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U.S. won't be able to pay bills without stepping up Treasury Department collection actions against federal debtors

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U.S. won't be able to pay bills without stepping up Treasury Department collection actions against federal debtors

Members of Congress are sharply divided over what to include in measures financing the government and raising the debt ceiling.

Some Republican lawmakers have said they want to see an increase in the debt limit paired with other measures to decrease the deficit. “We’re not going to raise the debt ceiling without real cuts in spending,” Speaker John A. Boehner of Ohio told reporters last month.

Republicans have also floated the idea of insisting on delaying parts of the Affordable Care Act as part of any deal.

But on Monday, the White House again said it would not allow Republicans to use the debt ceiling as political leverage in negotiations this fall. “Let me reiterate what our position is, and it is unequivocal,” said Jay Carney, the White House press secretary. “We will not negotiate with Republicans in Congress over Congress’ responsibility to pay the bills that Congress has racked up, period.”

The debt ceiling stands at about $16.7 trillion. Congress passed a measure increasing it by about $300 billion in January.

Congress will also wrangle over how to keep the federal government’s lights on. The White House and many members of Congress want to try again for a broader deficit-reduction deal, which might replace the $85 billion in mandatory cuts known as the sequester with a different package of cuts, including changes to social programs and perhaps tax increases.

“The president has put forward a clear compromise proposal, a broad compromise proposal that would reduce the deficit significantly, including through savings in our entitlement programs, in a balanced way,” Mr. Carney said on Monday. “We continue to await a response.”

Administration officials are again warning about the havoc Congress might unleash by failing to raise the debt ceiling.

The Treasury would be able to spend money only as it came in. It might be forced to choose certain payments over others — paying bondholders but not Social Security recipients, for instance. Some analysts question whether the government’s payment systems could even handle such prioritization.

“The rate at which cash will be drawn down depends on factors that are inherently variable and irregular,” Treasury Secretary Jacob J. Lew said in a letter Monday to Mr. Boehner imploring the House to act on the debt ceiling before mid-October. “If investors should become unwilling to loan the United States money, the United States could face an immediate cash shortfall. Indeed, such a scenario could undermine financial markets and result in significant disruptions to our economy.”

The government officially bumped up against its borrowing limit in May. At that point, the Treasury stopped issuing new debt and started employing “extraordinary measures” to ensure that the government had enough cash to make its required payments. But those measures bought only so much time.

If the continuing resolution were to expire without a new patch or appropriations bill, the federal government would shut down, with thousands of employees put on furlough and only essential services, like air traffic control, continuing."

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.

$1,200,000 SBA 7A LOAN - SBA OHA LITIGATION

$1,200,000 SBA 7A LOAN - SBA OHA LITIGATION

Client personally guaranteed an SBA 7(a) loan to help with a relative’s new business venture.  After the business failed, Treasury was able to secure a recurring Treasury Offset Program (TOP) levy against our client’s monthly Social Security Benefits based on the claim that he owed over $1.2 million dollars.  We initially submitted a Cross-Servicing Dispute, but then, prepared and filed an Appeals Petition with the SBA Office of Hearings and Appeals (SBA OHA).  As a result of our efforts, we were able to convince the SBA to not only terminate the claimed debt of $1.2 million dollars against our client (without him having to file bankruptcy), but also refund the past recurring amounts that were offset from his Social Security Benefits in connection with the TOP levy.

$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.

$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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