Navigating SBA Offer in Compromise: A Step-by-Step Guide
Dealing with SBA Bankruptcy? A SBA offer in compromise may help get you out of this difficult situation. Protect Law Group is here to help. Find out more today!
Landing on CAIVRS means no government backed loans
CAIVRS refers to the Credit Alert Verification Reporting System. Only the government could add an extra "I" to the acronym. CAIVRS was developed by the Department of Housing and Urban Development (HUD) in June 1987 as a shared database of defaulted Federal debtors, and enables processors of applications for Federal credit benefit to identify individuals who are in default or have had claims paid on direct or guaranteed Federal loans, or are delinquent or other debts owed to Federal agencies. This means, for instance, that if you apply for an FHA loan, a loan guaranteed by the government, you will be denied when you turn up on CAIVRS.
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Pursuant to federal law, a person may not obtain any Federal financial assistance in the form of a loan or loan insurance or guarantee administered by the agency if the person has an outstanding debt (other than a debt under the Internal Revenue Code of 1986) with any Federal agency which is in a delinquent status, as determined under standards prescribed by the Secretary of the Treasury. Such a person may obtain additional loans or loan guarantees only after such delinquency is resolved in accordance with those standards.
A person owing an outstanding non-tax debt that is in delinquent status shall not be eligible for Federal financial assistance. This eligibility requirement applies to all persons seeking Federal financial assistance and owing an outstanding non-tax debt in delinquent status, including, but not limited to, guarantors. If you have defaulted on an SBA loan, you probably signed a personal guarantee. This eligibility requirement applies to all Federal financial assistance even if creditworthiness or credit history is not otherwise a factor for eligibility purposes, e.g., student loans. A person may be eligible for Federal financial assistance only after the delinquency is resolved. An agency may waive this eligibility requirement.
If you find that you are on CAIVRS you may have some options to be released. The first option, of course, is to pay the debt. Once the debt is paid, it is no longer delinquent.
Obtain a waiver from the originating agency. Thus, if you have a defaulted SBA loan in your past, you can apply to the agency you are seeking assistance from to waive the problem.
Lastly, you can show that the debt is not delinquent as a matter of law. A debt is in "delinquent status" if the debt has not been paid within 90 days of the payment due date. The payment due date is the date specified in the creditor agency's initial written demand for payment or applicable agreement or instrument (including a post-delinquency repayment agreement). Certain exceptions legal exceptions apply to the definition of "delinquent status" which may enable you to be removed from CAIVRS.
If you have been placed on CAIVRS and are preventing for obtaining government backed loans or assistance, you may be released.
Schedule a case evaluation today to determine your eligibility.
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.
Clients executed several trust deeds pledging seven (7) real estate properties and unconditional personal guarantees for an SBA 7(a) loan from the participating lender. The clients' small business failed and eventually defaulted on repayment of the loan exposing all collateral pledged by the clients. The SBA subsequently acquired the loan balance from the lender, including the right to liquidate and collect all pledged collateral pursuant to the trust deed instruments.
The Firm was hired to negotiate separate release of lien proposals for all 7 real estate properties. In preparation for the work assignment, the Firm Attorneys initiated discovery to secure records from the SBA and Treasury's Bureau of Fiscal Service. After reviewing the records and understanding the interplay between the lender and the SBA, the attorneys then prepared, submitted and negotiated the release of lien (ROL) for each of the 7 real estate properties for consideration.
After submitting the proposals, the assigned SBA Loan Specialists approved each ROL package - significantly reducing the total SBA debt claimed.
Our firm successfully resolved an SBA COVID-19 Economic Injury Disaster Loan (EIDL) default in the amount of $150,000 on behalf of Illinois-based client. After the business permanently closed due to the economic impacts of the pandemic, the owners faced potential personal liability if the business collateral was not liquidated properly under the SBA Security Agreement.
We guided the client through the SBA’s Business Closure Review process, prepared a comprehensive financial submission, and negotiated directly with the SBA to release the collateral securing the loan. The borrower satisfied their collateral obligations with a payment of $2,075, resolving the SBA’s security interest.
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