SBA EIDL Fraud & How It Is Discovered

SBA EIDL Fraud & How It Is Discovered

Every day, and often multiple times a day, we read stories about people or businesses being indicted for PPP or SBA EIDL loan fraud.

I have always wondered how these cases are discovered.

First, the SBA Inspector General has an online portal to submit loan fraud reports. The portal can be found at https://www.sba.gov/about-sba/oversight-advocacy/office-inspector-general/office-inspector-general-hotline#submit-a-complaint.

Second, the FBI has special agents and field offices throughout the country investigating SBA EIDL loan fraud and

Third, The New York Times recently published an article titled "They Investigated Pandemic Fraud, Then Earned Thousands," available at https://www.nytimes.com/2024/11/23/us/politics/pandemic-fraud-lawsuits.html. The article explains that under the False Claims Act, private citizens can file lawsuits on behalf of the federal government against those who may have defrauded the United States. If the government recovers funds, these citizens can typically earn between 15 and 30 percent of that amount. These lawsuits are known as "qui tam," or whistle-blower cases, and citizens have recovered hundreds of thousands of dollars by bringing these cases.

This story brings to mind the old adage that one person's misfortune is another person's fortune!

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/15min

We help individuals and businesses with too much debt!

Subchapter V Bankruptcy Updates

 

A Bloomberg article https://news.bloomberglaw.com/bankruptcy-law/senate-proposal-would-grow-small-business-bankruptcy-

eligibility  is reporting that a new Senate proposal aims to increase the debt limits for Subchapter V bankruptcy eligibility for

small businesses. This proposal would restore the higher debt limit of $7.5 million for Subchapter V filings, up from the current

limit of about $3 million. The expansion would allow more businesses to take advantage of Subchapter V's benefits, which

include a more streamlined and cost-effective restructuring process compared to traditional Chapter 11 bankruptcies.

The potential revival of the higher debt limit comes after a significant drop in small business bankruptcy filings following the

expiration of the previous $7.5 million threshold.

Subchapter V, introduced in 2019, initially applied to businesses with less than $2.7 million in debt but was expanded to $7.5

million in 2020 as part of COVID-era business relief. This expansion was extended in 2022 but eventually expired, reverting

the eligibility requirement to about $3 million.

We are monitoring these developments and will continue to report on updates to Subchapter V. 

We help individuals and businesses who have too much debt!

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/15min

We help individuals & businesses with too much debt!

Many small businesses teeter as costs stay high while sales drop

USAToday has an article on why so many businesses are closing or filing for Bankruptcy. At Shenwick & Associates we seeing an increase in small businesses either closing or filing for  Bankruptcy. 

https://www.usatoday.com/story/money/2024/09/29/small-businesses-inflation-struggles/75405075007/?gnt-cfr=1&gca-cat=p 

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/15min

We help individuals & businesses with too much debt!

CELSIUS PREFERENCE CLAWBACK ADVERSARY PROCEEDINGS

 

CELSIUS PREFERENCE CLAWBACK ADVERSARY PROCEEDINGS

As many readers of our posts are aware, we have represented numerous former Celsius customers who have been sued in preference clawback actions in Adversary Proceedings in the SDNY Bankruptcy Court.

We have also been retained by clients who have settled their cases and asked us to review the 10-page Settlement Agreements.

At Shenwick & Associates, our bankruptcy and crypto experience has aided us in settling many cases on very favorable terms for the defendants.

Recently, the Bankruptcy Court held a hearing and determined that outstanding settlement offers will expire at 5:00 p.m. on October 15, 2024. We believe it is in the best interest of most defendants to settle their actions as soon as possible.

Clients who are defendants can contact Jim Shenwick, Esq. to discuss pending lawsuits or settlements.

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/15min

We help individuals & businesses with too much debt!

Bankruptcy Boom: Why More Young Adults Are Drowning in Debt!

