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In today's complex business landscape, many entrepreneurs and small business owners face financial challenges that can lead to overwhelming debt. One solution offered by the Small Business Administration (SBA) is the "Offer in Compromise."
Book a Consultation CallIn today's complex business landscape, many entrepreneurs and small business owners face financial challenges that can lead to overwhelming debt. One potential solution offered by the Small Business Administration (SBA) is the "Offer in Compromise" program. This article delves into the intricacies of SBA Offers in Compromise and highlights the invaluable role legal professionals play in helping businesses navigate this process successfully.
An SBA Offer in Compromise is a debt settlement program designed to assist personal guarantors in resolving their outstanding SBA loan debt for less than the full amount owed. It provides a lifeline to businesses facing financial hardship and is particularly relevant in today's economic climate.
To qualify for an SBA Offer in Compromise, businesses must meet specific criteria outlined by the Small Business Administration. These criteria often include demonstrating financial distress, an inability to repay the full debt, and a willingness to cooperate with the SBA.
SBA Offers in Compromise offer several advantages, including debt reduction, avoiding legal action, and the opportunity for a fresh financial start. These benefits make it an attractive option for business owners in dire financial straits.
Navigating the SBA's Offer in Compromise program can be a daunting task. Legal professionals with experience in this area can provide invaluable guidance, ensuring that businesses meet all eligibility requirements and adhere to the necessary legal procedures.
One of the most critical aspects of the SBA Offers in Compromise process is negotiating with the SBA itself. Legal professionals are well-versed in negotiation strategies and can work to secure the best possible settlement terms for their clients.
Legal professionals understand the legal rights and protections available to businesses under the SBA Offers in Compromise program. They can advocate on behalf of their clients, ensuring that their rights are protected throughout the process.
Preparing a compelling offer package is crucial to a successful SBA Offer in Compromise. Legal professionals have the expertise to gather and present all required financial documentation and persuasive arguments to support their clients' cases.
At Protect Law Group, we are dedicated to helping business owners overcome financial challenges and achieve a fresh start. Our team of experienced legal professionals works exclusively with SBA Offers in Compromise and will work tirelessly to secure the best possible outcome for you.
We understand that every person's situation is unique. That's why we provide personalized solutions tailored to your specific circumstances. Whether you owned a small startup or an established enterprise, we have the expertise to assist you.
We believe in open and transparent communication with our clients. Throughout the SBA Offers in Compromise process, we will keep you informed every step of the way, ensuring you understand the progress and potential outcomes.
In conclusion, SBA Offers in Compromise are a lifeline for business owners, offering the hope of financial recovery and a fresh start. Legal professionals play a pivotal role in guiding businesses through this complex process, ensuring eligibility, protecting rights, and negotiating favorable terms.
If you are facing financial hardship and considering an SBA Offer in Compromise, don't go it alone. Seek the expertise of experienced legal professionals who can navigate this challenging terrain with you.
What is the primary goal of an SBA Offer in Compromise?
The primary goal of an SBA Offer in Compromise is to help business owners in financial distress settle their SBA loan debt for less than the full amount owed, providing them with a fresh start.
Who is eligible for an SBA Offer in Compromise?
Business owners who signed a personal guarantee for a SBA loan and are facing financial hardship, unable to repay their SBA debt in full, and willing to cooperate with the SBA may be eligible for an Offer in Compromise.
How can legal professionals assist with SBA Offers in Compromise?
Legal professionals provide expertise in navigating the complex SBA process, negotiating with the SBA on behalf of businesses, protecting clients' rights, and developing persuasive offer packages.
What are the key benefits of pursuing an SBA Offer in Compromise?
The benefits include debt reduction, avoiding legal action, and the opportunity for a fresh financial start.
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 personally guaranteed an SBA 504 loan balance of $337,000. The Third Party Lender had obtained a Judgment against the clients. We represented clients before the SBA and negotiated an SBA OIC that was accepted for $30,000.
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'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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