Has your SBA debt been sent to Treasury?
In many cases clients find out all too late that a long forgotten SBA debt was transferred to the U.S. Treasury for collections. In some cases, the transfer to Treasury happens almost immediately, and without much warning, after an SBA offer in compromise is declined. In still other cases, if you have moved, a written notice may not reach you until years later. Whatever the case, the Perliski Law Group offers several options that may be of benefit:
What is Administrative Wage Garnishment?
In the context of an U.S. Small Business Administration (SBA) loan default, Administrative Wage Garnishment (AWG) is a debt collection process that allows a federal agency to order a non-federal employer to withhold up to 15 percent of an employee’s disposable income to pay a federal non-tax delinquent debt owed to SBA.
Treasury, on behalf of the SBA, is authorized to issue a wage garnishment order to collect the debt. Under federal law, a court order does not need to be obtained. The employer will be required to send the amounts deducted to Treasury for payment to the SBA. The AWG process is governed by federal law. State laws do not apply.
What are my rights?
You have a right to contest the SBA’s attempt to garnish your wages. If a request for a hearing is received within 15 business days following the mailing of the written notice to a debtor, a hearing must be held prior to the issuance of a wage garnishment order.
If a request for a hearing is received after 15 business days, a hearing must still be held; however, the garnishment order may be issued before the hearing is concluded. A hearing may be requested concerning the existence or amount of the debt, or the terms of the proposed repayment schedule under the garnishment order (hardship).
The SBA will determine whether the hearing will be oral or written. If the SBA decides to hold an oral hearing, the SBA will decide when and where the hearing will be held, and the debtor may decide whether the hearing will be in-person or by telephone. The debtor will have to pay any travel expenses for an in-person hearing.
What if my employer just ignores an AWG order?
An employer who fails to comply with an AWG order is liable for amounts that the employer fails to withhold, plus possible penalties and fees. Noncompliance may result in legal action by the Department of Justice (DOJ).
If you have received a Notice of Intent to Initiate Administrative Wage Garnishment, contact the SBA loan default attorneys at the Perliski Law Group for a free consultation. 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 garnishment law, you may be thinking that wage garnishment is illegal in your state.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 is at risk.
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 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 SBA loan default attorneys at the Perliski Law Group for a free consultation. We may be reached at (214) 446-3934 or using the Contact Form on this page.