The transcript of the video follows below for further review.
The Debt Collection Improvement Act of 1996 requires the the Department of the Treasury (DOT) to maintain a schedule of private collection agencies (PCAs), which are private sector companies with expertise in the area of debt collection, to assist the government in its debt collection efforts. As part of the Cross-Servicing program (wherein debts owed to government agencies such as the SBA are referred to the DOT for collection) the DOT attempts to collect delinquent debt through several means, including demand letters, telephone calls, the Treasury Offset Program (TOP), administrative wage garnishment, and credit bureau reporting. Once the DOT has at the very least sent a demand letter and possibly tried other collection efforts, the DOT refers debt collection to one of four PCAs. The activities of the PCAs are monitored by the personnel of the Receivables Management and Debt Services Division of Debt Management Services (DMS).
What is a private collection agency? A private collection agency (PCA) is a private sector company specializing in the collection of delinquent debt. A PCA will attempt to find and contact a debtor by searching various databases, making telephone calls, and sending collection letters. Once the debtor is located and contacted, the PCA will encourage the debtor to satisfy the debt. A PCA may help the DOT resolve the debts through negotiating payment in full, a payment agreement, utilizing administrative wage garnishment, or finding that the debt may be resolved administratively. Incredibly, often times dealing with a PCA is more productive than dealing directly with the DOT.
Fiscal Service awards PCA Task Orders. Fiscal Service awards Task Orders to PCAs for debt collection services under a General Services Administration Schedule. Fiscal Services’s current Task Orders to enlist the services of PCA contractors became effective on March 12, 2012. These Task Orders were awarded in order to increase the recovery of and resolve delinquent non-tax federal debts. The Task Orders were awarded for one base year, with four one-year options available. Fiscal Service awarded the following contractors a debt collection Task Order to provide delinquent debt collection services:
The CBE Group, Inc.
ConServe, Inc.
Performant Recovery, Inc.
Pioneer Credit Recovery, Inc.
PCA regulation. The collection efforts of the PCAs are governed by various federal and state laws, including, but not limited to, the Fair Debt Collection Practices Act (FDCPA), the Federal Claims Collection Standards (FCCS), and the Privacy Act. If the first PCA is unable to successfully resolve or collect a debt, the debt is then referred to a second PCA. The PCAs are compensated on a performance basis.
If you have defaulted on an SBA loan please contact Protect Law Group at 1-888-756-9969 for a consultation with one of our SBA workout attorneys or contact us online.
We analyze your SBA loan problems and advise you on potential solutions such as an SBA offer in compromise for your SBA loan default.
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 personally guaranteed SBA 7(a) loan balance of $58,000. The client received a notice of Intent to initiate Administrative Wage Garnishment (AWG) Proceedings. We represented the client at the hearing and successfully defeated the AWG Order based on several legal and equitable grounds.
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.
Client's small business obtained an SBA COVID EIDL for $301,000 pledging collateral by executing the Note, Unconditional Guarantee and Security Agreement. The business defaulted on the loan and the SBA CESC called the Note and Guarantee, accelerated the principal balance due, accrued interest and retracted the 30-year term schedule.
The loan was transferred to the Treasury's Bureau of Fiscal Service which resulted in the statutory addition of $90,000+ in administrative fees, costs, penalties and interest with the total debt now at $391.000+. Treasury also initiated a Treasury Offset Program (TOP) levy against the client's federal contractor payments for the full amount each month - intercepting all of its revenue and pushing the business to the brink of bankruptcy.
The Firm was hired to investigate and find an alternate solution to the bankruptcy option. After submitting formal production requests for all government records, it was discovered that the SBA failed to send the required Official 60-Day Pre-Referral Notice to the borrower and guarantor prior to referring the debt to Treasury. This procedural due process violation served as the basis to submit a Cross-Servicing Dispute to recall the debt from Treasury back to the SBA and to negotiate a reinstatement of the original 30-year maturity date, a modified workout, cessation of the TOP levy against the federal contractor payments and removal of the $90,000+ Treasury-based collection fees, interest and penalties.
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