Charge Off of SBA EIDL Loans

Many clients who have defaulted on SBA loans receive a letter from the SBA indicating that their loan has been charged off. They ask us if this means the loan has been forgiven and does not need to be paid back.

“Charging off” is an accounting concept that  allows the SBA to remove the loan from its books and records  as an asset, but the SBA can still try to collect the debt.

Simply stated, charging off or charged off does not mean that a loan is forgiven!

Even though the loan is charged off, the borrower still owes the money and the SBA can continue collection efforts.

Collection methods include lawsuits, foreclosure on assets, garnishing wages, reporting the default to Treasury Direct (so that the Government can seize tax refunds) and reporting the default to credit bureaus. 

So in summary, a charge off is an accounting procedure but does not relieve the borrower of repayment responsibility. 

The SBA treats the charge off as a default and it will pursue further collection even after charge off.

Clients or their advisors with questions about defaulted SBA loans should contact Jim Shenwick, Esq.  917 363 3391  jshenwick@gmail.com

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!

Can I Get a Personal Loan After Bankruptcy? Marketwatch

MarketWatch offers a helpful article on obtaining credit after filing for personal bankruptcy. The article can be found at  https://www.marketwatch.com/guides/personal-loans/personal-loan-after-bankruptcy/

In our experience, representing hundreds of individuals who have filed for personal bankruptcy, clients are generally able to obtain loans or credit 1.5 to 2 years after receiving their Bankruptcy Discharge.
After a bankruptcy filing, we advise clients to save as much money as possible, obtain a secured credit card, and lease a reasonably priced car.

The goal is to demonstrate responsible credit usage, which will then enable you to obtain credit.

Jim Shenwick, Esq  917 363 3391  jshenwick@gmail.com 

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

 https://calendly.com/james-shenwick/15min
We held individuals & businesses with too much debt! 

SBA EIDL Loan Charge Offs

The debanked website is reporting that Covid SBA EIDL loan charge offs increased by $52 Billion in 2023.   

Those charge offs equal 17.2% of the unpaid principal balance of SBA outstanding EIDL loans. 

The story can be found at https://debanked.com/2024/02/covid-eidl-charge-offs-explode-increase-by-more-than-51-billion-in-fy-2023/

This report is unsurprising, as a rough estimate indicates that 75 to 80% of our clients have defaulted or are considering defaulting on their SBA EIDL loans.

SBA EIDL loan defaults raise Debtor/Creditor, Bankruptcy, Tax and Personal guaranty issues. 

SBA EIDL loan defaults are also reported to Treasury Direct (IRS) and a 30% penalty is added to the balance due.

The worst action a borrower in default on an SBA loan can take is to ignore the situation.

As one famous lawyer said, prayer is not a legal strategy!

At Shenwick & Associates, we have developed techniques & strategies to minimize tax and debtor/creditor issues involving an SBA EIDL default.

To speak to Jim Shenwick, Esq about an SBA EIDL loan default you can call him at 917-363-3391 or email him at jshenwick@gmail.com

Please click the link to schedule a telephone call with Jim

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

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James Shenwick, Esq SBA EIDL Blog Posts:

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

Credit card debt increases by $50B to new record high

 The Hill is reporting that credit card debt in the United States increased by $50 billion in the fourth quarter of 2023, according to recent findings from the New York Federal Reserve. 

Will this increase in credit card debt result in more personal bankruptcy filings?
The story can be found at https://thehill.com/business/4451222-credit-card-debt-increased-by-50b-new-record-high/

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!

Chapter 11 Bankruptcy Filings Increase 22% Y/Y in January, Subchapter V Filings Up 43% according to monitordaily.com

 

Chapter 11 Bankruptcy Filings Increase 22% Y/Y in January, Subchapter V Filings Up 43%
https://www.monitordaily.com/news-posts/chapter-11-bankruptcy-filings-increase-22-y-y-in-january-subchapter-v-filings-up-43/

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!