Let's Get Personal: A Guide to Help You Fill Out Your SBA Personal Financial Statement
Need help with paperwork? Get your financial ducks in a row with this guide to help you fill out your SBA personal financial statement.
If you have a SBA loan default problem and you're working with your lender to wind down the business and settle the deficiency with an SBA Offer In Compromise (SBA OIC), time is of the essence. Lenders, banks, the CDC and the SBA generally do not wait much longer than 60-90 days after the defaulted borrower has been liquidated or shut down to tender an SBA OIC for consideration which, if accepted, could potentially release the guarantors from the deficiency for a lesser amount.
As part of the process, the bank, the lender, CDC or SBA should send you what is called the “60-day letter - click here to view: Sample 60 Day Referral Letter" where you'll be given only 60 days from the date of the letter to file an SBA OIC Package for SBA consideration. If you fail to timely submit an SBA OIC Package within the administrative time frame as noted in the letter you received, the bank or SBA will probably submit the file to the United States Department of Treasury for enforced collection, and thus, you will probably lose your one (1) time opportunity to settle for less than what is purportedly owed on the SBA loan debt through this special administrative process.
The United States Treasury Department rarely collects on these bad loans directly – rather they hire third-party collection agencies to handle them. These collection agencies don’t know anything about the history behind the loans – their job is to be ruthless in their collection efforts as they generally receive a generous percent of the collected amount or actually bought the so-called junk federal debt for pennies on the dollar.
Several of these federally approved third-party collection agencies or junk debt buyers are particularly nasty and rarely settle for less than 50% of the outstanding amount as the incentives for collection, litigation, and judgment pursuit are very high. Contrast that with the results that we have reviewed and settled and it’s easy to see the importance of addressing your outstanding SBA loan debt sooner rather than later, whether you’re working with a non-attorney consultant, an SBA Workout Attorney or the United States Treasury Department Circular 230 Practitioner, or attempting to do it yourself. If you think your banker is nasty or difficult to work with, you don’t want to experience the tactics of these collection agencies or junk debt buyers.
If you have an SBA loan default problem and received the 60-day referral letter to the Treasury Department, call us at 888-756-9969 to speak to one of our SBA Workout Attorneys and figure out your options. It's a complimentary Case Evaluation, or, simply a complete form to see if you pre-qualify for an SBA OIC.
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.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
Clients' 7(a) loan was referred to Treasury's Bureau of Fiscal Service for enforced collection in 2015. They not only personally guaranteed the loan, but also pledged their primary residence as additional collateral. One of the clients filed for Chapter 7 bankruptcy thinking that it would discharge the SBA 7(a) lien encumbering their home. They later discovered that they were mistakenly advised. The Firm was subsequently hired to review their case and defend against a series of collection actions. Eventually, we were able to negotiate a structured workout for $180,000 directly with the SBA, saving them approximately $250,000 (by reducing the default interest rate and removing Treasury's substantial collection fees) and from possible foreclosure.
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.
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