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!

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

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https://shenwick.blogspot.com/2023/05/offers-in-compromise-oic-for-defaulted.html

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