SBA Loan Default: Termination of Collection Action
Dealing with an SBA OIC case can be hard. You should allow one of our lawyers to settle SBA debt for you. Talk to us about your SBA loan default.
The federal government can garnish up to 15% of your paycheck without first obtaining a civil court judgment. This can strike at the heart of your finances.
Book a Consultation CallThe administrative wage garnishment process allows the government to take a portion of your paycheck without first obtaining a civil court judgment. As such, the SBA or other creditor agency must give your notice thirty days in advance and an opportunity to request a hearing or negotiate a payment plan. Courts have interpreted the six-year statute of limitations for actions for money damages as applicable only to lawsuits filed in court. It does not apply to non-judicial collection methods, such as administrative wage garnishment.
Administrative wage garnishment can hamper your finances.
Unless you agree in writing to a higher amount, the government can garnish your disposable pay up to 15%. Federal law also limits total garnishments to 25% of disposable pay. Therefore, if you have other garnishments, the total of all garnishments including the federal government, cannot exceed 25%.
"Disposable pay" means your pay after the deduction of health insurance premiums and any amount required by law to be withheld. Such amounts include Social Security taxes, withholding taxes, Medicare, etc.
Therefore, if you had a previous garnishment of 15% in place and then the government obtained an administrative wage garnishment order against you, the administrative wage garnishment would be limited to an additional 10% of your income.
Taking 15% of your pay check can really affect your ability to pay your bills, raise your kids and save for retirement.
As soon as you receive the notice of intended administrative wage garnishment you must request a hearing. Alternatively, you can contact the Treasury and arrange for a payment plan. If you request a hearing timely, an administrative wage garnishment cannot start until you've had a chance to present your case. If you fail to submit a hearing request in a timely matter, the administrative wage garnishment will start.
Going forward, you may present evidence that you don't owe the debt, the debt is not enforceable or the amount of the debt is incorrect. Also, you may present evidence that an administrative wage garnishment would be a financial hardship if implemented. Lastly, if you were involuntarily terminated from your previous job and have been currently employed for less than 12 months, a wage garnishment cannot proceed.
You will need to file a brief with facts, evidence and legal support for your position as well as financials if you claim financial hardship. To that end, our assertive attorneys have represented clients all over the country in administrative wage garnishment hearings. Protect Law Group has the experience obtaining the necessary evidence and presenting your defenses.
Contact our office today and one of our attorneys will discuss your matter with you at no cost.
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.
Client personally guaranteed SBA 7(a) loan for $350,000. The small business failed but because of the personal guarantee liability, the client continued to pay the monthly principal & interest out-of-pocket draining his savings. The client hired a local attorney but quickly realized that he was not familiar with SBA-backed loans or their standard operating procedures. Our firm was subsequently hired after the client received the SBA's official 60-day notice. After back-and-forth negotiations, we were able to convince the SBA to reinstate the loan, retract the acceleration of the outstanding balance, modify the original terms, and approve a structured workout reducing the interest rate from 7.75% to 0% and extending the maturity date for a longer period to make the monthly payments affordable. In conclusion, not only we were able to help the client avoid litigation and bankruptcy, but our SBA lawyers also saved him approximately $227,945 over the term of the workout.
The client was personally guaranteed an SBA 7(a) loan to help with a relative’s new business venture. After the business failed, Treasury was able to secure a recurring Treasury Offset Program (TOP) levy against our client’s monthly Social Security Benefits based on the claim that he owed over $1.2 million dollars. We initially submitted a Cross-Servicing Dispute, but then, prepared and filed an Appeals Petition with the SBA Office of Hearings and Appeals (SBA OHA). As a result of our efforts, we were able to convince the SBA to not only terminate the claimed debt of $1.2 million dollars against our client (without him having to file bankruptcy) but also refund the past recurring amounts that were offset from his Social Security Benefits in connection with the TOP levy.
Small business sole proprietor obtained an SBA COVID-EIDL loan for $500,000. Client defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for aggressive collection. Treasury added $180,000 in collection fees totaling $680,000+. Client tried to negotiate with Treasury but was only offered a 3-year or 10-year repayment plan. Client hired the Firm to represent before the SBA, Treasury and a Private Collection Agency. After securing government records through discovery and reviewing them, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury citing a host of purported violations. The Firm was able to negotiate a reinstatement and recall of the loan back to the SBA, participation in the Hardship Accommodation Plan, termination of Treasury's enforced collection and removal of the statutory collection fees.
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