Common Mistakes to Avoid When Applying for an SBA Offer in Compromise
Common Mistakes to Avoid When Applying for an SBA Offer in Compromise
Understand Subchapter V and how it can provide effective debt management programs and business debt relief. Contact Protect Law Group today!
Book a Consultation CallIf your business is struggling with overwhelming debt, it's crucial to explore all available options for relief. One such option is Subchapter V. At Protect Law Group, our team of SBA loan attorneys specializes in helping businesses navigate the complexities of Subchapter V and find concrete solutions for their financial challenges. Contact us to learn more!
Subchapter V is a bankruptcy provision specifically designed for small businesses with debt under $7.5 million. It offers an expedited and streamlined process for debt adjustment and provides business owners with a more manageable path to financial recovery.
One significant advantage of Subchapter V is its focus on debt management programs. Under Subchapter V, businesses can propose a debt repayment plan based on their current income and projected future earnings.
Subchapter V benefits for small businesses include easier plan confirmation, debtor-only plan filing, no disclosure statement requirement, contested plan confirmation, relaxed absolute priority rule, no creditors committee, and no quarterly U.S. Trustee payments. These changes result in faster, less expensive reorganizations.
Navigating Subchapter V requires the expertise of SBA loan attorneys. From strategizing debt management programs to guiding negotiations, SBA loan attorneys play a crucial role in ensuring a favorable outcome for businesses seeking business debt relief.
Subchapter V provides small businesses with an opportunity to regain control of their financial situation through efficient debt management programs and business debt relief. By understanding the provisions and benefits of Subchapter V and partnering with experienced SBA loan attorneys like those at Protect Law Group, businesses can navigate this process with confidence and pave the way for a brighter financial future. Contact our team today to discuss how Subchapter V can work for your business!
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 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.
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.
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.
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