We are attorneys that exclusively work on SBA OIC cases and other federal debt issues.
Book a Consultation CallThe Massachusetts Bankruptcy Court, pursuant to an enforcement action brought by the United States Trustee, ordered sanctions and issued an injunction against a bankruptcy petition preparer in Lawrence, Massachusetts. The case can be found here. The petition preparer, Pinnacle Financial Consulting, LLC (“Pinnacle”) along with its owner, were ordered to pay monetary sanctions, return money to bankruptcy debtors and were enjoined from filing any future bankruptcy petitions in Massachusetts.
The gist of the U.S. Trustee’s complaint and the Court’s findings was that Pinnacle engaged in the unauthorized practice of law when it charged consumers for the preparation of bankruptcy petitions. There were no lawyers at Pinnacle. However, the fact that Pinnacle’s president went to law school (but never was admitted to the bar) was used to suggest to consumers that the company had legal expertise. In fact, Pinnacle touted a “Pinnacle System” that it suggested had significant value. Non-attorney bankruptcy petition preparers are not illegal, per se, but they are not allowed to advise clients or do anything more than simply type forms. By emphasizing its supposed expertise, Pinnacle was acting as more than just a typist, and it encroached on a province only allowed to licensed attorneys.
It turns out for good reason. Consumers are usually harmed by operators who talk a good game but who are unregulated and unaccountable. In this case, Pinnacle falsely advertised its discharge rate, and it also guided clients on how to claim the Minnesota exemptions instead those in place here in Massachusetts.
It is in immigrant communities, like Lawrence, Massachusetts, that these types of organizations usually thrive. In Latino communities, especially, such organizations have a special ability to mislead because, in certain Latin American countries, the popular term “notario” has a very different meaning from the term “notary” here. To help protect consumers, the U.S. Trustee should consider bringing more enforcement actions of this nature.
Though consumers sometimes think that the bankruptcy systems will protect them simply because they are needy and hard-up, that is not always the case. Bankruptcy is an adversarial process, and there is little recourse for a consumer who loses property or has his case dismissed due to filing errors or poor strategic choices.
In the SBA context, there are many non-attorney firms advertising their SBA loan debt resolution services. However, as noted above, the same argument can apply and questions need to be answered as such, "can non-attorney bankers or former disbarred attorneys represent an SBA debtor's interest when he or she is not authorized to advise on legal matters such as SBA administrative law (i.e. SBA SOPs, Code of Federal Regulations (CFRs), federal law, bankruptcy issues and exemptions) or appeal your case to the SBA Office of Hearing & Appeals and be able to argue SBA OHA decisions and other procedural and substantive legal issues before an Administrative Law Judge (ALJ)?"
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.
Clients' 7(a) loan was referred to Treasury's Bureau of Fiscal Service for enforced collection in 2015. They not only personally guaranteed the loan, but also pledged their primary residence as additional collateral. One of the clients filed for Chapter 7 bankruptcy thinking that it would discharge the SBA 7(a) lien encumbering their home. They later discovered that they were mistakenly advised. The Firm was subsequently hired to review their case and defend against a series of collection actions. Eventually, we were able to negotiate a structured workout for $180,000 directly with the SBA, saving them approximately $250,000 (by reducing the default interest rate and removing Treasury's substantial collection fees) and from possible foreclosure.
Our firm successfully resolved an SBA COVID-19 Economic Injury Disaster Loan (EIDL) in the original amount of $150,000 for a Florida-based borrower. The loan, issued on June 4, 2020, was secured by business assets and potential personal liability through the SBA's Security Agreement.
Following the permanent closure of the business, we guided the client through the SBA’s Business Closure Review process and prepared a comprehensive collateral analysis. We negotiated directly with the SBA, obtaining a full release of the business collateral for $2,910 — satisfying the borrower’s obligations under the Security Agreement and eliminating any further enforcement risk against the pledged assets.
Client received the SBA's Official 60-Day Notice for a loan that was obtained by her small business in 2001. The SBA loan went into default in 2004 but after hearing nothing from the SBA lender or the SBA for 20 years, out of the blue, she received the SBA's collection due process notice which provided her with only one of four options: (1) repay the entire accelerated balance immediately; (2) negotiate a repayment arrangement; (3) challenge the legal enforceability of the debt with evidence; or (4) request an OHA hearing before a U.S. Administrative Law Judge.
Client hired the Firm to represent her with only 13 days left before the expiration deadline to respond to the SBA's Official 60-Day Notice. The Firm attorneys immediately researched the SBA's Official loan database to obtain information regarding the 7(a) loan. Thereafter, the Firm attorneys conducted legal research and asserted certain affirmative defenses challenging the legal enforceability of the debt. A written response was timely filed to the 60-Day Notice with the SBA subsequently agreeing with the client's affirmative defenses and legal arguments. As a result, the SBA rendered a decision immediately terminating collection of the debt against the client's alleged personal guarantee liability saving her $50,000.
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