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SBA Loan Default - The 60 Day Letter

Dealing with an SBA OIC case is hard. Allow one of our lawyers to settle SBA debt on your behalf. Talk to us about your SBA loan default situation.

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SBA Loan Default - The 60 Day Letter

You should not have to struggle to settle your SBA debt on your own. Instead, turn to one of our attorneys who specializes in SBA OIC claims. We are dedicated to helping you settle your SBA loan default.

If you are in default on your SBA loan, you will get what is termed a "60 day letter".  The following information should be included in a Federal agency's written communication with a debtor at least 60-days prior to referring a delinquent debt to the U.S. Department of the Treasury's Financial Management Service for debt collection (cross-servicing).  The information may be included in one letter or a series of letters.  The letter should include the following:

  • Nature and amount of the debt, including the basis for the debt.
  • Explanation of how interest, penalties, and administrative costs are added to the debt.
  • Date by which payment should be made to avoid late charges and enforced collection (generally, 30 days from the date the demand letter is mailed).
  • Name, address, and phone number of a contact person or office within the creditor agency.

Explain the agency's intent to enforce collection if debtor fails to pay by taking one or more of the following actions:

  • Offset the debtor's Federal payments, including income tax refunds, salary, certain benefit payments (such as Social Security), retirement, vendor, and travel reimbursements and advances.
  • Refer the debt to a private collection agency.
  • Report the debt to a credit bureau.
  • Garnish the debtor's wages through administrative wage garnishment (no court order required).
  • Refer the debt to the Department of Justice for litigation (comply with Executive Order 12988).
  • Refer the debt to the U.S. Department of the Treasury for any of the above-described collection actions (advise debtor that agencies are required to refer when debt is 180 days delinquent).

Explain how debtor exercises the opportunity to:

  • Inspect and copy agency's records related to the debt.
  • Request a review of agency's determination of the debt.
  • If applicable, request a waiver.
  • For purposes of salary offset or administrative wage garnishment, request a hearing.Enter into a reasonable written repayment agreement.

Advise the debtor of the following:

  • Notify agency if bankruptcy filed.
  • Penalties for knowingly making false or frivolous statements.
  • Excess collections will be refunded to the debtor, unless prohibited by law.
  • For Federal salary offset, up to 15% of current net disposable pay may be deducted every pay period until the debt is paid.
  • For joint income tax filers, spouse should file Form 8379 with the IRS to claim his/her share of tax refund.

The failure to include the above information may violate your rights and provide a basis for relief.  If you are struggling with circumstances that involve SBA loan default, you deserve professional aid! Our attorneys all know how to win SBA OIC cases.  Contact us and we will help you settle SBA debt once and for all.  After you schedule an appointment, you will consult with a devoted SBA OIC lawyer who will help you through your legal battle.  After your debt problem is resolved, you will never again have to worry about your SBA loan default problem haunting you.  Our team of lawyers has assisted many clients through the years settle SBA debt, stop administrative wage garnishment and tax offset.  Now it is your turn! You truly can settle SBA debt for good!

Why Hire Us to Help You with Your Treasury or SBA Debt Problems?

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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

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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

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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.

$375,000 SBA 504 LOAN - SBA OIC CASH SETTLEMENT

$375,000 SBA 504 LOAN - SBA OIC CASH SETTLEMENT

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.

$154,000 SBA COVID-19 EIDL - AUDIT REPRESENTATION & RELEASE OF COLLATERAL

$154,000 SBA COVID-19 EIDL - AUDIT REPRESENTATION & RELEASE OF COLLATERAL

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.

$166,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

$166,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

Clients executed personal and corporate guarantees for an SBA 7(a) loan from a Preferred Lender Provider (PLP). The borrower corporation defaulted on the loan exposing all collateral pledged by the Clients. The SBA subsequently acquired the loan balance from the PLP, including the right to collect against all guarantors. The SBA sent the Official Pre-Referral Notice to the guarantors giving them sixty (60) days to either pay the outstanding balance in full, negotiate a Repayment (Offer in Compromise (OIC) or Structured Workout (SW)), challenge their alleged guarantor liability or file a Request for Hearing (Appeals Petition) with the SBA Office of Hearings & Appeals.

Because the Clients were not financially eligible for an OIC, they opted for Structured Workout negotiations directly with the SBA before the debt was transferred to the Bureau of Fiscal Service, a division of the U.S. Department of Treasury for enforced collection.

The Firm was hired to negotiate a global Workout Agreement directly with the SBA to resolve the personal and corporate guarantees. After submitting the Structured Workout proposal, the assigned SBA Loan Specialist approved the requested terms in under ten (10) days without any lengthy back and forth negotiations.

The favorable terms of the Workout included an extended maturity at an affordable principal amount, along with a significantly reduced interest rate saving the Clients approximately $181,000 in administrative fees, penalties and interest (contract interest rate and Current Value of Funds Rate (CVFR)) as authorized by 31 U.S.C. § 3717(e) had the SBA loan been transferred to BFS.

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