“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
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We held individuals & businesses with too much debt!
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