What Is a Tax Refund Offset? How Does It Work?
Have you ever asked yourself the question: what is a tax refund offset? Do you want to know how it works? Read on to learn more.
You may have learned that your defaulted SBA loan was "charged off". You are still liable for the loan deficiency, however, and competent legal counsel is highly recommended.
The transcript of the video follows below for further review.
What is SBA's Policy Regarding Charge Off Accounts? Many times people think that because their defaulted SBA loan has been “charged off” they are not longer liable to the SBA. Unfortunately, this is not the case. “Charge off” is the process by which SBA recognizes a loss and removes the uncollectible loan account from its active receivable accounts. The SBA's policy is to be diligent and thorough in collection of debt and to promptly charge off all uncollectible accounts to more accurately reflect the status of the individual account and the Agency's entire portfolio. It should be noted that a charge off is merely an administrative determination that does NOT affect SBA's rights against any obligor nor reduce the SBA's (or a participant lender's) ability to proceed with any available remedy. A charge off is justified when the third party lender has complied with all requirements of collection and liquidation and further collection of any substantial portion of the debt is doubtful. The determination to justify a charge off may be based on one or more of the following:
a) The third party lender has exhausted all efforts in cost-effective recovery from:
Voluntary payments from the borrower;
Liquidation of collateral;
Compromise with obligor leaving only a deficiency balance; and
Consideration has been given to any legal remedies available so that no further reasonable expectation of recovery remains.
b) Estimated costs of future collection exceed any anticipated recovery;
c) Obligor cannot be located or is judgment proof;
d) The Lender/SBA's rights have expired (e.g., statute of limitations, restrictions of State law, Agency policy);
e) Debt is legally without merit;
f) Adjudication of a Chapter 7 Bankruptcy as a no asset case, or completion of Chap 11/13 case;
g) The inability of the Lender to effect further worthwhile recovery.
If your defaulted SBA loan has been charged off you will still need an experienced attorney to help negotiate a settlement. Contact Protect Law Group today at (888) 756-9969 or at www.sba-attorneys.com and schedule your consultation with an SBA workout attorney.
We analyze your SBA loan problems and advise you on potential solutions such as an SBA offer in compromise for your SBA loan default.
Helping provide real solutions to individuals who are facing SBA loan problems. Contact one of our experienced SBA Attorneys and Federal Agency Practitioners today for a Case Evaluation - (888) 756-9969.
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.
Clients personally guaranteed SBA 504 loan balance of $750,000. Clients also pledged the business’s equipment/inventory and their home as additional collateral. Clients had agreed to a voluntary sale of their home to pay down the balance. We intervened and rejected the proposed home sale. Instead, we negotiated an acceptable term repayment agreement and release of lien on the home.
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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