How to Recall Defaulted SBA Loan from Treasury Offset Program TOP Many clients who have defaulted on an outstanding SBA EIDL loan have contacted us regarding how to “Recall” their loan from the U.S. Treasury Department Treasury Offset Program (“TOP”) back to the Small Business Administration (SBA) to avoid the 30% TOP penalty and to void setoff of Government payments to defaulted borrowers.First, we note that recall is  difficult to do!Advice and/or  steps on how to recall a defaulted SBA loan or what to do if a defaulted SBA loan cannot be recalled are provided below. 1. Improper Transfer.  If you did not receive the Official 60-Day Notice from the SBA, that your SBA loan was in default and  would be transferred to TOP for offset, use this error as a reason for recall and contact both TOP and SBA and argue that the loan was transferred to TOP in  error and without proper procedure. 2. Hardship Grounds. Documenting a hardship making it impossible for further payment of the SBA EIDL loan such as disability, a disaster or the closing or bankruptcy of a business if Government payments are offset (not paid) to the SBA loan borrower. 3. Intent to Cure Default.  If the borrower pays off delinquent amounts and late fees and intends to stay current on future payments, SBA may be willing to call the loan back to give another chance.4. Loan Payoff. Payoff the amount of the outstanding SBA loan balance to stop the offset. 5. Loan Compromise/Offer in Compromise. Contact the SBA or TOP and request a compromise involving negotiating a lump sum reduced payment or a reduced payment over a short period of time (Installment Payment)  for less than the full amount owed. The reduced amount to be paid  is based on “facts & circumstances” of the case, will require many forms to be completed and submitted to TOP and SBA, will require negotiations with Government officials and is at the discretion of the Government.  For those readers wishing more information on offer in compromise please seeEIDL loans and bankruptcy, which can be found at http://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.html and  a post on defaulted EIDL loans and the SBA Offer in Compromise program.  That post can be found at http://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html6. File for Bankruptcy. When the borrower files for bankruptcy, section 362 of the Bankruptcy Code provides for an automatic stay, which stops the Offset and the business depending on the Bankruptcy filed can attempt to reorganize or liquidate.  For information or guidance on Recall please contact Jim Shenwick, Esq.Jim Shenwick, Esq  917 363 3391  jshenwick@gmail.com Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!----To review Jim Shenwick’s other SBA EIDL Posts go to: Treasury Offset Program (TOP) and SBA EIDL Loanshttps://shenwick.blogspot.com/2024/04/treasury-offset-program-top-and-sba.html U.S. Seeks to Collect on Up to $20 Billion in Delinquent Covid Loanshttps://shenwick.blogspot.com/2024/03/us-seeks-to-collect-on-up-to-20-billion.html SBA EIDL Loan Charge Offshttps://shenwick.blogspot.com/2024/02/sba-eidl-loan-charge-offs.html SBA EIDL LOANS & CIVIL & CRIMINAL PENALTIES & BANKRUPTCY FILING Shttps://shenwick.blogspot.com/2024/01/sba-eidl-loans-civil-criminal-penalties.html Defaulted SBA EIDL Loans: In Reversal, U.S. to Heighten Efforts to Collect Billions in Unpaid Covid Loanshttps://shenwick.blogspot.com/2023/12/defaulted-sba-eidl-loans-in-reversal-us.html SBA EIDL Loan Defaults and the Statute of Limitations 12-24-2023https://shenwick.blogspot.com/2023/12/sba-eidl-loan-defaults-and-statute-of.html SBA EIDL Penalties if an SBA EIDL Loan is Not Repaidhttps://shenwick.blogspot.com/2023/12/sba-eidl-penalties-if-sba-eidl-loan-is.html Misuse or Misapply SBA EIDL Loan Proceeds and Chapter 7 Bankruptcy Filingshttps://shenwick.blogspot.com/2023/08/misuse-or-misapply-sba-eidl-loan.html SBA EIDL HARDSHIP PROGRA Mhttps://shenwick.blogspot.com/2023/07/sba-eidl-hardship-program.html Defaulted SBA EIDL Loans, Limited Liability Company (LLC) and Cancellation of Debt Income (COD) under Section 108 of the Internal Revenue Codehttps://shenwick.blogspot.com/2023/07/defaulted-sba-eidl-loans-limited.html Offers In Compromise ("OIC") for Defaulted SBA EIDL loans and Section 108 of the Internal Revenue Code ("IRC"), Relief of Indebted Income, a Trap for the Unwary!https://shenwick.blogspot.com/2023/05/offers-in-compromise-oic-for-defaulted.html EIDL LOAN WORKOUTS AND BANKRUPTCY    https://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.html EIDL Loan Default Questions & Answers https://shenwick.blogspot.com/2022/10/eidl-loan-default-questions-answers.html EIDL LOAN DEFAULT DOCUMENT REVIEW, WORKOUT, BANKRUPTCY FILING & OFFER IN COMPROMIS Ehttps://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.html EIDL Defaulted Loanshttps://shenwick.blogspot.com/2022/07/eidl-defaulted-loans.html New Relief Program for SBA EIDL Borrowers Who are Having Difficulty Repaying EIDL Loans " Hardship Accommodation Plan"https://shenwick.blogspot.com/2023/05/new-relief-program-for-sba-eidl.html EIDL LOANS and SBA OFFER IN COMPROMISE PROGRA Mhttps://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html PPP & EIDL Fraudhttps://shenwick.blogspot.com/2022/08/ppp-eidl-fraud.html Better to connect-What small business owners need to know about repaying loans tied to pandemic relief from the SBA EIDL Loanshttps://shenwick.blogspot.com/2022/11/better-to-connect-what-small-business.html 

