San Diego Businesses May Take Advantage of New Small Business Reorganization
Small businesses facing mounting debt obligation from an SBA loan may seek a small business reorganization under the new bankruptcy law.
Dispute Credit Report
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.
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:
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.
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.
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.
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.
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.
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.
Our firm successfully resolved an SBA 7a loan in the original amount of $364,000 for a New Jersey-based borrower. The client filed Chapter 7 bankruptcy but the mortgage on his real estate securing the loan remained in place. The available equity amounted to $263,470 and the deficiency equaled $317,886.
We gathered the pertinent documentation and prepared a comprehensive collateral analysis. We negotiated directly with the SBA, obtaining a full release of the mortgage for $80,000.
Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’s ureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.
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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