Credit Report Dispute When the SBA Reports a Defaulted Loan
You discovered that the SBA reported a defaulted loan on your credit report. Read on to learn more about how to dispute your credit report.
Dispute Credit Report
You Should Review Your Credit Report Annually
As part of your annual to do list, obtain a copy of your credit report to check for negative credit marks. If you obtained an SBA loan or signed as a personal guarantor on an SBA loan and the loan went into default, the SBA may report the default on your credit report. To that end, federal law authorizes the SBA to report such defaulted debt to credit reporting agencies. Experian, TransUnion and Equifax comprise the three main credit reporting agencies.
A defaulted loan will negatively affect your credit score, make lenders unlikely to lend to you for purchases such as a car or house or it will make those purchases much more expensive in the form of a higher interest rate.
Negative Reporting by The SBA May Be Removed
You Need Evidence
In certain circumstances, you can force the removal of a negative credit mark. However, you need to prove that the defaulted debt must be removed. For instance, common reasons for removal of a negative credit reporting include the following:
You are not liable for the debt
The law considers the debt obsolete (too old for reporting)
The SBA made a mistake as to your identity
Your identity was stolen
In any case, you must obtain and provide evidence that shows why the negative credit reporting should be removed. Simply writing a letter asking the credit reporting agencies to re-investigate fails in accomplishing your goal more often than not.
File a Credit Report Dispute with the Credit Reporting Agencies
Again, simply writing a letter to the credit reporting agencies is not likely to accomplish much. An effective letter includes evidence and explains why the evidence exonerates you and dictates removal of the debt on your credit report.
Unfortunately, telephone disputes fail to create an adequate record for future use. Moreover, although federal law requires the nationwide credit reporting agencies to maintain a toll-free number for consumers, telephone access is not always consistent. Equifax, TransUnion and Experian paid a total of $2.5 million to settle charges by the FTC that they failed to meet legal requirements for telephone access.
Moreover, internet disputes make a dubious remedy as well. When a consumer makes a dispute through a nationwide credit reporting agency website, the website confides consumers to a "check-box" dispute form. This provides the credit reporting agencies with defenses premised on the lack of detail in a dispute. Furthermore, online disputes make documentation of your disputed file difficult.
In addition to including your evidence, your written dispute needs to be clear, complete and unambiguous. Furthermore, suggest steps for the re-investigation. Lastly, your steps should be aligned with federal law and federal regulations.
What If My Credit Report Dispute Fails?
If the SBA or the credit reporting agencies refuse to remove the debt, you may still have rights under the Fair Credit Reporting Act and other laws and may be able to pursue litigation. Contact a local attorney familiar with this type of law. You have the ability to file a complaint with the government and ask the Consumer Financial Protection Bureau to investigate on your behalf, as well.
How Can Protect Law Group Help?
Our experienced, federally authorized attorneys will aggressively pursue your rights. Protect Law Group takes a systematic, proven approach to your credit report issues regarding SBA loans. Protect Law Group first investigates your claim and determines whether grounds exist to dispute your credit report. If our investigation reveals evidence that exonerates you from the debt or requires removal of the negative credit mark, our skilled attorneys will draft your re-investigation letter with applicable documentation and evidence. Lastly, if the credit reporting agencies, SBA or other federal agency refuse to remove the negative credit mark in light of the evidence, our attorneys will draft a complaint to be filed with the Consumer Financial Protection Bureau on your behalf.
Contact Us For a Free Case Evaluation
Call our office today at 833-428-0937 and schedule your free initial case evaluation. Feel free to contact us via our website as well - www.sba-attorneys.com.
Why Hire Us to Help You with Your Treasury or SBA Debt Problems?
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.
$488,000 SBA 7A LOAN - SBA OHA LITIGATION
Clients 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 an SBA 7(a) loan that was referred to the Department of Treasury for collection. Treasury claimed our clients owed over $220,000 once it added its statutory collection fees and interest. We were able to negotiate a significant reduction of the total claimed amount from $220,000 to $119,000, saving the clients over $100,000 by arguing for a waiver of the statutory 28%-30% administrative fees and costs.
$1,200,000 SBA 7A LOAN - SBA OHA LITIGATION
Client 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.