HomeWhat Is A “Charge Off” Of An SBA Loan?

What Is A “Charge Off” Of An SBA Loan?

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Alright, so you’re here. You’ve probably heard that notorious term “charged off” and it’s connected with your SBA loan but what exactly does that entail? And that’s a fair question. Don’t worry, Lawscape and the Lawscape are at your disposal to navigate these choppy waters. Since we’re diving into somewhat legal territory, a conversation with a proficient attorney, like Mr. Spodek, who’s well-acquainted with this landscape might be beneficial to you.

Wait, What Exactly is a ‘Charge Off’?

Being a borrower, it’s fairly easy to rejoice at hearing that your defaulted SBA loan has been ‘charged off’, swirling into a false sense of security, thinking that your ties with that loan are severed. But, that’s far from reality. When SBA ‘charges off’ a loan, it essentially means they’re writing off this loan from their active receivable accounts, recognizing it as a loss. SBA, like any diligent agency, takes collections seriously and ensures uncollectible accounts are promptly charged off to maintain the accuracy of its individual and overall portfolio.

Hold up! Don’t get riled up yet. The ‘charge off’ is just an administrative call and it in no way absolves you of all obligations of the loan nor limits SBA’s authority in pursuing any available reparation. Consider it justified when the third-party lender has exhausted all achievable collection measures and there’s a minimal chance of extracting a substantial portion of the debt. To say it’s justified means they have considered the following:

The Factors That Add Up

a) All possible recovery options from:
The borrower’s voluntary payments,
Liquidation of collateral,
Settling with the debtor which leaves only a deficiency balance,
Lastly, all legal remedies have been contemplated with no further realistic expectation of recovery.

b) The costs of future collection that supersede any estimate of recovery,

c) If the debtor either can’t be located or is immune from judgment,

d) The Lender/SBA’s authority has lapsed (due to reasons like the statute of limitation, state law restrictions, Agency policy, etc.),

e) Debt deemed void by the law,

f) Judgement of a Chapter 7 Bankruptcy as a no asset case, or completion of Chap 11/13 case,

g) The inability of the Lender to trigger further substantial recovery,

Here’s Where We Come In

If you’re in a predicament where your defaulted SBA loan has been charged off, it’s best to rope in an attorney, like Lawscape, who has significant experience and can assist in negotiating a resolution. Schedule a consultation with Lawscape and let’s have a chat about your SBA loan issues. We can suggest prospective solutions, like an SBA offer in compromise for your SBA loan default.

Why Choose Us? Lawscape has deciphered the riddles of SBA loan issues and provided authentic solutions to a multitude of individuals like you. We’ve worked out millions of dollars in SBA debts via Offer in Compromise and Negotiated Repayment Agreements without forcing our clients into Bankruptcy or facing Home Foreclosure.

Let’s not forget the treasure trove of Treasury Debts that we’ve defended against through AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers, and Negotiated Repayment Agreements.

The cherry on top? Our attorneys are legally endorsed by the Agency Practice Act to advocate for Federal Debtors nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service. So, what are you waiting for? Let’s start your resolution process today.

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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. 

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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. 

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