Bankruptcy Boom: Why More Young Adults Are Drowning in Debt!

 Forbes has a very interesting and informative article about young adults, debt and surging bankruptcy filings by young people. The article can be found at https://www.forbes.com/advisor/debt-relief/bankruptcies-on-the-rise-gen-z-millennial-debt/

At Shenwick & Associates we can confirm that many young people are filing for Bankruptcy.

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/15min

We help individuals & businesses with too much debt!

Many Small Businesses Struggle with COVID-19 EIDL Loan Repayment

 

Many Small Businesses Struggle with COVID-19 EIDL Loan Repayment

Recent reports highlight a growing concern for small businesses that received Economic Injury Disaster Loans (EIDL) during the COVID-19 pandemic. According to a Fast Company article, a significant number of these businesses are facing difficulties in repaying their loans.   The article can be found at https://www.fastcompany.com/91183555/eidl-loans-covid-19-small-businesses

The Scale of the Issue

The Small Business Administration (SBA) distributed approximately 4 million loans through the EIDL program, totaling $380 billion. As of late 2023, more than $300 billion remained outstanding. Unlike some other pandemic-era financial assistance, EIDL loans are not forgivable and must be repaid in full.

Impact on Business Operations

Businesses with outstanding EIDL loans are experiencing several challenges:

Reduced access to additional credit

Limitations on new investments due to existing debt

Potential closure or bankruptcy for those unable to meet repayment terms

Our Experience

As legal professionals specializing in business debt issues, we've worked with hundreds of companies struggling with SBA EIDL loans. These loans range from $20,000 to $2,000,000. Our observations align with the broader trend:

The majority of our clients have been unable to make payments on their SBA EIDL loans

Many have found it impossible to refinance these loans

A significant number have either:

Closed their businesses

Filed for bankruptcy

Attempted to negotiate workouts with the SBA

Additional Complications

Businesses defaulting on SBA EIDL loans face further challenges:

Personal guarantee issues

Cancellation of debt tax implications

We have extensive experience counseling clients on these complex matters.

Seeking Assistance

If your business has defaulted on an SBA EIDL loan or you're dealing with personal guarantee issues related to these loans, it's crucial to seek professional advice.

Contact Jim Shenwick for assistance:

Jim Shenwick, Esq.

Phone: 917-363-3391

Email: jshenwick@gmail.com

To schedule a 15-minute telephone consultation, please use our online scheduling tool.

We specialize in helping individuals and businesses manage overwhelming debt.

Celsius Preference Claw back Adversary Proceedings: To Settle or to Fight?

 

As many of our readers are aware, Jim Shenwick, Esq., a New York State licensed Bankruptcy attorney with extensive crypto experience, is representing numerous Celsius customers who have been sued in preference claw back adversary proceedings.

 One of the most frequent questions we receive is whether clients should settle with Celsius or defend against the litigation. In this post, we'll explore why settling might be the better option for most defendants.

 Why Settlement May Be Preferable

 1. Legal Basis: While many clients believe these lawsuits are baseless or unfair, Section 547 of the Bankruptcy Code actually permits a debtor to file preference claw back actions. Our law firm has defended these actions across various industries, including retail, jewelry, garment, and crypto.

 2. Cost of Defense: Defending against these actions can be expensive. Costs include:

   - Retaining an experienced attorney

   - Participating in mediation (paying half the cost)

   - Engaging in discovery with the debtor

   - Potentially going to trial before a bankruptcy judge

 3. Time and Resources: These cases are often difficult and time-consuming to defend. Legal fees, mediation costs, and expert witness fees can range from $25,000 to $100,000. The process could take up to three years to reach trial.

 4. Limited Defenses: Common defenses in preference cases include:

   - "Ordinary course of business": This defense typically does not apply in crypto cases where most parties invested and withdrew funds in a single transaction.

   - "New value": This defense requires that the customer bought more crypto from Celsius after their initial withdrawal. We have not encountered this scenario in our cases.

