SBA OIC: Deferment v. Liquidation
Dealing with an SBA OIC case can be hard, this is why you should allow one of our lawyers to settle your SBA debt. Talk to us about your SBA loan default.
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 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.
Small business and guarantors obtained an SBA COVID-EIDL loan for $1,000,000. Clients defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for collection. Treasury added nearly $500,000 in collection fees totaling $1,500,000. Clients were served with the SBA's Official 60-Day Notice and exercised the Repayment option by applying for the SBA’s Hardship Accommodation Plan. However, their application was summarily rejected by the SBA without providing any meaningful reasons. Clients hired the Firm to represent them against the SBA, Treasury and a Private Collection Agency. After securing government records through discovery, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury. During litigation and before the OHA court issued a final Decision and Order, the Firm successfully negotiated a reinstatement and recall of the loan back to the SBA, a modification of the original repayment terms, termination of Treasury's enforced collection and removal of the statutory collection fees.
Client’s small business obtained an SBA 7(a) loan for $150,000. He and his wife signed personal guarantees and pledged their home as collateral. The SBA loan went into default, the term or maturity date was accelerated and demand for payment of the entire amount claimed was made. The SBA lender’s note gave it the right to adjust the default interest rate from 7.25% to 18% per annum. The business filed for Chapter 11 bankruptcy but was dismissed after 3 years due to its inability to continue with payments under the plan. Clients wanted to file for Chapter 7 bankruptcy, which would have been a mistake as their home had significant equity to repay the SBA loan balance in full as the Trustee would likely seize and sell the home to repay the secured and unsecured creditors. However, the SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection to the SBA. Clients then received the SBA Official 60-Day Notice and hired the Firm to respond to it and negotiate on their behalf. Clients disputed the SBA’s alleged balance of $148,000, as several payments made to the SBA lender during the Chapter 11 reorganization were not accounted for. To challenge the SBA’s claimed debt balance, the Firm Attorneys initiated expedited discovery to obtain government records. SBA records disclosed the true amount owed was about $97,000. Moreover, because the Clients’ home had significant equity, they were not eligible for an Offer in Compromise or an immediate Release of Lien for Consideration, despite being incorrectly advised by non-attorney consulting companies that they were. Instead, our Firm Attorneys recommended a Workout of $97,000 spread over a lengthy term and a waiver of the applicable interest rate making the monthly payment affordable. After back and forth negotiations, SBA approved the Workout proposal, thereby saving the home from imminent foreclosure and reducing the Clients' liability by nearly $81,000 in incorrect principal balance, accrued interest, and statutory collection fees.
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