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.
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.
Small business and guarantors obtained an SBA COVID-EIDL loan for $1,000,000. Clients defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for collection. Treasury added nearly $500,000 in collection fees totaling $1,500,000. Clients were served with the SBA's Official 60-Day Notice and exercised the Repayment option by applying for the SBA’s Hardship Accommodation Plan. However, their application was summarily rejected by the SBA without providing any meaningful reasons. Clients hired the Firm to represent them against the SBA, Treasury and a Private Collection Agency. After securing government records through discovery, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury. During litigation and before the OHA court issued a final Decision and Order, the Firm successfully negotiated a reinstatement and recall of the loan back to the SBA, a modification of the original repayment terms, termination of Treasury's enforced collection and removal of the statutory collection fees.
Clients executed several trust deeds pledging seven (7) real estate properties and unconditional personal guarantees for an SBA 7(a) loan from the participating lender. The clients' small business failed and eventually defaulted on repayment of the loan exposing all collateral pledged by the clients. The SBA subsequently acquired the loan balance from the lender, including the right to liquidate and collect all pledged collateral pursuant to the trust deed instruments.
The Firm was hired to negotiate separate release of lien proposals for all 7 real estate properties. In preparation for the work assignment, the Firm Attorneys initiated discovery to secure records from the SBA and Treasury's Bureau of Fiscal Service. After reviewing the records and understanding the interplay between the lender and the SBA, the attorneys then prepared, submitted and negotiated the release of lien (ROL) for each of the 7 real estate properties for consideration.
After submitting the proposals, the assigned SBA Loan Specialists approved each ROL package - significantly reducing the total SBA debt claimed.
.jpg)
