Want to Settle SBA Loan Debt? Here's How
If you want to settle SBA loan debt but don't know how, then the answer is simple. Click here for your ultimate guide today!
Looking for SBA debt relief options? Click here to find out how submitting SBA offers in compromise can reduce your non-tax debt!
Book a Consultation CallWhen you got the SBA loan, you had every intention of paying it back. Unfortunately, you are now struggling just to keep yourself and your business afloat. However, some viable options existif you need SBA debt relief.
Some of these options you may not have even heard of yet. One of them that is used with more success than not is when you submit an offer of compromise. Submitting an offer in compromise is just one way to relieve some of your ongoing business and financial pressure.
You may also negotiate with your lender so you can create a workout agreement that is better suited to your new financial circumstances. Please keep reading if you want to learn more about submitting an offer in compromise and how it can reduce your non-tax debt.
It is actually quite normal for small businesses to struggle to repay their debts. The Bureau of Labor reports that 20% fail in their first year. 50% of small businesses fail by their fifth year.
This is why the SBA approves millions of dollars in loans and guarantees each year. They want to ensure that you have every opportunity to succeed and grow. When you struggle to pay back your SBA loan, you can even seek SBA debt relief.
One option when seeking debt relief is to submit an offer in compromise to the SBA. The SBA will review your circumstances and determine if they accept or deny your offer. To help you better understand how submitting an offer of compromise can relieve some of your SBA debt, here are some strategies that explain the process.
As a personal guarantor, if your business defaults on an SBA loan you remain personally liable. The SBA offer in compromise program allows personal guarantors to pay less than the full amount of the debt to settle. However, your business must be closed to take advantage of the offer in compromise. The SBA has made exceptions, but it's a rare thing for them to do.
On top of closing your business, you need to consult with a legal representative for you to get the best shot at the SBA approving your offers in compromise program.
Your SBA Offer in Compromise Attorney can help you navigate the offer in compromise waters.
Overall your offer in compromise should be presented to the SBA in a compelling manner and be numbers-driven. The numbers must be factual and backed up by documents. The numbers also need to demonstrate to the SBA that they cannot get the loan money you owe them.
It understandable that small business owners turn to the SBA when they need to start or grow their business. But if your business begins to fail, the SBA loan debt is now an issue. Now that you're facing SBA loan debt, it is usually necessary to liquidate the business assets.
Unfortunately, the liquidation often fails to cover the balance of the loan. As such, any deficiency falls on you, the personal guarantor.
The SBA, via the Department of Treasury, could order your employer or the IRS to garnish any disposable pay to satisfy the delinquent non-tax debt you owe to the United States if you defaulted on an SBA loan. They do this through the Administrative Wage Garnishment (AWG) process. SBA debtors do have the right to have an official hearing if they receive a notice of intended AWG.
Using experienced counsel to present evidence and legal arguments in your defense will increase your chances of defeating the AWG.
The SBA loan default statute of limitations consists of the amount of time that a lender has to sue a borrower for defaulting on their loan. The law varies depending on where the borrower lives.
However, once the SBA or the Treasury service your debt, no statute of limitations exists as to administrative remedies such as administrative wage garnishment, tax refund offset or Social Security offset. A six year statute of limitations applies to the government's ability to sue you for breach of contract / guarantee. However, this only applies to filing a law suit, it does not apply to administrative remedies.
The SBA lenders can provide loan deferments to borrowers when they want to modify or suspend their payments for a time. Loan deferments can be for a little as 3 months.
SBA Attorneys range from providing SBA loan default expertise to helping you with your SBA offers in compromise.
An assertive attorney experienced in Offer in Compromise cases can help you settle an SBA loan.
Reach out to Protect Law Group. Protect Law Group can make a difference in your SBA debt relief case. Having someone dedicated to helping you settle an SBA debt relief case will help you turn the page so you can move forward with the rest of your life.
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 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.
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.
Client personally guaranteed an SBA 7(a) loan to help with a relative’s new business venture. After the business failed, Treasury was able to secure a recurring Treasury Offset Program (TOP) levy against his monthly Social Security Benefits based on the claim that he owed over $1.2 million dollars. We initially submitted a Cross-Servicing Dispute, but then, prepared and filed an Appeals Petition with the SBA Office of Hearings and Appeals (SBA OHA). As a result of our efforts, we were able to convince the SBA to not only terminate the claimed debt of $1.2 million dollars against our client (without him having to file bankruptcy) but also refund the past recurring amounts that were offset from his Social Security Benefits in connection with the TOP levy.
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