Debt Relief Options
Are you currently struggling to deal with an SBA loan default? Let us help.
The shuttering of your business and the seizure and liquidation of its assets can be a painful and emotional time for many entrepreneurs. However, it is only when the borrower is reminded that they also pledged personal assets to the SBA that they begin to realize how much worse things can get. The Perliski Law Groups offers several options that may be of benefit:
SBA Loan Workout
Not all businesses run smoothly after start-up. In fact, at some point, many entrepreneurs run into trouble and cannot make the payments on their SBA loan. Lenders are not anxious to rewrite the terms of their loan, nor is the SBA. However, given the choice between a bad loan and a workout,lenders at larger institutions may find a workout plan and loan modification proposal preferable.
If you are facing an SBA loan default, the Perliski Law Group will use their best-efforts to negotiate a workout plan and loan modification with the SBA lender. The process is not quick and requires a strong commitment from the borrower, but can be an effective solution if the lender is approached early enough.
What types of loan modifications are available for SBA Loans?
• Temporary/permanent reduction of interest.
• Defer payments and/or principal only.
• Extend Maturity Date to reduce payments.
• Temporary Reduction of Payments.
• Re-amortize loan payments
What is the SBA’s policy on loan modifications. Do these really happen?
Authorization and guidelines for an SBA loan modification may be found at: Standard Operation Procedure 50-50-4, Chapter 5, paragraphs 8(a), 15(a), 16(a), 17 as well as Chapter 7, Paragraphs 5(b) – 5(h).
If you need help with an SBA loan workout, and are a Texas resident, contact the business attorneys at the Perliski Law Group. We may be reached at (214) 446-3934 or using the Contact Form on this page.
SBA Offer in Compromise
For the vast majority of shell-shocked small business owners, the closure of their business and the liquidation of its assets does not bring an end to the traumatic default process. While the SBA guaranty may protect the lender, it does nothing to protect the business owner and other guarantors on the SBA loan. Subsequent collection efforts can result in the loss of assets or even wage garnishment by the U.S. Treasury. SBA loans are dischargeable in bankruptcy, but bankruptcy is not the only option for dealing with an SBA loan default.
During the critical time after your business assets have been liquidated and before any further litigation has been commenced, it is often possible to enter into settlement negotiations with the lender and the SBA to completely resolve the remaining loan deficiency for a fraction of the total amount due. SBA loan default help is available. This process is referred to as the SBA Offer in Compromise program.
We provide the following legal services in our SBA Deficiency Resolution package:
1. Review your Case for Settlement though the SBA Offer in Compromise Program
2. Review your original SBA loan documents
3. Collect financial documentation, including a complete lists of assets and liabilities
4. Notify your lender or the SBA of your intent to Settle
5. Prepare SBA Form 1150 (Offer in Compromise)
6. Prepare SBA Form 770 (Financial Statement of Debtor)
7. Review all financial data and recommend a Settlement Offer Amount to Borrower
8. Prepare and file the Offer in Compromise with your lender or the SBA, as appropriate
9. Negotiate with the lender or SBA to effectuate a settlement
What are the chances the SBA will accept my offer?
The SBA is not required by law to accept an Offer in Compromise from any borrower. However, the SBA knows a certain percentage of loans will fail and it is for this reason that the SBA Offer in Compromise program exists. Keep in mind that the SBA is looking for the “best deal” it can get. If your offer provides them with a quick, cost-effective, resolution to the matter that is superior to what they might receive over a five year period using enforced collection methods, they will seriously consider it.
Is there anything I can do to help my chances?
Yes, there is one thing. Prompt action increases the likelihood that your offer will be successful. If you receive a 60-day demand notice from the SBA, its important that you take action. If you wait too long to initiate settlement discussions, the SBA may transfer your account to the U.S. Treasury Department’s Treasury Offset Program (TOP). Under top your IRS tax refund can be seized and your wages garnished. Even your Social Security benefits can be offset.
If you need help with an SBA default or just need advice about the debt relief options that may be available to you, contact the business law attorneys at the Perliski Law Group. We may be reached at (214) 446-3934 or using the Contact Form on this page.
Treasury Debt Defense
If your loan has been referred to the U.S. Treasury for collection, this means the SBA is no longer involved with the collection of your loan balance. 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, including the Small Business Administration. If this sounds bad, it is.
TOP means business and the extra-judicial collection tools available to the government include wage garnishment, tax refund offset, offset of federal retirement and military benefits, as well as social security payments. TOP can even seize your IRS tax refund before you ever see the check.
For some readers familiar with Texas law, you may be thinking that wage garnishment is illegal in Texas.This is true, unless you are the federal government. The government only has to give you 30-days notice prior to initiating garnishment of your wages, at which point 15% of your disposable pay.
While there may be a statute of limitations on how long the SBA can wait before they sue, the U.S. Treasury can continue its collection actions against you until they are paid in full — even if that takes the rest of your life.
We provide the following legal services as part of our Treasury Settlement Package:
1. Review your Case for Settlement though the Department of Treasury
2. Review your original SBA loan documents
3. Review current TOP collection actions, if any.
4. Work with Treasury to suspend TOP collection actions
5. Collect financial documentation, including a complete lists of assets and liabilities
6. Notify your the Treasury of your intent to Settle
7. Negotiate with the Treasury Department
8. Prepare and file a Settlement Package with the Treasury Department
What are my chances?
It is impossible to say and our firm cannot guarantee success. But, doing nothing at this late stage will result in the the Treasury Department aggressively attempting to collect the debt. TOP can garnish wages, seize IRS Refunds and even offset Social Security and Retirement benefits. In some cases, borrowers may feel forced to file bankruptcy. But, despite the harsh collection efforts, borrowers can and do regularly settle with the Treasury Department.
What can I do to help?
Apart from providing us your full cooperation and patience, if you are reading this and have not yet received your 60-day demand notice from the SBA, contact us at once before your file is transferred to the Treasury. This will save you collection fees added by TOP that can increase your loan balance by up to 30%!
If you need help with an SBA loan default that has been referred to the Department of Treasury for enforced collection through the Treasury Offset Program (TOP), contact the business law attorneys at the Perliski Law Group. We may be reached at (214) 446-3934 or using the Contact Form on this page.
SBA loans are not protected in bankruptcy and may be discharged like many other debts. However, SBA liens are not discharged by a bankruptcy filing. While it is illegal in Texas for an SBA lender to file a lien against your homestead, other real property pledged as collateral may remain vulnerable.
Bankruptcy is a complicated process and the outcome is dependent on many variables, including your income at the time of filing and the assets you and your spouse hold, as well as any outstanding liens against them. However, in many cases bankruptcy may be a viable solution.
Licensed for over 20 years, our bankruptcy attorneys have helped hundreds of small-business owners in Texas get a fresh start.
If you are a Texas resident and need help with an SBA loan default, contact the bankruptcy attorneys at the Perliski Law Group. We may be reached at (214) 446-3934 or using the Contact Form on this page.