Can't Pay Your SBA Loan? Here's How to Qualify for an SBA Loan Deferment
Are you unable to pay off your SBA loan or need to decrease the amount you pay? It's possible to get an SBA loan deferment. Here's how to qualify.
For instance, if you are applying for an FHA loan, that is, a loan backed by the United States government, your lender will access the CAIVRS system to determine your eligibility. If you have a prior default on an FHA loan or other federal debt, such as an SBA loan or a school loan, more than likely you will show up on CAIVRS and may lose your opportunity to obtain the credit you are seeking. As such, it can be very important to know this information and how to deal with a report on CAIVRS.
FHA CAIVRS Exception
Lenders must use CAIVRS to screen all borrowers , including nonprofit agencies acting as borrowers. You are not eligible for Federally-related credit if CAIVRS indicates that you are presently delinquent on a Federal debt, or have had a claim paid by a federal agency based on a debt you incurred such as a foreclosure or an SBA loan default. For FHA loans, a claim will affect you if such a claim has been paid within the previous three years on a loan made and insured on your behalf by HUD
A debt is in "delinquent status" for purposes of CAIVRS reporting if the debt has not been paid within 90 days of the payment due date. The payment due date is the date specified in the creditor agency's initial written demand for payment or applicable agreement or instrument (including a post-delinquency repayment agreement).
Each federal agency may have its own exceptions to CAIVRS reporting. For instance, FHA-insured mortgages have certain exceptions for divorce, bankruptcy, or case in which a subsequent assuming party defaulted.
You can apply for a CAIVRS waiver from the government agency that you are applying for credit. That is, if you are apply for an SBA backed business loan, but had a CAIVRS claim pay by HUD, you will have to request a CAIVRS waiver from the SBA, not HUD.
A waiver can only be granted by the head of a government agency or the chief financial officer. Your CAIVRS waiver request must meet certain guidelines and provide the requisite information prescribed by Federal law.
If you are dealing with a CAIVRS reporting issue, assertive legal counsel versed in Federal debt workouts can be a great asset. You may have other avenues for eliminating your CAIVRS claim reporting in addition to a waiver request. Protect Law Group focuses on Federal debt issues, including CAIVRS claim reporting issues and waiver requests. Contact one of our Federal debt workout attorneys today for a case evaluation at 1-888-756-9969.
Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure
Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements
Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.
Client’s small business obtained an SBA 7(a) loan for $150,000. He and his wife signed personal guarantees and pledged their home as collateral. The SBA loan went into default, the term or maturity date was accelerated and demand for payment of the entire amount claimed was made. The SBA lender’s note gave it the right to adjust the default interest rate from 7.25% to 18% per annum. The business filed for Chapter 11 bankruptcy but was dismissed after 3 years due to its inability to continue with payments under the plan. Clients wanted to file for Chapter 7 bankruptcy, which would have been a mistake as their home had significant equity to repay the SBA loan balance in full as the Trustee would likely seize and sell the home to repay the secured and unsecured creditors. However, the SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection to the SBA. Clients then received the SBA Official 60-Day Notice and hired the Firm to respond to it and negotiate on their behalf. Clients disputed the SBA’s alleged balance of $148,000, as several payments made to the SBA lender during the Chapter 11 reorganization were not accounted for. To challenge the SBA’s claimed debt balance, the Firm Attorneys initiated expedited discovery to obtain government records. SBA records disclosed the true amount owed was about $97,000. Moreover, because the Clients’ home had significant equity, they were not eligible for an Offer in Compromise or an immediate Release of Lien for Consideration, despite being incorrectly advised by non-attorney consulting companies that they were. Instead, our Firm Attorneys recommended a Workout of $97,000 spread over a lengthy term and a waiver of the applicable interest rate making the monthly payment affordable. After back and forth negotiations, SBA approved the Workout proposal, thereby saving the home from imminent foreclosure and reducing the Clients' liability by nearly $81,000 in incorrect principal balance, accrued interest, and statutory collection fees.
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.
Clients personally guaranteed SBA 7(a) loan balance of over $300,000. Clients also pledged their homes as additional collateral. SBA OIC accepted $87,000 with the full lien release against the home.
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