Treasury Offset Program (TOP) and SBA EIDL LoansMany clients have contacted our office to report that their delinquent SBA EIDL loans have been transferred to the Treasury Offset Program (TOP), and a 30% penalty has been added to their loan balance.The purpose of this Blog post is to discuss the Treasury Offset Program (TOP).   The Treasury Offset Program (TOP)  is operated by the Department of the Treasury’s Bureau of the Fiscal Service and it is a federal agency that was created to help the Government collect debts from individuals and businesses that owe money to the Government. When a debt owed to the Government is past due, TOP assists in collecting the debt by withholding funds due from the Government to the delinquent borrower. This process is known as "offsetting the payment" or "administrative offset."Examples of offset include the government withholding a tax refund due to a taxpayer who owes money to the government, garnishing 15% of a taxpayer's Social Security payment, or not paying money owed to a government vendor who defaulted on an SBA loan.When a defaulted SBA loan is transferred from the SBA to TOP, a 30% penalty is added to the loan balance and TOP will notify credit reporting agencies of the referral. A borrower may try and have the Defaulted SBA loan “recalled” from TOP to the SBA, but in our experience that is hard to doWhat are a borrower's options when a loan has been referred to TOP?They can pay the full amount owed (including the 30% penalty). They can submit an Offer in Compromise to TOP They can file for Bankruptcy to stay TOP’s collection efforts and discharge the loan balance orDo nothingThe basis for filing an offer in compromise is Federal Regulation 31 CFR § 902.2 - Bases for compromise. That regulation provides that (a) Agencies may compromise a debt if the Government cannot collect the full amount because:  (1) The debtor is unable to pay the full amount in a reasonable time, as verified through credit reports or other financial information; (2) The Government is unable to collect the debt in full within a reasonable time by enforced collection proceedings; (3) The cost of collecting the debt does not justify the enforced collection of the full amount; or (4) There is significant doubt concerning the Government's ability to prove its case in court.Factors that will be considered in accepting an offer in compromise are Ability to Pay: TOP assesses the taxpayer's income, expenses, asset equity, and overall financial situation to determine their ability to pay the full amount owed.Income and Expense Analysis: A detailed analysis of the taxpayer's income sources, monthly living expenses, and discretionary spending is conducted to evaluate their financial circumstances.Asset Equity: TOP reviews the taxpayer's equity in assets, such as real estate, vehicles, investments, and other valuable items, as potential sources of payment.Future Income Potential: The borrowers earning potential are taken into account to estimate their ability to pay the debt in the future.History: The borrower's  attempts to pay or resolve the debt, are evaluated.Special Circumstances: Exceptional circumstances or other hardships, may be considered when evaluating an OIC.Collectibility: TOP reviews the likelihood of collecting the full amount owed.Tax Administration: An OIC may be accepted if it would promote future compliance or resolving economic hardship.Client’s or advisors who have defaulted SBA loans that have been transferred to TOP should contact Jim Shenwick, Esq.Jim Shenwick, Esq  917 363 3391  jshenwick@gmail.com Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