 5. Untested Legal Arguments: Some attorneys and consultants suggest defenses based on Sections 546(c) and 546(g) of the Bankruptcy Code. However, these defenses require a judge to classify crypto as either a commodity, a security or a swap agreement.. While some government agencies such as SEC and the CFTC have taken these positions, we are not aware of any bankruptcy case that has made such a determination.

 The Case for Early Settlement

 1. Favorable Terms: In our experience, earlier settlements in preference litigation often come with more favorable terms for defendants.

 2. Avoiding Escalating Costs for Both Parties: If the debtor is forced to litigate, try the case and prevails, settlements after judgment are likely to be significantly more expensive for defendants then pretrial settlements.

 3. Learning from History: In the Madoff case, defendants who chose to litigate rather than settle often ended up losing their cases, paying substantial legal fees and expert witness fees, and having to pay the full judgment amount plus post judgment interest of 9% per anum.

 

Our Recommendation

While each case has its unique facts, we generally recommend that Celsius defendants do the following:

 1. Hire an experienced bankruptcy attorney with crypto knowledge.

2. Work towards settling their cases as soon as possible and for the lowest amount achievable.

 Our firm has represented many Celsius defendants and has successfully settled numerous cases on favorable terms for our clients.

 Contact Information

 If you're a Celsius defendant looking to discuss your lawsuit or explore settlement options, please contact:

Jim Shenwick, Esq.

Email: jshenwick@gmail.com

Phone: 917-363-3391

 To schedule a 15-minute telephone consultation, please use this link: [Schedule a Call](https://calendly.com/james-shenwick/15min)

 

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Each case is unique, and you should consult with a qualified attorney to discuss your specific situation.

 

Money Startups Are Booming--but So Are Bankruptcies INC.

Startups Are Booming--but So Are Bankruptcies. See the article at Inc. https://www.inc.com/chris-morris/bankruptcies-vc-backed-startups-rising-data.html

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/15min

We help individuals & businesses with too much debt!

Celsius Preference Clawback settlement and Review by a Client 08-21-2024

Client Review below:

" I contacted Jim seeking counsel as one of the 2000 defendants in the Celsius crypto bankruptcy clawback case. After a few short conversations with him, I quickly knew he was the right person for the job. Once the retainer was paid, Jim dropped everything and fully dedicated himself to my case. In just a matter of a few days, Jim had negotiated a very favorable settlement. I highly recommend Jim if you find yourself in a similar situation and are in need of representation"

My pleasure to help! Thanksfor the review. Jim

Celsius Bankruptcy Claw Back Adversary Proceedings in SDNY Bankruptcy Court Settlement Update

Celsius Bankruptcy Claw Back Adversary Proceedings in SDNY Bankruptcy Court Settlement Update

Jim Shenwick, Esq. is proud to announce that he just settled another Celsius Bankruptcy Claw Back Adversary Proceedings in the SDNY.

The client had been sued for over $700,000. Based on a review of Exhibit A to the Complaint, which listed the transactions to be clawed back, we discovered that Exhibit A overstated the transactions in the relevant 90-day period, the cryptocurrency valuation was incorrect, and the client had a "New Value" defense.

When all was settled, the client paid back a small percentage of the $700,000 sought.

Clients who are being sued for preference clawback's 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/15min

We help individuals & businesses with too much debt!

Celsius Bankruptcy Claw Back Adversary Proceedings in SDNY Bankruptcy Court

Celsius Bankruptcy Claw Back Adversary Proceedings in SDNY Bankruptcy Court 

Celsius Network LLC, the crypto company, filed for Chapter 11 bankruptcy. Pursuant to their confirmed Chapter 11 plan, they have commenced 2,000 adversary proceedings in the Southern District of New York, seeking to claw back monies withdrawn by Celsius customers 90 days prior to the bankruptcy filing or from April 14, 2022, through July 13, 2022 (the “Preference Period”).

