If you Owe more than $30,000 contact us for a case evaluation at (833) 428-0937
contact us for a free case evaluation at (833) 428-0937
Call us (833) 428-0937

SBA Loan Default: The Private Collection Agency

Book a Consultation Call

SBA Loan Default: The Private Collection Agency

https://youtu.be/YBHYGakMwIk

If you have defaulted on your SBA loan, a private collection agency may start contacting you to collect the SBA loan. Who and what are private collection agencies (PCAs)?

The Department of Treasury contracts with four private collection agencies, known by their common names: Performant, Pioneer Credit, CBE Group and Conserve. If you have been contacted by one of these four PCAs, your defaulted SBA loan has been referred to the Department of Treasury for collection who has contracted with one of the PCAs to collect for the Department of Treasury. The PCAs, of course, have a financial incentive to collect on the defaulted SBA loan.

The Claims Collection Act authorizes the Department of Treasury to contract with private collection agencies. However, the Department of Treasury must retain the authority to resolve disputes, compromise claims, end collection actions and refer claims to the Department of Justice.

The PCAs are bound by the Privacy Act and the Fair Debt Collection Practices Act and all other applicable federal and state laws and regulations relating to debt collection practices.

The PCAs are not only tasked with sending letters and making phone calls demanding payment, but they may also send notices of administrative wage garnishments. Therefore, any letters sent by a PCA should be opened and read immediately because if a notice of administrative wage garnishment is sent, you only have a short amount of time to file a request for hearing and challenge the administrative wage garnishment.

Furthermore, the Department of Treasury may use multiple PCAs to try to collect on the defaulted SBA loan; that is, by way of example, although Performant may have the first opportunity to collect, the debt may later be transferred to Pioneer for collection. As such, if a PCA contacted you regarding your SBA loan default, do not ignore the PCA, it is time to take action and deal with the debt.

If you are facing an SBA loan default, contact Protect Law Group today at www.sba-attorneys.com or 1-888-756-9969 to schedule your FREE initial consultation.

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

construction accident injury lawyer

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

slip and fall attorney

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

truck accident injury attorney

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.

$150,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

$150,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’sBureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.

$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.

$150,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

$150,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

The client personally guaranteed an SBA 7(a) loan for $150,000. His business revenue decreased significantly causing default and an accelerated balance of $143,000. The client received the SBA's Official 60-day notice with the debt scheduled for referral to the Treasury’s Bureau of Fiscal Service for aggressive collection in less than 26 days. We were hired to represent him, respond to the SBA's Official 60-day notice, and prevent enforced collection by the Treasury and the Department of Justice. We successfully negotiated a structured workout with an extended maturity date that included a reduction of the 14% interest rate and removal of substantial collection fees (30% of the loan balance), effectively saving the client over $242,000.

Read more Case Results

Related Content

Read more sba debt articles