Make your mortgage payment in Chapter 13 It’s easy to lose track of your mortgage payments in Chapter 13.  They don’t call you if you miss a payment.  It seems like nothing happens. But if you slip back to three or four payments behind, they go to the judge and ask permission to foreclose you.  Even if you scramble to catch up, they tack on legal fees that you have to pay. And if the the mortgage company will let you stay two or three payments behind, the bankrutpcy court won’t.  You’ll get to the end of your Chapter 13 plan, and the judge then throws out your case.      The post Make your mortgage payment in Chapter 13 appeared first on Robert Weed Bankruptcy Attorney.

Make your mortgage payment in Chapter 13 It’s easy to lose track of your mortgage payments in Chapter 13.  They don’t call you if you miss a payment.  It seems like nothing happens. But if you slip back to three or four payments behind, they go to the judge and ask permission to foreclose you.  Even if you scramble to catch up, they tack on legal fees that you have to pay. And if the the mortgage company will let you stay two or three payments behind, the bankrutpcy court won’t.  You’ll get to the end of your Chapter 13 plan, and the judge then throws out your case.      The post Make your mortgage payment in Chapter 13 appeared first on Robert Weed Bankruptcy Attorney.

Success in Chapter 13: What You Need to Know You want to be one of the four out of ten consumers who succeed in Chapter 13.  As your bankruptcy lawyer, I want that too. So I’ve collected some of the most important tips for getting to success in Chapter 13. The Chapter 13 Trustee in Northern Virginia is Thomas Gorman When you file Chapter 13 bankruptcy in Alexandria Virginia, you make payments to the Chapter 13 Trustee, Thomas Gorman. But you do NOT send them to his Alexandria address.  There’s a bank in Memphis that handles Chapter 13 payments for most of the bankruptcy courts in the country.  You send your payment to                                                Thomas Gorman, Trustee                                                P.O. Box 1553                                                 Memphis, TN 38101-1553 Be sure to put your case number on your check. Make the check payable to Thomas Gorman, Trustee. I have a lot more info on Chapter 13 Trustee Thomas Gorman, here.  PS, His physical address is 1414 Prince Street, Suite 202, Alexandria VA.  You should never have to go there.     The post Success in Chapter 13: What You Need to Know appeared first on Robert Weed Bankruptcy Attorney.

Success in Chapter 13: What You Need to Know You want to be one of the four out of ten consumers who succeed in Chapter 13.  As your bankruptcy lawyer, I want that too. So I’ve collected some of the most important tips for getting to success in Chapter 13. The Chapter 13 Trustee in Northern Virginia is Thomas Gorman When you file Chapter 13 bankruptcy in Alexandria Virginia, you make payments to the Chapter 13 Trustee, Thomas Gorman. But you do NOT send them to his Alexandria address.  There’s a bank in Memphis that handles Chapter 13 payments for most of the bankruptcy courts in the country.  You send your payment to                                                Thomas Gorman, Trustee                                                P.O. Box 1553                                                 Memphis, TN 38101-1553 Be sure to put your case number on your check. Make the check payable to Thomas Gorman, Trustee. I have a lot more info on Chapter 13 Trustee Thomas Gorman, here.  PS, His physical address is 1414 Prince Street, Suite 202, Alexandria VA.  You should never have to go there.     The post Success in Chapter 13: What You Need to Know appeared first on Robert Weed Bankruptcy Attorney.

