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The SBA Offer in Compromise: Avoiding Property Loss and Additional Legal Issues After a Loan Default

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The SBA Offer in Compromise: Avoiding Property Loss and Additional Legal Issues After a Loan Default

When a business venture begins to stumble it becomes very easy to fall behind with the bills. When one of those debts is for an SBA loan the person who signed for the loan must handle the situation correctly to protect their credit and their property. An SBA loan foreclosure is a terrifying prospect for anyone who is facing the loss of their income and personal property used as collateral for the loan. It is important to get assistance from an expert prior to reaching this point.

The first contact business owners will have regarding their late payments is usually an SBA demand letter requesting the amount that is late. Of course, people receiving these notices often do not have the income necessary to make the payments or they would have already done so. It may be possible at this point to get a loan deferment if the income shortage is a provable short term issue. This is not always possible to prove and not always the reason for the late payments. A deferment will not help a business that is failing and has no clear plan for recovery.

Instead, an SBA Offer in Compromise is the best solution. This is done when the business has no ability to continue operating or a plan to restructure successfully. It is often beneficial to the borrower and lender both because it avoids additional legal expenses. This process is basically a debt forgiveness plan where the borrower pays a lump sum to the lender and the remainder of the loan is forgiven.

Many people who have reached the point of needing an SBA Offer in Compromise will also require legal assistance through a Tax Offset Program too. This may be due to overdue tax payments because of a lack of income or it could be the tax bill they received after their compromise deal. Any amount that is forgiven on a debt is considered income and taxes are owed for that income.

An SBA loan default is a serious legal issue that no one should attempt to handle on their own. Legal advice and assistance is necessary to prevent any loss of property. Seeking advice as soon as financial problems begin will make it possible for the business owner to have more options in how they proceed.

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.

$220,000 SBA 7A LOAN -DOT WAIVER OF ADMINISTRATIVE FEES & COSTS

$220,000 SBA 7A LOAN -DOT WAIVER OF ADMINISTRATIVE FEES & COSTS

Clients personally guaranteed an SBA 7(a) loan that was referred to the Department of Treasury for collection.  Treasury claimed our clients owed over $220,000 once it added its statutory collection fees and interest.  We were able to negotiate a significant reduction of the total claimed amount from $220,000 to $119,000, saving the clients over $100,000 by arguing for a waiver of the statutory 28%-30% administrative fees and costs.

$750,000 SBA 504 LOAN - NEGOTIATED TERM REPAYMENT AGREEMENT

$750,000 SBA 504 LOAN - NEGOTIATED TERM REPAYMENT AGREEMENT

Clients personally guaranteed SBA 504 loan balance of $750,000.  Clients also pledged the business’s equipment/inventory and their home as additional collateral.  Clients had agreed to a voluntary sale of their home to pay down the balance.  We intervened and rejected the proposed home sale.  Instead, we negotiated an acceptable term repayment agreement and release of lien on the home.

$150,000 SBA 7A LOAN - SBA OIC CASH SETTLEMENT

$150,000 SBA 7A LOAN - SBA OIC CASH SETTLEMENT

Client personally guaranteed SBA 7(a) loan balance of over $150,000.  Business failed and eventually shut down.  SBA then pursued client for the balance.  We intervened and was able to present an SBA OIC that was accepted for $30,000.

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