A Closer Look at SBA Wage Garnishment: How Can Lawscape Help?

Let’s cut through all the legal jargon and talk straight for a moment. You’ve taken out an SBA loan to fuel your entrepreneurial dreams, but things haven’t quite gone according to plan. Your business misfortunes have led to loan default, and now you’ve got the U.S. Small Business Administration (SBA) sniffing around your paycheck.

About the SBA and SBA Loans

Essentially, the SBA is a tremendous catalyst in getting budding entrepreneurs to step out on a limb and open their businesses. Unfortunately, around 1 in 6 of those business owners end up defaulting on their SBA loans, leading to increased pressure from the SBA to recoup their losses.

Now, here’s something not everyone’s aware of: SBA loans aren’t directly given out by the SBA. They’re actually issued by independent lenders, but the SBA guarantees up to 85% of the loan. That leaves you working with these lenders first if things go awry. Think of the SBA as a well-dressed co-signer who’s none too pleased when things don’t go according to plan.

Struggling with Payments?

If you start missing payments, take immediate action. You usually get a ten-day grace period when you’re late on a payment – but don’t push your luck. Engage in open conversations with your lender about restructuring your repayment plan. Trust me when I say they’d rather get their money back slower than not getting their money back at all.

Consequences of an SBA Loan Default

If the situation with your lender can’t be resolved, the case escalates to the SBA’s court. They commence their collection efforts – and let me tell you – they’re persistent. You’ll get a 60-Day Official Notice with an opportunity to clear your default through various means. Should that fail, your case file is passed on to the Department of Treasury’s Bureau of Fiscal Service, which can ramp up the collection stakes sky high.

Understanding Wage Garnishment

When it comes to collections, wage garnishment is a bitter pill to swallow. Unlike credit card companies, the government doesn’t need to haul you to court to garnish your wages. A Notice of Administrative Wage Garnishment is your red flag. The SBA can swoop in and collect up to 15% of your takeaway pay– what’s left after deductions and taxes.

On the other hand, if your lender decides to go down the wage garnishment path, they have to first win a judgment against you. After that, they’re legally entitled to collect up to 25% of your wages.

Putting a Stop to Wage Garnishment

If you’re facing wage garnishment, all hope isn’t lost – you’ve still got a few aces up your sleeve. First things first, pull out your lifeline and get professional help where needed. Lawscape and the Lawscape have plenty of experience wrangling with the SBA and helping clients like you navigate these tough waters.

Lawscape can push for a hearing before your wages are touched and help set up an affordable repayment plan that doesn’t involve bothering your employer. And if you’re at the end of your financial rope? Bankruptcy could be an option – either to forgive your debts or restructure them.

Why Pick The Lawscape?

Dealing with repayments can be a nerve-wracking experience, but Lawscape and the Lawscape have been in the trenches before. They’ve successfully helped clients handle SBA and Treasury debts, negotiated repayment agreements, and navigated the red tape of hearings, disputes, and collections.

Warding Off SBA Loan Trouble

When SBA loan trouble starts knocking, there’s no need to answer that door alone. Remember, it’s best to tap into the expertise of professionals like Lawscape and the Lawscape who can guide you through the repayment and collection process, helping you get back on solid financial footing.

Does that sound like a hand you could use right about now? Contact us today to see how we can help you navigate your SBA trouble waters.