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!
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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
