When to Seek Out an SBA Offer in Compromise
Are you unsure of whether or not you need an SBA offer in compromise? Our team is here to help advise you as to when to seek out an offer in compromise.
Struggling small business or personal guarantors of an SBA loan can take advantage of the new Chapter 11 Subchapter V bankruptcy procedures.
Book a Consultation CallThe new option for troubled SBA loans
The new Chapter 11 Subchapter V bankruptcy has many differences from a regular Chapter 11. For instance, some of the changes are as follows:
These changes will result in faster and thus less expensive reorganizations for small business.
As such, your small business may use the new Chapter 11 Subchapter V to reorganize in this current economic climate. The use of Subchapter V may be one route to keeping your business going.
Traditionally, regular Chapter 11 bankruptcies have been expensive and the success rate of a company or individual making it through the life of the bankruptcy plan was much less than 50%.
Therefore, struggling businesses whose main debt consists of an SBA loan may find the new Chapter 11 Subchapter V bankruptcy a potential option to rescue the business.
Individuals may avail themselves of new bankruptcy procedures as well as small businesses. Most importantly, it may provide you with the opportunity to modify your SBA related loan.
If as part of your SBA loan, you pledged your primary residence as collateral, neither Chapter 7 or Chapter 13 bankruptcy will likely help in the event of default. However, Chapter 11 Subchapter V may help.
For instance, a small business debtor's plan may modify the rights of a holder of a claim secured by the principal residence of the debtor if the new value received in connection with the granting of the security interest was:
Therefore, you could possibly use the Chapter 11 Subchapter V to save your house and modify the terms of repaying the loan if you pledged your house as collateral as part of your personal guarantee. You will, more than likely, not rid yourself of the lien. Preserving your home constitutes your goal with the new bankruptcy code. If you have no other options, you should explore the new bankruptcy option.
San Diego County residents and small business that may benefit from a bankruptcy should contact us for a consultation. Our attorneys can help you and your business.
Protect Law Group has proven, nationwide experience resolving SBA loan or Treasury collection cases for individual debtors. Our Firm Attorneys can resolve SBA loans in default through out-of-court negotiations, offers in compromise and structured workouts.
We also have extensive experience in the court room as well. If you have been sued by your SBA lender in state or federal court in San Diego, Orange and/or Los Angeles County and need litigation or bankruptcy assistance, call us now to discuss the specifcs of your case.
Owe more than $30,000? Contact Protect Law Group for a Case Evaluation or call us toll-free at 1-888-756-9969.
We can analyze your SBA debt or Treasury debt collection problems and advise you on potential solutions.
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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 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.
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.
Clients personally guaranteed an SBA 7(a) loan that was referred to the Department of Treasury for collection. Treasury claimed our clients owed over $220,000 once it added its statutory collection fees and interest. We were able to negotiate a significant reduction of the total claimed amount from $220,000 to $119,000, saving the clients over $100,000 by arguing for a waiver of the statutory 28%-30% administrative fees and costs.
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