HomeSBA Loan Default: You Pledged Your Personal Residence, Now What?

SBA Loan Default: You Pledged Your Personal Residence, Now What?

We Reduce Business Debt

Lawscape is dedicated to helping business owners successfully resolve their business debt without headaches, or long term consequences.

We Provide Nationwide Business Debt Relief

Lawscape provides nationwide business debt relief services. We work a wide array of lenders, service providers, and types of business debt. We are able to restructure and reduce, all types of secured and unsecured business debt. 

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Our team has experience handling 10’s of millions in debt, ranging from SBA debt, to Merchant Cash Advance and more. 

All Types Of Debt

Regardless of the type of business debt you have, we can help. We have experience handling all types of secured and unsecured business debt. 


Our company is led by experienced business debt relief experts who have experience handling secured and unsecured debt nationwide. 

Failing To Repay Business Debt Isn’t The End

Many business owners think failing to repay business debt means: your business is over.

This simply isn’t true. Business debt is a problem which CAN be handled, just like everything else; but only if you take pro-active steps. Lawscape helps you understand the law, and works with you to make sure that business debt isn’t the end of your business. 

What Are Some Ways We Can Help With Business Debt Relief?

Our experienced business debt relief consultants are here to help you through this stressful time. 

Handling SBA Loan Defaults: Pledged Personal Residences and Ensuing Challenges

SBA Loan Default Concerns? We’ve Got Your Back!

So, feeling a tad bit uneasy about a potential SBA loan default? Before you hit the panic button, I’d like you to know that my team and I at Lawscape are here to help navigate these treacherous waters. We will rummage through your SBA loan concerns, lay them out to you in layman’s terms, and recommend suitable solutions, one of which could be an SBA offer in compromise.

This loan default behemoth should not be tackled solo – having a seasoned attorney by your side through this ordeal is crucial. So, consider this an open invitation from us at Lawscape for a chat about your predicament.

Risks Involved When Pledging Personal Residences as Collateral

Let’s say you pledge your home as collateral for an SBA loan. This isn’t as uncommon as you’d think; many borrowers do. But what happens when a loan default happens? In compliance with the SBA standard operating procedures, the collateral, in this case, your home, has to be liquidated to retrieve the loan amount in the quickest time feasible. We are talking potential foreclosure – the same outcome that ensues if you halt your mortgage payments.

The SBA’s Olive Branch in the Form of Relief Options

But here’s the good news: SBA guidelines do throw borrowers a lifeline. What course does this lifeline take? Let’s consider a scenario in which your personal residence is your lone valuable asset, and there’s no other recovery avenue. The SBA could release the lien for consideration. The prerequisite here is the earnest effort to raise not only a sum equal to the home’s Recoverable Value for relinquishing the lien but also an extra amount ample enough to compromise the borrower’s remaining liability. Therefore, there’s a chance for you to buy out the lien, and the SBA is obliged to negotiate in an honest-to-goodness manner.

Prioritizing Compromise Offers Post Collateral Liquidation

As per SBA rules, a compromise offer should be sought from each borrower once it’s clear that there’ll be a deficiency after collateral has been liquidated. However, there are a few conditions to be met:

• No legal defenses such as bankruptcy discharge or the statute of limitations should bar deficiency’s collection.
• The borrower hasn’t indulged in fraudulent practices, misrepresentation, or financial misconduct.
• The borrower either refuses to pay the deficiency in full, finds it impossible to pay within a sensible timeframe, or cannot have the full amount recovered through affordable enforced collection proceedings within a sensible timeframe.

Here’s an example to better illustrate this point. If you owe $200,000 on your loan, the worth of your house is $100,000, you have an $80,000 mortgage, and the SBA is the second lien holder – you can release your home for $20,000 and negotiate the outstanding $180,000 based on your payment capability. Though having your house as collateral isn’t ideal, exploring alternatives can be beneficial.

Seeking Guidance on SBA Loan Defaults? We are a Call Away!

So, how about a little tête-à-tête about your SBA loan default? Reach out to us at 1-212-460-5004 or complete the form below. Rest assured, a qualified attorney from Lawscape will get in touch with you.

Why Should You Entrust Us With Your SBA or Treasury Debt Concerns?

Impressive Record of SBA Debts Resolution

Clients of Lawscape have seen millions of dollars in SBA debts resolved via offer in compromise and negotiated repayment agreements without filing for bankruptcy or facing home foreclosure.

Thorough Defense Against Treasury Debts

We have successfully contested millions of dollars in Treasury debts through AWG Hearings, Treasury Offset Program resolutions, Cross-servicing disputes, Private Collection Agency representation, Compromise Offers, and Negotiated Repayment Agreements.

SBA, Treasury Department, and Bureau of Fiscal Service Authorization

Due to our authorization under the Agency Practice Act, we are equipped to represent Federal Debtors nationwide before the SBA, the SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.

Lawscape Can Help You Manage Your Business Debt

If you’re struggling with business debt, we can help you understand your situation. During the initial consultation, we’ll go over the contract, and other legal documents you signed. After that, our firm will work with you to get a better understanding of your situation, and help you come up with a game plan that keeps your business alive. 

We Handle It All


Merchant Cash Advance


SBA Debt Relief


Secured Business Debt


Unsecured Business Debt

Everyone has different types of business debt. What matters is that you take it seriously. Regardless of whether it’s secured, or unsecured, you need to work with a firm that understands how to negotiate, reduce, settle, and manage, this business debt. 

Discuss your situation today

We are here to help you, and want nothing more than to help you save your business. Speak to our business debt relief specialists today.

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