The 2,000 lawsuits are being brought by ASK LP (Debtor’s preference litigation counsel)

Jim Shenwick, Esq. has defended over 100 adversary proceedings for various causes of action, including preferences and fraudulent conveyances. He is familiar with cryptocurrency and has a working relationship with ASK LP.

Jim Shenwick was recently retained by a client to defend against a Celsius lawsuit seeking to 

claw back over $200,000 withdrawn from Celsius prior to the bankruptcy filing. We have commenced settlement negotiations and are optimistic about a very favorable settlement for the client.

We have also been approached by another former Celsius customer who was sued in a clawback action.

Clients who have been sued or have questions about the clawback lawsuits are advised to contact Jim Shenwick as soon as possible to discuss their options or to seek representation in these cases.

Jim Shenwick can be reached at 917 -363-3391 or at jshenwick@gmail.com 

Please click the link to schedule a telephone call with me. 

https://calendly.com/james-shenwick/15min

Commercial Chapter 11 Bankruptcies see a 34% increase in the first half of 2024

Commercial Chapter 11 Bankruptcies see a 34% increase in the first half of 2024.

 See  https://www.conchovalleyhomepage.com/news/national-news/commercial-chapter-11-bankrupcies-see-a-34-increase-in-the-first-half-of-2024/amp/

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/15min

We help individuals & businesses with too much debt!

After Dismissal of Bankruptcy Case, Here’s What’s Next for Giuliani

 

After Dismissal of Bankruptcy Case, Here’s What’s Next for Giuliani?

 Without the protection of Chapter 11, the former mayor and Trump lawyer could have his assets seized and sold by creditors. See the article in the New York Times. The article can be found at https://www.nytimes.com/2024/07/13/us/politics/rudy-giuliani-bankruptcy-case.html?smid=nytcore-android-share

When Mayor Giuliani filed for Chapter 11 bankruptcy, he received the benefit of Section 362 of the Bankruptcy Code, which provides an automatic stay against lawsuits and enforcement of judgments so the debtor can reorganize. With the dismissal of the bankruptcy case, Mayor Giuliani loses the protection of the automatic stay, and his assets can be liened or levied by creditors. 

Individuals with questions about the automatic stay or personal bankruptcy 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/15min

We help individuals & businesses with too much debt!

Companies going bankrupt at the fastest pace since 2020 in historic surge

The New York Post is reporting that "Companies going bankrupt at the fastest pace since 2020 in historic surge".  They stated that there is a “historic surge” of corporate bankruptcies underway in the US, as debt-saddled companies struggle to adjust to the new era of high interest rates. The story can be found at 

https://nypost.com/2024/07/11/business/companies-going-bankrupt-at-the-fastest-pace-since-2020-in-historic-surge/?utm_source=gmail&utm_campaign=android_nyp

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/15min

We help individuals & businesses with too much debt!

CHAPTER 13 NEW DEBT LIMITS

Based on the expiration of a law, there are now two separate debt limits for Chapter 13 cases. To file a Chapter 13 bankruptcy case, a debtor must have no more than $465,275 in unsecured debt and no more than $1,395,875 in secured debt (only noncontingent, liquidated debt is included in each instance).

For those clients interested in filing for chapter 13 or chapter 7 personal Bankruptcy 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/15min

We held individuals & businesses with too much debt!

Small Business Bankruptcy Rules get Tighter after US law expiration Reuters

Reuters reports that the debt limit for Subchapter V Bankruptcy for small businesses, initially set at $2.7 million, was temporarily raised to $7.5 million by the Coronavirus Aid, Relief, and Economic Security Act passed in 2020. However, this limit has now reverted to $2.7 million following the expiration of the Coronavirus Aid law on Friday, June 21, 2024..  

