SBA loan default attorneys

Facing and SBA Loan Default? Bankruptcy is not the only option. Learn more about the SBA debt forgiveness.

SBA Lien Release

Many debtors file bankruptcy only to find out that while their SBA loan debt was discharged, the SBA lien on their homestead (pledged as collateral for the loan) was not. What to do?

SBA Statute of Limitations on Foreclosure

You may be surprised to learn that the SBA does not always urge foreclosure even when the SBA lender has the right to do so. In many cases, an SBA lien can remain on real estate for years without any action being taken to foreclose.

However, you may also be surprised to learn that under federal law there is no statute of limitations applicable to the SBA that would bar a foreclosure action – even 20 years later!

Is Foreclosure Inevitable?

Surprisingly, no. Frequently, the SBA may just let the property sit and take no action to foreclose; this may be because there is very little equity in the property. In other cases, it may just be easier for the SBA to conserve its resources and wait until you need to sell or refinance your property. In fact, most debtors first learn that the SBA lien on their home survived bankruptcy when they later attempt to sell or refinance their home.

What Should I Offer?

The answer will depend on many factors, but principally on how much equity is in your home and whether the SBA lien is sitting in second or third position behind other mortgages making a recovery from foreclosure unlikely. However, negotiating a settlement is possible, but you should be prepared to offer at least 70% or more of the equity in your property to get the lien removed. In some cases, the payments may be taken over time, but in the vast majority of cases, a lump sum payment is the norm.

Have a Question?

Perliski Law Group SBA Loan Defaults

The Perliski Law Group is dedicated to helping small business owners survive the closure of their business and the resulting financial damage caused by an SBA loan default. During your free initial consultation, we will explain how the SBA collection process works and outline the SBA debt relief and SBA loan forgiveness options that may be available to you.

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Helpful Articles

Can I Discharge my Defaulted SBA Loan in Bankruptcy?

Question. Can I Discharge my Defaulted SBA Loan in Bankruptcy? Answer: With the exception of student loans, most government loans including SBA loans are routinely discharged in bankruptcy. Surprisingly, many debtors still believe that government loans cannot be...

Are shareholders liable for a default on an SBA loan?

If you are an investor in a company funded by a Small Business Administration ("SBA") loan, then you may wondering whether you are liable for the company debt should the business fail. The Borrower is principally responsible for repayment of the underlying promissory...

Release From Your Personal Guarantee on an SBA Loan

Owners with at least least a 20% stake in an SBA loan financed business will be required to execute a personal guarantee. This means that, as an owner, you are promising to pay the SBA lender and/or the government in the event the Borrower (your business) defaults and...

What is the SBA Disaster Loan Forgiveness Program?

If you currently have an SBA Loan and you live in an area affected by a natural disaster, you may be entitled to relief. Hurricane, flood, wildfires, droughts, avalanches, landslides and earthquakes are just a few examples of the natural disasters that can cause the...

“We highly recommend the Perliski Law Group! They worked diligently with us to create an offer in compromise that was accepted by the SBA and the lender. Fair price and very responsive to all our questions and concerns. We couldn’t have asked for more.”

Jim H.