Debt Resolution: What Are SBA Offers in Compromise (OIC)?
It's been a tough year for many small business owners. Find helpful information in our guide to Offers In Compromise and how to find legal assistance.
Protect Law Group's comprehensive services are tailored to assist businesses in resolving SBA loan default issues. Learn more today.
Book a Consultation CallWhen it comes to small business administration loans, facing the possibility of default can be a daunting prospect for any business owner. Protect Law Group understands the complexities associated with defaulting on an SBA loan within an LLC and is dedicated to assisting clients in navigating this challenging situation. Let's delve into what happens if you default on a loan in an LLC and the solutions available to you.
When an LLC defaults on an SBA loan, several key consequences may unfold:
Impact on Personal and Business Assets
One of the primary concerns when defaulting on an SBA loan in an LLC is the potential impact on both personal and business assets. SBA loans are often guaranteed by personal assets, putting them at risk in the event of a default. Protect Law Group's expertise in risk management and asset exemption protection can help mitigate these risks and safeguard your assets.
Legal Ramifications and Debt Repayment
Defaulting on an SBA loan can lead to legal actions and debt repayment obligations. Our team of Federal Agency Practitioners and SBA Attorneys is well-versed in constitutional law, contract law, and federal administrative procedures, ensuring comprehensive representation in negotiations, settlements, or even in SBA Office of Hearings & Appeals proceedings.
Exploring Debt Relief Options
Defaulting on an SBA loan does not necessarily mean the end of the road. SBA debt relief options such as deferment, SBA Offer in Compromise (SBA OIC), and bankruptcy law can provide avenues for resolving the debt burden. Protect Law Group's specialized services encompass these debt relief strategies, working towards favorable resolutions for our clients.
Protect Law Group's team of experienced attorneys understands the complexities surrounding SBA loans and stands ready to guide clients through the process of exploring and leveraging these debt relief options. Our experts are dedicated to advocating for our clients' best interests and securing the most favorable outcomes possible.
Negotiating SBA Loan Forgiveness
Despite the complexities of defaulting on an SBA loan, pursuing SBA loan forgiveness remains a viable solution. Our team excels in negotiations with creditors and the SBA, striving to achieve settlements that alleviate the financial strain on your LLC. Our expertise in commercial and banking litigation further bolsters our ability to secure favorable terms for debt restructuring.
Defaulting on an SBA loan within an LLC can pose significant challenges, but with the right legal guidance and strategic approach, navigating through this turmoil is possible. Protect Law Group's comprehensive services, spanning from financial analysis to negotiations and asset protection, are tailored to assist businesses in resolving SBA loan default issues effectively. Don't let the fear of default paralyze your business - explore the avenues of debt relief and settlement to secure a brighter financial future for your LLC.
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' 7(a) loan was referred to Treasury's Bureau of Fiscal Service for enforced collection in 2015. They not only personally guaranteed the loan, but also pledged their primary residence as additional collateral. One of the clients filed for Chapter 7 bankruptcy thinking that it would discharge the SBA 7(a) lien encumbering their home. They later discovered that they were mistakenly advised. The Firm was subsequently hired to review their case and defend against a series of collection actions. Eventually, we were able to negotiate a structured workout for $180,000 directly with the SBA, saving them approximately $250,000 (by reducing the default interest rate and removing Treasury's substantial collection fees) and from possible foreclosure.
Client’s small business obtained an SBA 7(a) loan for $750,000. She and her husband signed personal guarantees exposing all of their non-exempt income and assets. With just 18 months left on the maturity date and payment on the remaining balance, the Great Recession of 2008 hit, which ultimately caused the business to fail and default on the loan terms. The 7(a) lender accelerated and sent a demand for full payment of the remaining loan balance. The SBA lender’s note allowed for a default interest rate of about 7% per year. In response to the lender's aggressive collection action, Client's husband filed for Chapter 7 bankruptcy in an attempt to protect against their personal assets. However, his bankruptcy discharge did not relieve the Client's personal guarantee liability for the SBA debt. The SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection against the Client to the SBA. The Client then received the SBA Official 60-Day Notice. After conducting a Case Evaluation with her, she then hired the Firm to respond and negotiate on her behalf with just 34 days left before the impending referral to Treasury. The Client wanted to dispute the SBA’s alleged debt balance as stated in the 60-Day Notice by claiming the 7(a) lender failed to liquidate business collateral in a commercially reasonable manner - which if done properly - proceeds would have paid back the entire debt balance. However, due to time constraints, waivers contained in the SBA loan instruments, including the fact the Client was not able to inspect the SBA's records for investigation purposes before the remaining deadline, Client agreed to submit a Structured Workout for the alleged balance in response to the Official 60-Day Notice as she was not eligible for an Offer in Compromise (OIC) because of equity in non-exempt income and assets. After back and forth negotiations, the SBA Loan Specialist approved the Workout proposal, reducing the Client's purported liability by nearly $142,142.27 in accrued interest, and statutory collection fees. Without the Firm's intervention and subsequent approval of the Workout proposal, the Client's debt amount (with accrued interest, Treasury's statutory collection fee and Treasury's interest based on the Current Value of Funds Rate (CVFR) would have been nearly $291,030.
Small business sole proprietor obtained an SBA COVID-EIDL loan for $500,000. Client defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for aggressive collection. Treasury added $180,000 in collection fees totaling $680,000+. Client tried to negotiate with Treasury but was only offered a 3-year or 10-year repayment plan. Client hired the Firm to represent before the SBA, Treasury and a Private Collection Agency. After securing government records through discovery and reviewing them, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury citing a host of purported violations. The Firm was able to negotiate a reinstatement and recall of the loan back to the SBA, participation in the Hardship Accommodation Plan, termination of Treasury's enforced collection and removal of the statutory collection fees.
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