Factors That Can Affect the Success of an SBA Offer in Compromise Application
Factors That Can Affect the Success of an SBA Offer in Compromise Application
The transcript of the video follows below for further review.
Is your business loan secured by the Small Business Administration (SBA)? Are you having trouble repaying it? You might think that you don't have any other option but trying to survive.
Yet, that isn't true. You might be eligible for other options without falling into default. An SBA attorney can help you navigate this process and tell you more about your options.
Have you consulted an attorney? Not sure what they can do for you? We'll tell you all about what an SBA lawyer can do for you.
Keep reading to learn more!
So you decided to pursue your dream and open your business. To make it happen or grow, you took a business loan. An SBA secured loan provided you the funding you needed to make it happen.
Your business kept growing but your clients' payment terms are putting you in a tight spot. Your business' monthly income might not be the amount you need to stay current. Don't know how you can make payroll and pay your SBA loan?
You aren't alone in this. Many business owners arrive at this crossroads every day. You might be thinking there isn't a way you can prevent defaulting on your SBA loan
But an SBA lawyer can help you get out of this rabbit hole. They can go over your case and options. Your options will vary on a case by case basis.
You might be considering defaulting on your loan. But, you should keep in mind that the SBA default statute of limitations won't let you off the hook that easily. These loans are allowed to collect 6 years after your last payment.
It doesn't matter in what state you live because the state's statute of limitations doesn't apply to these loans. When you default, SBA has the option to send it to the Department of Treasury. They can collect beyond the established 6 years statute of limitations.
This may vary depending on your loan and collateral. An SBA lawyer can help you find the right option for your case. Here are some ways the right attorney can help you with your SBA loan.
Now you know that if you default on an SBA loan, you won't be able to get rid of it as soon as you expected. You might've received a letter from SBA offering to review your debt on an administrative hearing. You may think it's a simple thing.
But, if you don't handle the situation right it can turn into a nightmare. An SBA lawyer can investigate your case and discover evidence that can help you. If you attend the hearing without the right evidence, you'll be losing the case from the get-go.
You shouldn't underestimate an SBA hearing because it's an administrative process. Your hearing is as valid and important as any day in court. That's why you need to be as ready as you can be.
An SBA lawyer can represent you in the hearings and appeals. This will give you the biggest chance of getting the best outcome.
If you're considering appealing your SBA decision, you should consider using a specialized SBA OHA Appeal attorney. Their experience will give you the upper hand in your appeal. Because they know what's the best approach for SBA to accept your appeal.
Sometimes debtors may not be considered for an offer in compromise because their monthly income or liquid assets value is too high. Here your best option would be negotiating an SBA repayment plan. An SBA lawyer can negotiate your plan if SBA refers your case to the Department of Treasury.
The length for your repayment plan can't be more than 3 years. SBA deems this term reasonable time to pay the claimed debt.
These negotiations aren't easy. Don't fall into trying to negotiate the plan yourself. That's why it's recommended you hire a lawyer to represent you during the process.
When you receive an SBA Offer in Compromise, they're offering you an off-court settlement. To arrive at this agreement, the borrowers and guarantors need to agree.
An SBA lawyer may help you negotiate this settlement and obtain the best outcome. Also, they can tell you if this is your best option.
If your business is suffering a momentary slump, a loan deferment or modification might be your best option. If you obtain the first, you'll stop making payments during 3, 6, 9 or 12 months. SBA approves this option to businesses that prove a short-term financial difficulty.
You may be eligible for a loan modification if your business is generating revenue but falling short in their payments due to the loan terms. Most of the time, they offer this option for SBA 504 loans. An SBA lawyer can help you obtain these short and long-term solutions.
When you default on a secured SBA loan, the property you pledge will have an SBA lien. Many debtors believe that filing bankruptcy will eliminate it. Yet, this process may only discharge your debt.
There are certain situations when SBA may discharge the lien on your property. Here's where your SBA lawyer may negotiate an SBA Lien Release. An example is when a deceased spouse was the sole guarantor of the loan.
In this process, you could offer to buy back your property from SBA. They'll take several factors into consideration. An SBA lawyer can give you a better idea of the possibility of recovering your property.
Yes, an SBA attorney can help you with your SBA secured loan. Your options will depend on the type of loan you have. But, an SBA lawyer can go over your loan paperwork and discuss your options.
Also, they can negotiate to come to an agreement with your lender. SBA loans don't work the same as other loans. That's why you should hire an expert to help you navigate the process.
If you hire an SBA lawyer, you'll be able to obtain the best outcome. Remember that the right attorney will take their time to analyze your case. They should go over your options and recommend the best approach.
Are you having problems making payments on your SBA loan? Want to learn more about your options? We can help!
Contact us to schedule your case evaluation today.
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 borrowed and personally guaranteed an SBA 7(a) loan. Clients defaulted on the SBA loan and were sued in federal district court for breach of contract. The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan. We were subsequently hired to intervene and aggressively defend the lawsuit. After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.
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.
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.
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