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Appeal of a Federal Employee Salary Offset

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Appeal of a Federal Employee Salary Offset


The transcript of the video follows below for further review.

If you have defaulted on a Small Business Administration (SBA) loan and you are a federal employee, more than likely the Department of Treasury (DOT) will send you a notice stating that the DOT will offset your wages or salary, that is, take a portion of your paycheck every pay period until the debt is paid.

You can, however, appeal the wage garnishment or offset to the SBA’s Office of Hearing and Appeal (OHA).  This course should not be pursued lightly and is not appropriate for a non-attorney or an inexperienced attorney in OHA cases.

The OHA assigns an administrative law judge (ALJ) to handle your appeal.  The SBA will similarly assign an attorney to represent the SBA in the appeal.  As stated, an OHA appeal amounts to a litigated case with provisions for motions, subpoenas, motions for summary judgment, etc.  Moreover, if the law and provisions of the OHA appeal process are not followed, a petitioner may be subject to sanctions by the OHA.  One should not be penny wise and pound foolish when it comes to appealing a federal salary offset or garnishment.

The OHA appeal of your federal salary garnishment or offset can, however, be an effective avenue to resolve your SBA loan default either by judicial decision or by settlement with the SBA.  If you can prove that the debt does not exist or is not enforceable, you may secure relief from the debt and the wage garnishment or offset.   A strong appeal may also convince the SBA that the debt should be settled rather than litigated in front of the OHA.

If you have defaulted on an SBA loan and are a federal employee, please contact Protect Law Group for a consultation at 1-888-756-9969 or visit our website at www.sba-attorneys.com

Why Hire Us to Help You with Your Treasury or SBA Debt Problems?

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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

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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

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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 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.



The client was personally guaranteed an SBA 7(a) loan to help with a relative’s new business venture.  After the business failed, Treasury was able to secure a recurring Treasury Offset Program (TOP) levy against our client’s monthly Social Security Benefits based on the claim that he owed over $1.2 million dollars.  We initially submitted a Cross-Servicing Dispute, but then, prepared and filed an Appeals Petition with the SBA Office of Hearings and Appeals (SBA OHA).  As a result of our efforts, we were able to convince the SBA to not only terminate the claimed debt of $1.2 million dollars against our client (without him having to file bankruptcy) but also refund the past recurring amounts that were offset from his Social Security Benefits in connection with the TOP levy.



Client personally guaranteed SBA 7(a) loan balance of $58,000.  The client received a notice of Intent to initiate Administrative Wage Garnishment (AWG) Proceedings.  We represented the client at the hearing and successfully defeated the AWG Order based on several legal and equitable grounds.

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