I thought I'd share some wisdom with the community after working on hundreds of SBA workouts first hand. If your SBA loan is in default and you are working with your creditor to wind down the business and settle the deficiency with an offer in compromise, time is of the essence. Recently it has become apparent that banks will not wait much longer than 60-90 days after the defaulted borrower (business) has been liquidated or shut down to accept an OIC which releases the guarantors from the deficiency. After this period of time in which no OIC has been submitted, the bank will submit the file to US Department of Treasury for collection. Treasury rarely collects on these bad loans directly, rather they hire third party collection agencies to handle this. These collection agencies don't know anything about the history behind the loan, their job is to be ruthless in their collection endeavors. One such company, Pioneer Credit Recovery, is particularly nasty, and rarely settles for less than 50% of the outstanding amount. Contrast that with the results I've seen by working directly with the lender/SBA and it's easy to see the importance of addressing your outstanding SBA loan sooner rather than later, whether you're working with a consultant, attorney, or attempting it yourself. If you think your banker is nasty or difficult to work with, you don't want to see the tactics of these collection agencies..