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Commentary on the Government Shutdown: Seize the opportunity to settle your SBA or Treasury’s Bureau of Fiscal Service Debt

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Commentary on the Government Shutdown: Seize the opportunity to settle your SBA or Treasury’s Bureau of Fiscal Service Debt

The government shutdown began December 22, 2018 after Trump and congressional Democrats could not agree on funding for the president's long-sought southern border wall.  Trump and Democrats have remained at a stalemate with no discernible progress in sight.


The president told Democrats he was willing to have the government shut down for "years" over his border wall funding promise.  The White House issued a veto threat on bills, known as continuing resolutions, that would fund government through February 28. Those proposed measures, however, did not provide funding for the wall.  9 out of 15 federal departments are closed, as well as dozens of federal agencies, including the SBA and Treasury’s Bureau of Fiscal Service. However, several funding bills were passed and signed, so about 75 percent of government services are unaffected by the shutdown.  The SBA and Treasury’s BFS have initiated their shutdown plans and are among the federal agencies affected by this shutdown.

More than 420,000 federal employees have been forced back to work without pay, including agents from the FBI, ATF, DEA and CBP, as well as staff from the State Department, Coast Guard, IRS and Department of Homeland Security.  Another 380,000 workers have been furloughed from departments including NASA, the State Department, the National Park Service, the Forest Service, the Transportation Department, the Department of Housing and Urban Development, the SBA and the Department of Treasury.

Friday, January 11, was the first paycheck that federal government workers missed.  Tuesday, January 22, will be the second paycheck that government employees will miss if a compromise is not reached.

In an attempt to help government employees not receiving a paycheck, the federal office of personnel management “sample letters” to use as a guide when working with creditors during the furlough.

Because furloughed federal employees are not confident that these “sample letters” will be effective, many have set up GoFund Me pages, sought out free meals and even went to their local pawnshops in order to cope with the financial burden resulting from the government shutdown.

Due to the government shutdown, federal employees of the SBA and BFS – some of whom may have previously worked on your case and contacted you to collect on your SBA or BFS debt, may now (post-shutdown) have a better understanding of your personal financial situation since your small business failed.

A furloughed federal employee was interviewed recently who said she was “used to hearing from people in a financial bind who are looking for help.”  But, this federal employee now finds herself among the ranks of these same people with financial hardship due to this partial government shutdown that has left her furloughed and without a paycheck.

For the 800,000 plus federal employees across the country, this upcoming Tuesday will mark the 5th week of the shutdown (since December 22, 2018) and the second time that they will not receive a paycheck to pay for their fixed living expenses.

Of the 800,000 federal employees not receiving a paycheck, a good portion of them being SBA or BFS workers may have previously come in contact with your SBA case, your SBA Offer in Compromise or your financials when deciding the nature and extent of your financial hardship or inability to pay your SBA debt associated with Administrative Wage Garnishment, Administrative Offset or Treasury Program Offset against your federal benefits.

With this current government shutdown and their own experience having to squeeze every single dollar to pay for basic living expenses such as food, shelter, health care, child care or transportation, maybe now (post-shutdown), the SBA and BFS employees will have a much better perspective and more empathy as to what every SBA or Treasury debtor like yourself has been experiencing in terms of financial hardship.

While no reasonable person advocates for a government shutdown, this current situation may provide you (the SBA or BFS debtor) with an opportunity to attempt to settle your SBA or Treasury debt once the shutdown finally ends and the government reopens.

The reason why you ought to consider submitting a proposed settlement of your SBA or Treasury debt lies in what the SBA or Treasury workers have had to experience for themselves during the shutdown – and that is financial hardship – the same or similar circumstances which you have experienced or continue to experience – since your SBA loan when into default and your small business failed.

The admonition to walk a mile in someone else's shoes means before judging someone, you must understand his experiences, challenges, thought processes, etc.

Maybe now that furloughed or SBA and Treasury employees who have been forced back to work without pay have tasted financial hardship as a result of this government shutdown, they may have a more reasonable perspective in terms of relating to how your SBA debt has been causing you financial hardship and thus, they may be more amenable to accepting a compromise or other alternative workout of your SBA or BFS debt in the future after this shutdown ends.

If you are facing collection action on an SBA debt from the SBA, Treasury’s BFS or a Private Collection Agency, contact us today for a FREE initial case evaluation with an experienced SBA or Treasury workout attorney at 1-888-756-9969

We can analyze your SBA debt, Administrative Wage Garnishment Notice, BFS or Private Collection Agency problem and advise you on a range of potential solutions.

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Client personally guaranteed SBA 504 loan balance of $375,000.  Debt had been cross-referred to Treasury at the time we got involved with the case.  We successfully had debt recalled to the SBA where we then presented an SBA OIC that was accepted for $58,000.



Clients personally guaranteed SBA 7(a) loan balance of over $300,000.  Clients also pledged their home as additional collateral.  SBA OIC accepted for $87,000 with full release of lien against home.



Clients personally guaranteed SBA 504 loan balance of $750,000.  Clients also pledged the business’s equipment/inventory and their home as additional collateral.  Clients had agreed to a voluntary sale of their home to pay down the balance.  We intervened and rejected the proposed home sale.  Instead, we negotiated an acceptable term repayment agreement and release of lien on the home.

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