The story can be found at https://www.reuters.com/legal/government/small-business-bankruptcy-rules-get-tighter-after-us-law-expiration-2024-06-21/

The reduced debt limit will reduce the number of small business that can file for SubV Bankruptcy. Hopefully lawmakers will increase the debt limit in the future. People or businesses with questionings about Subchapter V 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/15min

We held individuals & businesses with too much debt!

The SBA approved millions of loans during Covid. It now sits at the center of a bankruptcy wave. The Business Journals

The Business Journals is reporting that SBA Loans have created a wave of bankruptcy filing.  The story can be found at https://www.bizjournals.com/charlotte/bizwomen/news/latest-news/2024/06/sba-covid-eidl-loan-bankruptcy-congress-banks.html

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/15min

We held individuals & businesses with too much debt!

Asset Protection Planning

Many clients have contacted us recently regarding Asset Protection Planning. This post discusses Asset Protection Planning and the strategies used in it.

What is Asset Protection Planning? Asset protection planning refers to the legal techniques and strategies employed to protect an individual's assets from creditors or liabilities.

Is Asset Protection Planning legal? Yes, provided that the strategies used are not fraudulent conveyances or made with the intent to defraud creditors. In counseling clients who request Asset Protection Planning, we review the property they own, their existing and future liabilities, and their budget.

In counseling clients who request Asset Protection Planning, we review the property owned by the client, their existing liabilities, future liabilities, and their budget.

For example, if a client is married and owns a house, is the house held as tenancy by entirety with their spouse? If a client owns a house, are they living in it so they can claim the NYS homestead exemption? If they have a pension plan (such as IRA, SEP, or 401(k)), are those plans fully funded?

Other opportunities may exist as well.

However, if a client is subject to a pending lawsuit or claim, the Asset Protection Planning opportunities are limited. Those clients with questions about Asset Protection Planning 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/15min

 

We help individuals and businesses with too much debt!

 

SubV Chapter 11 Bankruptcy Debt Limit

The SubV Chapter 11 Bankruptcy Debt Limit Historical Background:

Prior to passage of the Cares Act, the debt limit for SubV Chapter 11 cases was $2,725,625. With passage of the Cares Act, the debt limit was raised to  $7.5 million thru  June 21, 2024.   

If Congress does not otherwise amend or enact a new law, the debt limit will revert to $2,725,625 on June 21, 2024. 

Fortunately, a bill is pending in Congress that will extend or increase the debt limit to $7.5 million. This bill has the support of debtors, creditors, and bankruptcy attorneys. One might wonder why Congress does not enact a bill to permanently raise the debt limit to $7,500,000.

Clients or their advisors with questions about Sub V cases should contact Jim Shenwick

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/15min

We held individuals & businesses with too much debt!

How to Compromise an SBA Defaulted Loan that has been transferred to Treasury Offset Program (TOP)

 

How to Compromise an SBA Defaulted Loan that has been transferred to Treasury Offset Program (TOP)

 

In a prior blog post we discussed “How to Recall Defaulted SBA Loan from Treasury Offset Program TOP” which blog post can be found at https://shenwick.blogspot.com/2024/04/how-to-recall-defaulted-sba-loan-from.html

If you have a defaulted SBA loan that has been transferred to the Treasury Offset Program (TOP) and you are unable to recall the loan from TOP to the SBA, your options are: 1. Do nothing, 2. Close the business, 3. Negotiate a Compromise with TOP, or 4. File for bankruptcy and halt the TOP offset with the automatic stay provided by Section 362 of the Bankruptcy Code.

In this blog post we will discuss how to Compromise an SBA Defaulted Loan that has been transferred to TOP.

Please note that the forms required to be submitted to TOP to Compromise the claim are different from the offer in compromise forms submitted to the SBA for an offer in compromise.

Documents Required:

1  Provide a letter on your letterhead explaining the reasons for the default on the SBA loan, why it should be reduced or compromised, the original amount of the defaulted SBA loan, the proposed amount to compromise the defaulted SBA loan, the source of funds for this settlement, and a detailed explanation of the financial hardship involved for you or your business.

