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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.
The client personally guaranteed an SBA 504 loan balance of $375,000. Debt had been cross-referred to the 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.
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.
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.
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