The Inside Scoop on SBA Loan Defaults and U.S. Treasury’s Tactics

Now, this may seem like an Oddball scenario, but a little-known law might lead to smaller federal benefits and entitlement checks for tons of Americans. They could be folks who’re still hanging onto a debt (like a defaulted SBA loan) more than a decade old, that Uncle Sam hasn’t forgotten.

The Usual Suspects – Credit Card Companies and Banks

Now, as you may be aware, various federal entitlement incomes – if we say Social Security benefits or military retirement monies, for example – are generally a no-touch zone for usual creditors. I’m talking about credit card companies and banks, folks who routinely lend money. On the other hand, the Federal Government, in its official capacity, can pretty much dip their hands in your pocket to recover debts via the Treasury Offset Program (TOP) , assuming you owe federal agencies like the SBA.

Collecting the Dues

At this moment, the Treasury Department is consistently withholding benefits of approximately 3.1 million Social Security recipients. Why? To recover defaulted loans – be it student, farm, or small business. Heck, even unpaid income taxes or healthcare fees owed by veterans. They’re parting from these debts little by little and apparently quite effectively.

Beat the Clock: The Six-Year Loophole

A quick history lesson. Until not too long ago, the Feds couldn’t recover most debts delinquent for more than 6 years, courtesy of the statute of limitations. However, a provision in the 2008 Farm Bill erased that time limitation – except for student loans.

The Treasure Hunt of the Treasury Department

In the grand scheme, this change should bring in over $6 billion to the existing $75 billion in delinquent debt that folks owe the government. That’s according to the Financial Management Service, who you might know as the Treasury’s debt-collecting henchmen. They’re seeing this legislation as a way to level the playing field. It allows them to keep collecting older debts, and predicts an additional $10 million per year in collections of delinquent federal non-tax debt. It’s almost as if they’re trying to trim down that ever-growing federal deficit, right?

Silver Linings

Of course, we can’t ignore the elephant in the room – that is, older Americans who are currently navigating through mortgage troubles, pension cuts, and skyrocketing medical costs. Times are tough, and this change is adding just another layer of complexity.

The Treasury’s Tactics

But let’s step back for a moment. Apparently, many folks are feeling the pinch – a Wall Street Journal analysis suggested that federal entitlement recipients are a mammoth proportion of people facing the Treasury’s debt recoveries. For years, their main “Treasury Offset Program” found success in withholding income-tax refunds. But with an aging population and growing unemployment, the landscape’s changed. Fast forward to 2008, we’re looking at roughly 10% of the $4.3 billion in debts that the Treasury Department collected from federal entitlement benefits. Crazy, right? This is a sharp rise from 1.6% in 2001, as confirmed by the Wall Street Journal.

The Battle

But here’s what sticks out like a sore thumb to me – this whole process is a complex maze for those contesting a claim. I mean, take Dr. Robert Steinberg’s struggle, for instance. He founded Scharffen Berger chocolates and spent over six years (and thousands of dollars in legal fees) contesting that he owed more than $28,000 to the Social Security Administration.

Dr. Steinberg received disability benefits while undergoing chemotherapy for lymphoma, a condition that ultimately notched him. He started sporadically working before co-founding the chocolate company, and much later, was told that he was overpaid in the 90s. The SSA then roped in the Treasury Department for the collection. Now, I’ll spare you the gritty details, but Dr. Steinberg finally had an administrative law judge rule in his favor, stating that he was “without fault.”

To circle back to Lawscape and his Lawscape, they believe you should not have to negotiate SBA debt on your own. They’re ready to extend a helping hand if you’re dealing with SBA loan defaults.

You’re Not Alone in Your SBA Debt

Remember, you’re entitled to professional representation if you’re struggling with circumstances involving an SBA loan default. That’s where the Lawscape jumps in – their attorneys are well-versed in handling SBA OIC and DOT compromise cases. Their aim? To help you settle any SBA debt or DOT problems once and for all! They’ve got a team of seasoned SBA workout attorneys and DOT practitioners who’ve assisted many federal debtors over the years. That means, with them on your side, you can finally put your SBA loan default or DOT debt problems to rest.

Have a chat with them at 212-460-5004 , or fill up the online Contact Form to arrange for a Case Evaluation.

The Guarantee

And why resort to the Lawscape, you ask? Well, for starters, they have a solid track record of resolving millions of dollars in SBA Debts through Offer in Compromise and Negotiated Repayment Agreements. And mind you, none of their clients had to file for bankruptcy or face home foreclosure. More so, they’ve defended millions of dollars Treasury Debts too!

Their attorneys are authorized by the Agency Practice Act to represent Federal Debtors nationwide – before the SBA, the SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service. That’s what I call big league!