The bankruptcy means test often feels like a maze. Find your way out, to the best result possible, with the tips and tricks we’ll share in a free webinar on Means Test Part 2: Quirks and Quagmires, April 9th at 10 am PDT. Register here. Judge John Gustafson and bankruptcy specialist Cathy Moran will focus […] The post Maximize Means Test Deductions Every Time appeared first on Bankruptcy Mastery.

Here’s what we usually need for our second meetingMy Be Happy form asks the information the bankruptcy court needs to approve your case. So we can “be happy.”The Be Happy form is mostly bio information that we need to get your case approved.  You can start here.  (Please don’t budget too low on your food and clothes.)We’ll need a credit report. You have a legal right to get a free one at annualcreditreport.com. Usually, TransUnion is the easiest one of the three to download and read. They’d rather you pay than get a free one, so they make it just a little complicated. Vanessa can take you through it if you have any trouble,Vanessa will also set up document portals for the required documents. Last year’s taxes, seven months of pay stubs, your ID and Social Security card.I’m required to send you these fine-print notices.This links to the way I calculate your legal fee.  This is the price set by the court for Chapter 13 bankruptcy cases.   The post Here’s What We Need for our Second Meeting appeared first on Robert Weed Bankruptcy Attorney.

Here’s what we usually need for our second meetingMy Be Happy form asks the information the bankruptcy court needs to approve your case. So we can “be happy.”The Be Happy form is mostly bio information that we need to get your case approved.  You can start here.  (Please don’t budget too low on your food and clothes.)We’ll need a credit report. You have a legal right to get a free one at annualcreditreport.com. Usually, TransUnion is the easiest one of the three to download and read. They’d rather you pay than get a free one, so they make it just a little complicated. Vanessa can take you through it if you have any trouble,Vanessa will also set up document portals for the required documents. Last year’s taxes, seven months of pay stubs, your ID and Social Security card.I’m required to send you these fine-print notices.This links to the way I calculate your legal fee.  This is the price set by the court for Chapter 13 bankruptcy cases.   The post Here’s What We Need for our Second Meeting appeared first on Robert Weed Bankruptcy Attorney.

The Latest Things you Need to Know About Student Loan Bankruptcy Ed Boltz Thu, 04/04/2024 - 16:34 Here's a breakdown of the latest developments regarding filing student loan debts in bankruptcy: Historically Difficult, Now Easier Undue Hardship Standard: It's been notoriously difficult to discharge student loans in bankruptcy. You must prove to the court that repaying the loans would cause "undue hardship" on you and your dependents. This has been  a high bar to meet. Changes to Student Loan Discharge: In November 2022, the Departments of Justice and Education introduced changes that had been under consideration under both the Biden and Trump administrations to the process aiming to make it easier for borrowers to potentially discharge federal student loan debt in bankruptcy. New Streamlined Path: The process now includes a form borrowers can use to  certify their financial situation. The Department of Justice can potentially agree to a discharge recommendation without extensive court proceedings. The final decision still rests with a bankruptcy judge. Key Points to Understand Success Not Guaranteed: While the process has been simplified somewhat, successfully discharging student loans in bankruptcy remains challenging. Undue Hardship Requirement Remains: You'll still need strong evidence that repayment imposes an undue hardship on your life in order to succeed. Adversary Proceeding: Discharging student loans in bankruptcy requires a separate legal filing within your bankruptcy case called an adversary proceeding. Private Loans: The streamlined process does not apply to private loans. Their dischargeability depends on the specific loan terms. What Does This Mean? More Borrowers Are Trying: Increased awareness of these legal changes has led to more borrowers attempting to discharge their student loans through bankruptcy. Early Successes: The first year since the process was changed has seen a significant number of cases with full or partial discharges granted. Important Considerations It's Not Automatic: Bankruptcy doesn't erase all debts. Student loans might not be automatically discharged even if other debts are. Impact on Credit: Filing bankruptcy itself will negatively impact your credit score. Professional Advice is Crucial: If you're struggling with overwhelming student loan debt, consider consulting with both a student loan specialist and an experienced bankruptcy attorney to fully explore your options. Blog comments Category Student Loan Debt