Question. Can I Discharge my Defaulted SBA Loan in Bankruptcy? Answer: With the exception of student loans, most government loans including SBA loans are routinely discharged in bankruptcy. Surprisingly, many debtors still believe that government loans cannot be...
If you are an investor in a company funded by a Small Business Administration ("SBA") loan, then you may wondering whether you are liable for the company debt should the business fail. The Borrower is principally responsible for repayment of the underlying promissory...
Yes, its is very likely, but not certain. If this is a concern, you should discuss with your attorney. Under the current law, an agency must deny credit to a delinquent, debtor unless this requirement is waived by the head of the agency or the Chief Financial Officer....
Owners with at least least a 20% stake in an SBA loan financed business will be required to execute a personal guarantee. This means that, as an owner, you are promising to pay the SBA lender and/or the government in the event the Borrower (your business) defaults and...
If you currently have an SBA Loan and you live in an area affected by a natural disaster, you may be entitled to relief. Hurricane, flood, wildfires, droughts, avalanches, landslides and earthquakes are just a few examples of the natural disasters that can cause the...
Question. A collection agency is contacting me about my SBA loan; is this legitimate? Answer. Once a loan has been referred to the U.S. Treasury due to non-payment or default of the loan, the Treasury utilizes several Private Collection Agencies to assist with debt...
There is really no way to know. Period. There are so many variables: 1. Who handles your file; 2. What SBA office is handling your file; 3. Your level of cooperation with the lender, both real and perceived; 4. Whether you have liquid assets vulnerable to traditional...
Question. I have an SBA loan. Won't the Government Guarantee Pay Off the Loan? Answer.The Small Business Administration (SBA) helps small businesses and entrepreneurs obtain loans. One of the ways it does so is by guaranteeing the loan so that the lender is insulated...
In many states, it is standard practice for an SBA lender to ask a loan guarantor to pledge their home as collateral in connection with their unconditional guaranty. If the business loan you guarantee goes into default, your homestead could be at risk of foreclosure....
In most cases people have invested a good portion of their life savings into the business now going under. Losing your business is a terrible thing. And, being faced with the prospect of repaying your SBA Business Loan with little or no savings and the loss of your...
Many people contact our law firm after receiving an SBA 60-day letter demanding that they pay the entire amount due under their company's defaulted SBA loan. And, time and time again, we hear, they protest claiming they only own 25% percent of the company and so...
Owing the federal government a debt can be a frightening experience. Once your defaulted SBA loan makes it was to the Treasury, it is likely that you will soon be contacted by one of the collection agencies that handles the collection of government debts. The calls...
Scenario 1. My business may close because I don't have enough working capital. If you are facing an SBA loan default, then you may want to consider selling your business. If your business has a good track record, but your business is starved for working capital, a...
If the Small Business Administration (SBA) has accepted your offer in compromise, then congratulations are in order. But, be warned, you must follow the terms of your offer precisely and make all payments on time or risk default. In many cases we are approached by...
General notification Before referring a debt for collection by administrative offset, a creditor agency must provide each debtor with: (a) a written notification of the nature and the amount of the debt, the intention of the agency to collect the debt through...
As a general rule, more so now than in the past, the Small Business Administration (SBA) will direct a Guarantor to submit their SBA offer-in-compromise package to the lender for preliminary review and approval. In fact, not in every office, but in some, lenders will...
Our attorneys routinely work with SBA loan defaults, so we all hear a lot of stories. But, not a week goes by where we don't get at least one caller who is absolutely shocked they received a 60-day demand letter from the SBA. You might wonder at their surprise...
The SBA Offer-in-Compromise process requires a guarantor to prepare a detailed financial statement and provide very detailed supporting documentation. In fact, the whole process feels a lot like applying for your loan all over again, but is quite the opposite....
The Treasury Offset Program is not subject to a statute of limitations and can collect on the defaulted SBA loan indefinitely. The Treasury can, among other things, garnish wages, even in states where wage garnishment by creditors is generally prohibited. The Treasury...
Question. I defaulted on an SBA loan. What happens next? Answer: The SBA Collection process follows a more or less standard path as set forth in the SBA Standard Operating Procedures (SOPS). But, to think the SOP's describe the reality of the SBA collection process...
Question. Will the SBA Accept My Offer in Compromise? Answer. There is no way to know. Period. There are so many variables: 1. Who handles your file; 2. What SBA office is handling your file; 3. Your level of cooperation with the lender, both real and perceived; 4....
Question. If I want to make offer to settle, do I contact the lender or the SBA? Answer. In general, you will reach out to the lender first. Even in the event of an SBA loan default, your lender will generally continue to service the loan. If there is some...
Question. Can the SBA Bring a Contract Action More than 6 Years After the Default? Answer. 28 U.S.C.§ 2415(a) establishes the federal statute of limitations applicable to SBA actions to recover under contract. Under this statue the SBA has 6-years to file suit to...
Question.What if my Note is purchased by a third-party. How long do they have to sue me? Answer: In Texas, the answer is settled, but in other states this answer may vary. In FDIC v. Bledsoe, 989 F.2d 805 (5th Cir.1993),the Fifth Circuit held that assignees of the...
Question.My state has a four-years statue of limitations on contract actions. How can the SBA sue after it has expired? Answer. It is settled law that state limitations statutes are relevant in determining a claim's viability at the time the federal agency acquires...
Question. What is the Treasury Offset Program Answer.The Treasury Offset Program (TOP) is a centralized offset program, administered by the Bureau of the Fiscal Service's Debt Management Services (DMS), to collect delinquent debts owed to federal agencies and states,...
Question.What can the Treasury take to satisfy a defaulted SBA loan balance? Answer. The Treasury Offset Program is not subject to a statute of limitations and can collect on the defaulted SBA loan indefinitely. The Treasury can, among other things, garnish wages,...
Question.How can I avoid my delinquent disaster loan being referred to the U.S. Treasury for enforced collection? Answer. You must contact an SBA Treasury Offset Representative prior to your loan being referred to the Department of the Treasury to set up acceptable...
Question.Why is the amount Treasury is collecting more than my SBA balance? Answer. Once an SBA loan is referred to the U.S. Treasury for collection under the U.S. Treasury Offset Program, collection fees may add up to 30% more to your SBA deficiency balance. It is...
