SBA Wage Garnishment: What Can You Do About It?
If you default on your SBA loan, there are a number of ways it can be collected. We take a look at wage garnishment and what you can do about it.
We often provide complimentary case evaluations for SBA loan debtors who are currently dealing with the DOT (Department of Treasury) for an old SBA debt that the DOT claims is “due and owing.” More often than not, when the Firm is hired, we not only try to obtain the client’s documents from their former “non-attorney” representatives, but also the subject loan and debt records from the SBA and the Bureau of Fiscal Service. We do this in order to carefully examine what happened and if there are any potential issues that may affect the client’s liability and the nature and extent of the SBA debt based on the client’s financial ability to repay.
In several reviews of our cases, we sometimes find that the SBA debtors had sought help from an “SBA debt settlement company.” The SBA debtors’ problems were never resolved properly and that their cases had eventually been referred to the DOT even after having been assured by the SBA debt settlement company salesperson that it would settle the SBA loan debt with either the participating lender or the SBA, itself through an SBA OIC (SBA Offer in Compromise).
Of course, one of the only things the “SBA debt settlement company” provided by way of assistance were some worthless “cut and paste” financial documents and so-called “SBA” advice that made no sense under the current SBA Standard Operating Procedures (SOPs) and Code of Federal Regulations (CFRs). When these non-attorney SBA "debt consultants" try to provide advice on SBA SOPs, applicable CFRs or federal bankruptcy law, they are conceivably violating prohibitions against non-attorneys practicing law without a license. Needless to say, when the SBA debtors seek our assistance, we ultimately find, that had they initially sought representation from federally authorized and qualified SBA or DOT counsel, their current situation could have possibly been avoided.
We, at Protect Law Group, APC, take offense that these “SBA debt settlement companies” continue to advertise their “SBA” debt resolution services as they are arguably engaging in the unauthorized practice of law. But, the fact that people with SBA loan problems still sign up for these “services” raises the question why do people believe the junk they are selling?
We think the real reason is twofold. First, people generally want to pay back the SBA debt and they believe that payment of some of the SBA debt is better than none at all. The second reason is fear of having to file bankruptcy. People are afraid of losing property and of the damage to their credit. While these are legitimate concerns, it does not explain why folks do not seek out a competent and federally authorized SBA professional to advise on these complex issues yet they fall hook, line and sinker for some fast-talking snake oil SBA debt settlement salesman over the telephone.
If you are facing an SBA debt or DOT collection issues, we implore you to seek out a federally authorized SBA or DOT attorney. Just because you seek advice, it does not commit you to signing up with the person conducting your Case Evaluation. But, because our Firm attorneys are experienced in all aspects of the SBA administrative debt collection process and other alternatives including bankruptcy, we can offer you meaningful solutions to your SBA debt or DOT collection problems.
You should not have to struggle to settle SBA debt on your own. Instead, turn to one of our attorneys who specializes in SBA OIC claims. We are dedicated to helping you settle SBA loan default.
If you are struggling with circumstances that involve SBA loan default, you deserve professional help! Our attorneys all know how to win SBA OIC cases. If you contact us, we can help you settle SBA debt once and for all. After you schedule an appointment, you confer with a dedicated SBA OIC lawyer who will help you through your administrative legal battle. After your claim is resolved, you never again have to worry about your SBA loan default problem haunting you. Our team of lawyers has assisted many clients through the years. Now it is your turn! You truly can settle SBA debt for good!
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.
Client personally guaranteed SBA 7(a) loan balance of over $150,000. Business failed and eventually shut down. SBA then pursued client for the balance. We intervened and was able to present an SBA OIC that was accepted for $30,000.
Client's small business obtained an SBA COVID EIDL for $301,000 pledging collateral by executing the Note, Unconditional Guarantee and Security Agreement. The business defaulted on the loan and the SBA CESC called the Note and Guarantee, accelerated the principal balance due, accrued interest and retracted the 30-year term schedule.
The loan was transferred to the Treasury's Bureau of Fiscal Service which resulted in the statutory addition of $90,000+ in administrative fees, costs, penalties and interest with the total debt now at $391.000+. Treasury also initiated a Treasury Offset Program (TOP) levy against the client's federal contractor payments for the full amount each month - intercepting all of its revenue and pushing the business to the brink of bankruptcy.
The Firm was hired to investigate and find an alternate solution to the bankruptcy option. After submitting formal production requests for all government records, it was discovered that the SBA failed to send the required Official 60-Day Pre-Referral Notice to the borrower and guarantor prior to referring the debt to Treasury. This procedural due process violation served as the basis to submit a Cross-Servicing Dispute to recall the debt from Treasury back to the SBA and to negotiate a reinstatement of the original 30-year maturity date, a modified workout, cessation of the TOP levy against the federal contractor payments and removal of the $90,000+ Treasury-based collection fees, interest and penalties.
Our firm successfully negotiated an SBA offer in compromise (SBA OIC), settling a $974,535.93 SBA loan balance for just $18,000. The offerors, personal guarantors on an SBA 7(a) loan, originally obtained financing to purchase a commercial building in Lancaster, California.
The borrower filed for bankruptcy, and the third-party lender (TPL) foreclosed on the property. Despite the loan default, the SBA pursued the offerors for repayment. Given their limited income, lack of significant assets, and approaching retirement, we presented a strong case demonstrating their financial hardship.
Through strategic negotiations, we secured a favorable SBA settlement, reducing the nearly $1 million debt to a fraction of the amount owed. This outcome allowed the offerors to resolve their liability without prolonged financial strain.
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