SBA Loan Defense Attorneys

Our Philadelphia SBA debt defense attorneys know that dealing with defaulted SBA loans can be a nightmare for struggling businesses and individual guarantors. Those helpful Small Business Administration (SBA) loans can quickly become a burden on a business when revenue drops. Even worse, the collection tactics used by SBA lenders, collectors, and lawyers are aggressive and include:

• Imposition of steep late fees and penalties
• Collections by private collectors, attorneys, and the Treasury Offset Program (TOP).
• Lawsuits
• Foreclosure
• Wage garnishment
• Imposition of late fees and penalties
• Revoking federal licenses
• Treasury offsets
• Issuance of 1099(c) forms resulting in increased taxes
• Seizure and sale of collateral assets.

However, we can help you resolve your SBA debt. Fortunately, there are several options available to manage SBA loan debt, including:

1. SBA Deferment or Forbearance

If you are experiencing temporary cash-flow issues or other hardships, our debt attorneys can negotiate with the SBA or lender to postpone payments temporarily. For businesses and guarantors who are turning the corner but need more time, a deferment or forbearance from the SBA or lender could be the lifeline they need.

2. SBA Repayment Plans

The SBA offers payment plans, although navigating the process without an attorney can be difficult. Our SBA debt lawyers can handle negotiations with the SBA and work to eliminate or reduce late fees and penalties. If you qualify, our debt attorneys can help you lower your monthly payments significantly through one of the SBA's extended payment plans. We'll handle negotiations with the SBA and work to eliminate or reduce late fees and penalties.

3. SBA Loan Modification

Depending on the type of loan, particularly where the loan is secured by real property, a loan modification may be an option. If you qualify, an attorney-negotiated modification can lower your interest rate and, in some cases, reduce the principal.

4. Refinancing an SBA Loan

If you are working on obtaining a new loan with better terms to pay off the existing SBA loan, you need time. However, the SBA or Lender may become impatient and continue the collection process while you are attempting to refinance the loan. We can deal with the SBA on your behalf to give you time to get your new financing in place.

5. SBA Debt Settlement and Offer in Compromise

If you can prove financial hardship, our lawyers can negotiate with the SBA to reduce the amount you pay in interest, penalties, and total balance. A payment arrangement may even trim time from the loan term.

Quick Note: Many business owners and even debt attorneys are unaware that the SBA has an offer-in-compromise program. So, they never apply. However, applying for the program sooner rather than later may save significant interest, fees, and penalties.

6. SBA Debt Lawsuit Defense

Our debt lawyers defend both businesses and individual borrowers against SBA loan lawsuits. Even if you do not believe you can win a lawsuit against the SBA, you should consider hiring a debt defense attorney. An attorney may be able to find defenses that were not readily apparent. Moreover, fighting a lawsuit will give you time to reach a settlement or find another solution.

Quick Note: Do not ignore an SBA lawsuit. If you fail to respond to the complaint, the plaintiff will obtain a default judgment. At that point, its ability to collect against you will be magnified. Although many SBA lawsuits are an uphill battle, there are significant benefits to defending the suit. Therefore, speak to an SBA Loan Defense lawyer before deciding not to defend the case.

7. Discharge Your SBA Loans in Bankruptcy

SBA loans are dischargeable in bankruptcy. Generally, to liquidate a business,

• Chapter 7 Bankruptcy: If you have guaranteed an SBA loan, you may be able to discharge your debt in Chapter 7 bankruptcy. For those who qualify, Chapter 7 is one of the quickest and most cost-effective ways of dealing with debt. For more on the numerous benefits of Chapter 7 bankruptcy, click here.

Quick Note: Unlike an individual debtor, incorporated businesses do not receive a discharge in Chapter 7 bankruptcy. However, it is sometimes enough to wind down the business, distribute business assets, and then deal with the guarantors' personal liability. On the other hand, Chapter 7 can be a relatively inexpensive way to wind up a business or to deal with aggressive debt collectors.

• Chapter 13 Bankruptcy: In Chapter 13 bankruptcy, business owners can reorganize debts to create a manageable repayment plan. For debtors with incomes too high to qualify for Chapter 7 or assets that need protection, Chapter 13 can be a cost-effective choice. To read more on the benefits of Chapter 13 bankruptcy, click here.
• Chapter 11 Bankruptcy: In Chapter 11 bankruptcy, incorporated businesses reorganize their debts, allowing them to continue operating. Certain individuals with too much debt to qualify for Chapter 7 or 13 may benefit from Chapter 11.

8. Asset Protection in SBA Loan Cases.

The government has many tools for collecting debt, including SBA loans. We can help you protect as many of your assets as legally possible.

9. Business Dissolution-Wind Down

SBA cases often require winding down a business. If your Pennsylvania business can no longer operate, you must take specific steps to wind it down. We can help you navigate this process and wind down operations as efficiently as possible.

Dealing with SBA debt is complex and frustrating. However, our experienced debt defense attorneys are here to guide and support you, helping you find the best solution for your unique situation.

‍