Contact Our SBA Attorneys for Nationwide Representation of SBA and Treasury Debt Problems
Book a Consultation CallWe provide individuals with solutions whose SBA loan problems & other federal non-tax debts are referred to Treasury for aggressive collection. We employ practical strategies to resolve your Treasury collection problems and teach you about submitting a Compromise Offer.
On October 7, 2012, the Secretary of the Treasury, Timothy Geithner, issued Treasury Order 136-01 which consolidated and re-designated the bureaus formerly known as the Bureau of the Public Debt and the Financial Management Service as the Bureau of the Fiscal Service.
This Order delegated to the Commissioner, Bureau of the Fiscal Service, the authority that was previously delegated to the Commissioner of the Public Debt and the Commissioner, Financial Management Service.
As a result of this Treasury Order, all federal non-tax delinquent debts are now serviced and collected by this special Bureau of the Treasury Department.
If your federal non-tax delinquent debt (e.g. SBA loan, SEC debt, FCC debt, USDA loan etc.) has been transferred to the Department of the Treasury (DoT) from an existing federal creditor agency, it will be aggressively serviced and collected by the Bureau of the Fiscal Service (BFS).
BFS can use those aggressive collection tools available to all federal agencies pursuant to the Debt Collection Improvement Act of 1996.
Some of the aggressive collection tools available for Treasury debt defense are:
If your federal non-tax debt has been referred to the BFS for cross-servicing, is is critically important for you as a borrower, obligor or guarantor to hire qualified Federal Agency Practitioners who can help defend you against some of the Bureau’s most aggressive collection actions as noted above.
Because practice before the Department of the Treasury and the Bureau of Fiscal Service requires specific knowledge and understanding of several core areas of law and process, most notably (1) the federal agency maze, (2) federal administrative law and procedure, (3) constitutional law requirements, (4) federal administrative litigation, (5) federal administrative hearing representation and appeals, (6) federal agency rules and internal procedures of the referring federal creditor agency which originated the federal non-tax debt, (7) federal collection defense representation, (8) Department of Justice collateral liquidation and collection litigation defense, (9) bankruptcy law and asset exemptions and (10) DoT compromise and negotiation tactics, it is very important that you conduct your due diligence and choose your professional representatives wisely.
If your federal agency practitioners are not authorized to practice before the federal agencies pursuant to the Agency Practice Act and do not have experience with the core areas as identified above (and all non-attorney federal agency representatives do not have the necessary qualification as they neither have the education, training or, most importantly, the actual license to legally practice within the scope of these parameters), then “caveat emptor” or “buyer beware.”
As a result of this Treasury Order, all federal non-tax delinquent debts are now serviced and collected by this special Bureau of the Treasury Department.
If your federal non-tax delinquent debt (e.g. SBA loan, SEC debt, FCC debt, USDA loan etc.) has been transferred to the Department of the Treasury (DoT) from an existing federal creditor agency, it will be aggressively serviced and collected by the Bureau of the Fiscal Service (BFS).
BFS can use those aggressive collection tools available to all federal agencies pursuant to the Debt Collection Improvement Act of 1996.
Some of the aggressive collection tools available for Treasury debt defense are:
If your federal non-tax debt has been referred to the BFS for cross-servicing, is is critically important for you as a borrower, obligor or guarantor to hire qualified Federal Agency Practitioners who can help defend you against some of the Bureau’s most aggressive collection actions as noted above.
Because practice before the Department of the Treasury and the Bureau of Fiscal Service requires specific knowledge and understanding of several core areas of law and process, most notably (1) the federal agency maze, (2) federal administrative law and procedure, (3) constitutional law requirements, (4) federal administrative litigation, (5) federal administrative hearing representation and appeals, (6) federal agency rules and internal procedures of the referring federal creditor agency which originated the federal non-tax debt, (7) federal collection defense representation, (8) Department of Justice collateral liquidation and collection litigation defense, (9) bankruptcy law and asset exemptions and (10) DoT compromise and negotiation tactics, it is very important that you conduct your due diligence and choose your professional representatives wisely.
If your federal agency practitioners are not authorized to practice before the federal agencies pursuant to the Agency Practice Act and do not have experience with the core areas as identified above (and all non-attorney federal agency representatives do not have the necessary qualification as they neither have the education, training or, most importantly, the actual license to legally practice within the scope of these parameters), then “caveat emptor” or “buyer beware.”
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 personally guaranteed SBA 7(a) loan balance of over $150,000. Business failed and eventually shut down. SBA then pursued client for the balance. We intervened and was able to present an SBA OIC that was accepted for $30,000.
Client personally guaranteed an SBA 7(a) loan for $100,000 from the lender. The SBA loan went into early default in 2006 less than 12 months from disbursement. The SBA paid the 7(a) guaranty monies to the lender and subsequently acquired the deficiency balance of about $96,000, including the right to collect against the guarantor. However, the SBA sent the Official 60-Day Due Process Notice to the Client's defunct business address instead of his personal residence, which he never received. As a result, the debt was transferred to Treasury's Bureau of Fiscal Service where substantial collection fees were assessed, including accrued interest per the promissory note. Treasury eventually referred the debt to a Private Collection Agency (PCA) - Pioneer Credit Recovery, Inc. Pioneer sent a demand letter claiming a debt balance of almost $310,000 - a shocking 223% increase from the original loan amount assigned to the SBA. Client's social security disability benefits were seized through the Treasury Offset Program (TOP). Client hired the Firm to represent him as the debt continued to snowball despite seizure of his social security benefits and federal tax refunds as the involuntary payments were first applied to Treasury's collection fees, then to accrued interest with minimal allocation to the SBA principal balance.
We initially submitted a Cross-Servicing Dispute (CSD) challenging the referral of the debt to Treasury based on the defective notice sent to the defunct business address. Despite overwhelming evidence proving a violation of the Client's Due Process rights, the SBA still rejected the CSD. As a result, an Appeals Petition was filed with the SBA Office of Hearings & Appeals (OHA) Court challenging the SBA decision and its certification the debt was legally enforceable in the amount claimed. After several months of litigation before the SBA OHA Court, our Firm Attorney successfully negotiated an Offer in Compromise (OIC) Term Workout with the SBA Supervising Trial Attorney for $82,000 spread over a term of 74 months at a significantly reduced interest rate saving the Client an estimated $241,000 in Treasury collection fees, accrued interest (contract interest rate and Current Value of Funds Rate (CVFR)), and the PCA contingency fee.
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