Facing a business failure is most definitely not a fun experience. However, the sooner you act and get your affairs and accounts settled, the sooner you'll be able to move on with your life. Protect Law Group is a California-based SBA attorney who helps business owners whose SBA loans are in default. Below, learn what not to do if you are facing an SBA loan default. Call for a free consultation today!
Avoiding your lender sends the signal that you have no intention of paying one single dime. This will either result in you being sued by your lender or having the SBA come after you, which could result in severe consequences for the rest of your life, including having your wages garnished, as well as your federal tax refund taken.
If your business is losing money every month and you are beginning to use credit cards to pay the bills and you are looking into taking out a home equity loan, then it's time to call it quits. Taking on more debt will only put you further into a hole.
If your SBA loan and other business loans are in default, do not sell your business assets. If you hope to settle with the SBA and your other lenders, you have to have something to offer, and if you sell your business assets to pay the bills, you have nothing at the end of the day.
Trying to get around the federal government is just not a good idea. They have seen every trick in the book, and, odds are, you will get caught. When that happens, you can expect the book to be thrown at you with a closed door to negotiations. Don't try to sell your business or otherwise mislead your lender in any way.
Protect Law Group is a group of SBA lawyers who help you when your business is in default on an SBA loan. It's always best to follow the laws, and with the help of a top-rated SBA debt resolution attorney, you can settle your loan and not walk away broke. Call for a free consultation 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' 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.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
Our firm successfully resolved an SBA 7(a) loan default in the amount of $140,000 on behalf of a husband-and-wife guarantor pair. The business had closed following a prolonged decline in revenue, leaving the borrowers personally liable for the remaining balance.
After conducting a comprehensive financial analysis and preparing a detailed SBA Offer in Compromise (SBA OIC) package, we negotiated directly with the SBA and the lender to achieve a settlement for $70,000 — just 50% of the outstanding balance. This settlement released the borrowers from further personal liability and allowed them to move forward without the threat of enforced collection.
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