How to Defend Against an Administrative Wage Garnishment Notice
If you've been served an administrative wage garnishment notice, you need to know how to defend yourself. Read on to learn the best defenses.
The federal shutdown is over and SBA & Treasury collections are resuming fast. Learn what to expect and how Protect Law Group can defend you before referrals to Treasury begin.
Book a Consultation CallThe federal government shutdown is officially over. During the shutdown, more than 670,000 federal employees were furloughed and 730,000 worked without pay (Bipartisan Policy Center). SBA and Treasury operations stalled, freezing billions in activity and creating significant backlogs.
This article explains what SBA debtors should expect now that enforcement has resumed.
The shutdown caused one of the largest SBA operational stoppages in modern history:
• SBA case processing froze
• FOIA discovery, OIC, Workout/Repayment and hardship requests paused
• Treasury cross-servicing referrals and collection action operated at reduced capacity
• Billions in lending & servicing actions stalled
While Treasury did not fully shut down, cross-servicing and enforced collection activity operated on reduced capacity.
SBA previously estimated that in a major shutdown, it is unable to deliver over $5.3 billion in loans to 10,000+ businesses, with an estimated $4.5 billion per day frozen.
This shutdown was no different—except that the volume was even higher due to unprecedented SBA loan activity since COVID.
With 1.4 million federal employees either furloughed or working without pay returning to normal operations, federal agencies are aggressively moving through their backlogs.
Borrowers should expect:
These are time-sensitive and trigger major rights and deadlines.
Especially for delinquent 7(a), 504, and EIDL loans.
Files previously on hold may are now being sent to Treasury for enforced collection.
This may include:
SBA loan specialists generally expedite their “catch up” efforts by tightening review standards - often resulting in arbitrary and capricious decisions.
Any pending requests are being processed in the order received.
Here is the harsh reality:
If you wait to act, you may be too late.
After shutdowns, federal agencies typically:
SBA debtors who act before their case is pulled into the backlog should have more options and better outcomes.
Regardless of the shutdown, you have important legal rights:
You must be notified before your debt is referred to Treasury's Bureau of Fiscal Service and substantial collection fees are assessed
Including legal enforceability, hardship, identity, documentation, or calculation errors.
Treasury and SBA both allow financial hardship-based accommodations.
Critical to verifying the validity of the claim.
You are not required to deal with SBA or Treasury alone. Attorneys authorized by 5 U.S.C. Section 500(b) can represent you before the SBA, Treasury, PCA, DoJ's National Central Intake Facility (NCIF) or in administrative appeals before U.S. Administrative Law Judges (ALJs) at the SBA Office of Hearings & Appeals Court (OHA).
Protect Law Group Attorneys help borrowers throughout the United States with the full spectrum of SBA & Treasury debt options:
Monthly payment relief based on documented financial hardship.
Especially useful if the debt is still with SBA (pre-Treasury).
Potentially settling for less than the full balance if you qualify.
Many cases involve SBA servicing errors that can be revealed through FOIA/PA discovery.
Bankruptcy does not automatically eliminate SBA or Treasury debt, but it can:
In some cases, we can advocate for financial hardship or recall from Treasury.
To protect client confidentiality, these examples reflect general outcomes achieved by the Firm:
You can dramatically improve your position before the backlog reaches your debt case.
Tax returns, bank statements, pay stubs, and financials.
Do not negotiate blind.
Where is the debt?
SBA? Treasury? BFS? DOJ?
One size does not fit all. Every SBA debtor's goals and risks differ.
This is your chance to get ahead—before the wave of notices hits.
This single step can preserve your rights and dramatically affect the outcome.
The shutdown may be over, but the SBA and Treasury collection surge is about to begin. Debtors who prepare now will have more options—and better outcomes—than those who wait.
If you have SBA or Treasury debt, contact Protect Law Group today for a Confidential Case Evaluation:
👉 Visit: www.SBA-Attorneys.com
👉 Call: 888-756-9969
👉 Email: Info@ProtectLawGroup.com
Do not wait for your SBA debt to get swept into the backlog. Get ahead of it. Protect yourself and your rights.
Our SBA Attorneys have guided thousands of small businesses through reviews, contested or negotiated debts assessed against owners, officers and guarantors, and litigated cases at the SBA Office of Hearings & Appeals (OHA) Court before presiding Administrative Law Judges (ALJs).
This article is provided for informational purposes only and does not constitute legal advice. Consult a qualified SBA-Attorney for advice regarding your individual situation.
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 assisted a client in closing an SBA Disaster Loan tied to a COVID-19 Economic Injury Disaster Loan (EIDL). The borrower obtained an EIDL loan of $153,800, but due to the prolonged economic impact of the COVID-19 pandemic, the business was unable to recover and ultimately closed.
As part of the business closure review and audit, we worked closely with the SBA to negotiate a resolution. The borrower was required to pay only $1,625 to release the remaining collateral, effectively closing the matter without further financial liability for the owner/officer.
This case highlights the importance of strategic negotiations when dealing with SBA settlements, particularly for businesses that have shut down due to unforeseen economic challenges. If you or your business are struggling with SBA loan debt, we focus on SBA Offer in Compromise (SBA OIC) solutions to help settle outstanding obligations efficiently.
Client personally guaranteed an SBA 7(a) loan for $100,000 from the lender. The SBA loan went into early default in 2006 less than 12 months from disbursement. The SBA paid the 7(a) guaranty monies to the lender and subsequently acquired the deficiency balance of about $96,000, including the right to collect against the guarantor. However, the SBA sent the Official 60-Day Due Process Notice to the Client's defunct business address instead of his personal residence, which he never received. As a result, the debt was transferred to Treasury's Bureau of Fiscal Service where substantial collection fees were assessed, including accrued interest per the promissory note. Treasury eventually referred the debt to a Private Collection Agency (PCA) - Pioneer Credit Recovery, Inc. Pioneer sent a demand letter claiming a debt balance of almost $310,000 - a shocking 223% increase from the original loan amount assigned to the SBA. Client's social security disability benefits were seized through the Treasury Offset Program (TOP). Client hired the Firm to represent him as the debt continued to snowball despite seizure of his social security benefits and federal tax refunds as the involuntary payments were first applied to Treasury's collection fees, then to accrued interest with minimal allocation to the SBA principal balance.
We initially submitted a Cross-Servicing Dispute (CSD) challenging the referral of the debt to Treasury based on the defective notice sent to the defunct business address. Despite overwhelming evidence proving a violation of the Client's Due Process rights, the SBA still rejected the CSD. As a result, an Appeals Petition was filed with the SBA Office of Hearings & Appeals (OHA) Court challenging the SBA decision and its certification the debt was legally enforceable in the amount claimed. After several months of litigation before the SBA OHA Court, our Firm Attorney successfully negotiated an Offer in Compromise (OIC) Term Workout with the SBA Supervising Trial Attorney for $82,000 spread over a term of 74 months at a significantly reduced interest rate saving the Client an estimated $241,000 in Treasury collection fees, accrued interest (contract interest rate and Current Value of Funds Rate (CVFR)), and the PCA contingency fee.
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.
.jpg)
