 7A LOAN -DOT WAIVER OF ADMINISTRATIVE FEES & COSTS

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.

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