2  A Financial Statement for Business or Individual (which can be obtained online from TOP, Department of Treasury Compromise Forms) must be completed and submitted.

3   Submit the last 2 years of the Business or Individual tax returns.

4   The proposed payment should be a lump sum payment.

5   Submit 2 Months of  bank statements for the individual or the business &

6   Submit 2 utility bills for for the individual or the business.

Then  call TOP at 800-676-5737 to determine who the documents should be faxed or emailed to. 

Please note that compromising a claim with TOP is difficult to do!

For those clients or advisors who would like to discuss compromising their  SBA Defaulted Loan (that has been transferred to TOP)  with Jim Shenwick, Esq. please call Jim Shenwick, Esq  at 917 363 3391 or email him at  jshenwick@gmail.com

Or please click the link to schedule a telephone call with me.

https://calendly.com/james-shenwick/15min

We held individuals & businesses with too much debt!

---

How to Recall Defaulted SBA Loan from Treasury Offset Program TOP 

https://shenwick.blogspot.com/2024/04/how-to-recall-defaulted-sba-loan-from.html

Treasury Offset Program (TOP) and SBA EIDL Loans

https://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 Loans

https://shenwick.blogspot.com/2024/03/us-seeks-to-collect-on-up-to-20-billion.html

SBA EIDL Loan Charge Offs

https://shenwick.blogspot.com/2024/02/sba-eidl-loan-charge-offs.html

SBA EIDL LOANS & CIVIL & CRIMINAL PENALTIES & BANKRUPTCY FILINGS

https://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 Loans

https://shenwick.blogspot.com/2023/12/defaulted-sba-eidl-loans-in-reversal-us.html

SBA EIDL Loan Defaults and the Statute of Limitations 12-24-2023

https://shenwick.blogspot.com/2023/12/sba-eidl-loan-defaults-and-statute-of.html

SBA EIDL Penalties if an SBA EIDL Loan is Not Repaid

https://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 Filings

https://shenwick.blogspot.com/2023/08/misuse-or-misapply-sba-eidl-loan.html

SBA EIDL HARDSHIP PROGRAM

https://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 Code

https://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 COMPROMISE

https://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.html

EIDL Defaulted Loans

https://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 PROGRAM

https://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html

PPP & EIDL Fraud

https://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 Loans

https://shenwick.blogspot.com/2022/11/better-to-connect-what-small-business.html

 

How to Recall Defaulted SBA Loan from Treasury Offset Program TOP

 

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 see

EIDL 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.html

6. 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/15min

We 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 Loans

https://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 Loans

https://shenwick.blogspot.com/2024/03/us-seeks-to-collect-on-up-to-20-billion.html

SBA EIDL Loan Charge Offs

https://shenwick.blogspot.com/2024/02/sba-eidl-loan-charge-offs.html

SBA EIDL LOANS & CIVIL & CRIMINAL PENALTIES & BANKRUPTCY FILINGS

https://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 Loans

https://shenwick.blogspot.com/2023/12/defaulted-sba-eidl-loans-in-reversal-us.html

SBA EIDL Loan Defaults and the Statute of Limitations 12-24-2023

https://shenwick.blogspot.com/2023/12/sba-eidl-loan-defaults-and-statute-of.html

SBA EIDL Penalties if an SBA EIDL Loan is Not Repaid

https://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 Filings

https://shenwick.blogspot.com/2023/08/misuse-or-misapply-sba-eidl-loan.html

SBA EIDL HARDSHIP PROGRAM

https://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 Code

https://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 COMPROMISE

https://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.html

EIDL Defaulted Loans

https://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 PROGRAM

https://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.html

PPP & EIDL Fraud

https://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 Loans

https://shenwick.blogspot.com/2022/11/better-to-connect-what-small-business.html