The Aftermath of Defaulting on SBA Loans.
It reaches a point in life when you find the need for a quick loan. The loan comes in handy at a time when a medical emergency faces you or when you want to pay your landlord rent to avoid forceful eviction. Because of the financial constraints at the time, you happen to look for a loan that will suit your needs. After doing some window shopping here and there, you settle for the SBA loan that has highly accommodating interest rates.
In as much as you feel proud of accessing a given loan, you are always in a constant fear of repaying the lender in the set time. Time elapses and you find yourself to have defaulted. Below is an extract of what will happen to you if you default on the SBA loan. Since it is the Federal Government that gives SBA loans, it becomes the duty of both the bank that gave you the loan as well as the national government to pursue you using all avenues at their disposal.
When you default, the lender which is usually a bank directly contacts you via direct mail or through a phone call. If you get contacted by the bank but fail to respond, the bank moves swiftly to recover its money from you using the provisions outlined in the SBA loan agreement. In such an agreement, the law compels you as the borrower to sell any item you put as collateral, to raise enough funds to repay the loan.
Lawyers Tips for The Average Joe
It is after you fail to honor the rights in the SBA loan agreement that the lender tries to get hold of some of your assets. When you default, you are not only compelled to repay the loan in full but also settle any other additional expenses that might have come about.
Finding Ways To Keep Up With Funds
The IRS comes to the assistance of the bank when you fail to meet any of the above demands. Usually, you get an Offer in Compromise with the lender and in the presence of an advocate to come with an -pay-after plan. Before the Offer in Compromise can take effect, the IRS determines your financial worth to ascertain as to whether or not you fit the bill. Based on the type of arrangement, the IRS pays the lender on your behalf. When the SBA lender rejects your Offer in Compromise request, the only option you get left with is to use the United States Treasury Department as leverage.
If you decide not to repay a loan, be willing to lose a lot financially. As a piece of advice, only take a loan when you are a hundred percent sure that you will be able to settle the bank debt in a timely manner.