Many defaulted business owners that call me or email me are trying to figure
out why so much time has gone by before they finally get a default notice
from the SBA. The answer is simple, they are very busy and flooded with SBA
defaulted loans. I have clients that have been in default for over 3 years
after their business was shut down and liquidated before they received any
documentation from the SBA saying they have a default balance and must pay
within 60 days. This is a very crucial point in time where you have a one
chance opportunity to submit an Offer in Compromise "OIC" which allows you to
negotiate a settlement for less than what you owe. This can be done in a
one-time lump sum payment, or a payment plan paid over time. If you do not
respond within the 60 day window, the SBA will pass this down to the US
Department of Treasury which makes things MUCH more difficult. Responding as
quick as possible once you receive the 60 day Default notice is most
certainly in your best interest to prepare time to put a comprehensive
package together to submit an acceptable Offer In Compromise. I am more than
happy to answer any questions by email anytime. Ryan Lineham and Sean Rosser
- Bridge Management Consulting - Ryan@BridgeMgt.com
It is also worth noting that if a borrower gets a 60 letter from the SBA, a
settlement for less than the full balance is typically only possible if the
client is making a lump sum payment. If you want to pay over time, they will
not be willing to discount the loan balance (this is different than
settlements negotiated through lenders, where a settlement can be paid over
time). The fact that the rules are different depending on which entity you
are dealing with can be frustrating for borrowers, which is why it may be
worth considering working with an SBA professional.
Jason Milleisen, Founder, Distressed Loan Advisors
I would like to add a few specifics that I hope enhance the benefit defaulted
borrowers may get from your posting. The 60 day window refers to time after
the loan has been "charged off" at the lender level and given to the SBA to
handle directly. A lender has the ability to service a note for a variable
time period before having to take this step, even when the borrower has
defaulted. They are more likely to handle your note directly if you are
providing them with cooperation and communication.
If you are in that 60 day window, contact the SBA office located in
Birmingham, AL as they service the file up until the day it is transferred to
the US Treasury and more than once I have had success dealing directly with
Birmingham.
If the file is already serviced by the US Treasury, you can still ask the SBA
representative who was handling the file to submit a retraction. Ryan is
absolutely correct that the Treasury is extremely difficult to work with
unless you have 50% of the outstanding balance. The SBA does have the right
to attempt to recover your file from the US Treasury if you were not notified
in writing before the file was transferred.
I hope this helps anyone dealing with these situations.
AG
Adam Gleason
Senior Strategist
Second Wind Consultants.
DLA | Performer | 10/27/2012 - 7:58 pm
settlement for less than the full balance is typically only possible if the
client is making a lump sum payment. If you want to pay over time, they will
not be willing to discount the loan balance (this is different than
settlements negotiated through lenders, where a settlement can be paid over
time). The fact that the rules are different depending on which entity you
are dealing with can be frustrating for borrowers, which is why it may be
worth considering working with an SBA professional.
agleason | Window Shopper | 10/16/2012 - 1:58 pm
I would like to add a few specifics that I hope enhance the benefit defaulted
borrowers may get from your posting. The 60 day window refers to time after
the loan has been "charged off" at the lender level and given to the SBA to
handle directly. A lender has the ability to service a note for a variable
time period before having to take this step, even when the borrower has
defaulted. They are more likely to handle your note directly if you are
providing them with cooperation and communication.
If you are in that 60 day window, contact the SBA office located in
Birmingham, AL as they service the file up until the day it is transferred to
the US Treasury and more than once I have had success dealing directly with
Birmingham.
If the file is already serviced by the US Treasury, you can still ask the SBA
representative who was handling the file to submit a retraction. Ryan is
absolutely correct that the Treasury is extremely difficult to work with
unless you have 50% of the outstanding balance. The SBA does have the right
to attempt to recover your file from the US Treasury if you were not notified
in writing before the file was transferred.
I hope this helps anyone dealing with these situations.
AG
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