Many businesses of all sizes are struggling with debt. Both new and older troubled businesses have found that government legal action resulting from an SBA loan default magnifies their financial difficulties. An SBA loan foreclosure can also result in the loss of the owner's home and other personal assets.
The Inspector General of the SBA (OIG) has criticized the SBA's oversight of lenders and called for tighter controls. To date, the OIG's aggressive pursuit of lenders, brokers and others has resulted in numerous indictments, convictions and hefty fines. OIG audits of lenders found that 44% of the reviewed loans had inadequate documentation.
A qualified attorney from the Protect Law Group is able to conduct a comprehensive audit of an SBA loan in order to determine if the lender committed fraud or if any regulatory deficiencies or other SOP violations took place. If this audit reveals regulatory mishaps, a petition can be submitted to the SBA (or any other federal agency holding the debt) that will disclose the findings of the audit and ask that any and all collection actions be terminated.
The goal is to show that the SBA debt is not "legally enforceable" so that the government will seek recovery from the fraudulent bank or lender. Because of the Federal Statute of Limitations, the sooner this audit is performed and action is taken, the better.
At some point, a business owner with a past-due loan will receive an SBA demand letter. This letter will state that the loan will be referred to the Department of the Treasury unless an SBA Offer in Compromise is received within 60 days from the date of the letter. This is a one-time opportunity to settle the SBA loan for less than the amount that they say is owed.
The Tax Offset Program is employed by the Treasury to collect a defaulted loan balance. They will take any tax refunds, 15% of any federal benefits such as social security and garnish 15% of your net wages.
The attorneys at Protect Law Group have the knowledge and experience necessary to erase or settle your SBA debt. Don't delay. As a personal guarantor of this debt, your home is in jeopardy. Contact them today for a free case evaluation.
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' 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.
Our firm successfully resolved an SBA COVID-19 Economic Injury Disaster Loan (EIDL) default in the amount of $150,000 on behalf of Illinois-based client. After the business permanently closed due to the economic impacts of the pandemic, the owners faced potential personal liability if the business collateral was not liquidated properly under the SBA Security Agreement.
We guided the client through the SBA’s Business Closure Review process, prepared a comprehensive financial submission, and negotiated directly with the SBA to release the collateral securing the loan. The borrower satisfied their collateral obligations with a payment of $2,075, resolving the SBA’s security interest.
Clients obtained an SBA 7(a) loan for $324,000 to buy a small business and its facility. The business and real estate had an appraisal value of $318,000 at the time of purchase. The business ultimately failed but the participating lender abandoned the business equipment and real estate collateral even though it had valid security liens. As a result, the lender recouped nearly nothing from the pledged collateral, leaving the business owners liable for the deficiency balance. The SBA paid the lender the 7(a) guaranty money and was assigned ownership of the debt, including the right to collect. However, the clients never received the SBA Official 60-Day Notice and were denied the opportunity to negotiate an Offer in Compromise (OIC) or a Workout directly with the SBA before being transferred to Treasury's Bureau of Fiscal Service, which added an additional $80,000 in collection fees. Treasury garnished and offset the clients' wages, federal salary and social security benefits. When the clients tried to negotiate with Treasury by themselves, they were offered an unaffordable repayment plan which would have caused severe financial hardship. Clients subsequently hired the Firm to litigate an Appeals Petition before the SBA Office & Hearings Appeals (OHA) challenging the legal enforceability and amount of the debt. The Firm successfully negotiated a term OIC that was approved by the SBA Office of General Counsel, saving the clients approximately $205,000.
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