No, unless the lawyer is experienced in handling SBA workouts, then you are hiring him for the right reason.
An SBA workout is based on your financial position and net worth, your income stream etc. what the collectability of the debt may be following the requirements of the SBA process. These are not legal issues, after all you did borrow the money and you do owe it back. There are typically no defenses other then you cannot pay, which is not a legal defense to my best knowledge.
There is little a lawyers expertise can add to help yo through the process other then unnecessary additional expenses, unless your hiring one to walk you through the paperwork and only if the lawyer has the SBA workout experience to be able to project the response they will have to your situation and the best strategy you should employ. There is seldom any direct face to face negotiation its all done with forms and one must know the game to play effectively. I do not believe a lawyers skills will help you navigate the situation more effectively.
If you are being sued by the banks lawyers you may need a legal response however this is a huge sign you are not following an effective strategy as this process will not work well for you at all. Remember you owe the money back.
Additionally when one adds a lawyer to the mix it requires a lawyer on the other end to respond so your workout is now interpreted through two lawyers before it gets to the party who must decide the issues.
Actually the more important person who is in a position to help you is the banker you borrowed the money from, keeping in mind the loan is guaranteed by the SBA but written and funded by the bank. The bankers opinion of you and how you are acting is important to the results. Better you should remain in contact with him/her and gain a favorable opinion then resort to council which adds additional separation from the real player who count.
Being supported and guided by a specialist with specific experience in handling SBA workouts is the best advice I can give you. Find some one with experience to help you and confront your lenders with honesty and a commitment to resolve this as best as you can and utilizing an SBA Offer in Settlement process you will achieve the best possible results. It is determining the best strategy and then the effective implementation of the strategy that counts.
Talk to someone who understands this and you will have made a better decision then merely going to a lawyer. It could be a lawyer if he/she has significant experience with the SBA as that is what you require, not general legal skills.
Do it before you are cleaned out, shut down and liquidated. Get in front of the train and workout the best possible conclusion.
Call me I would be delighted to help you better understand the process and the challenge to reach a successful workout conclusion.
Call for help 413-549-2966.
May 21, 2009 at 7:18 pm05
SBA loan for $275K. Closed business 6 months ago, notifed bank and hired an attorney at that time. We had pledged two pieces of property as collateral which we own outright and offered to turn over immediately to the bank, as well as all of the business equipment, hoping to come up with a reasonable repayment plan. We were told that there would be no litigation but learned that due to our attorney’s failure to communicate timely with the bank and its attorneys, we received a complaint demanding foreclosure on the properties and payment of the debt. After some discussion, a forebearance agreement was in the works, but we were again told by the bank this week that our attorney was not communicating and today we received notice to appear at a hearing with the Master in Equities. We are frustrated as we have, for the past 6 months, only wanted to turnover the collateral and figure out a reasonable repayment plan, but now the attroneys seem to mucking things up. Is it too late to fix this? Where does the SBA offer in compromise fit into all of this?
April 14, 2009 at 7:18 pm04
I unfortunately defaulted on my SBA 504 loan back in 2006. The liquadation auction for the equipment paid off the first part of the loan and left a balance of about 550K. My property appraisel was 625K. At the auction for the property only one person showed up on the court house steps. The SBA started the bid at 200K the sole person countered with 225K and the SBA took it!!! Now they are after me for the remaining balance. Do I have recourse? They chose to bid that low and now they want me to pay 400k. Lawyers are all pushing me to file bankruptcy… your thoughts?
April 16, 2009 at 7:18 am04
There is definately an alternative, why not do an offer in compromise and reduce the debt to affordable losses.
call norm and he will arrange a no obligation tele conference.
413-584-2581
March 31, 2009 at 7:18 pm03
I have a SBA loan for 400,000, I have a 50,000 CD(which would make the loan 350,000) in the bank for colateral. Plus My house which is worth about 500,000 but I owe 220,000, Can the bank take my home if I default on the loan? or will they be willing to work somthing out?
March 31, 2009 at 7:18 pm03
Yes they can and will take your house if you do not do something about it. However working it out is more then just a discussion, it takes lots more then a negotiation…You have a problem, please feel free to call Norm at 413-549-2966 and arrange a tele-conference to discus your options and a strategy that will work.
March 29, 2009 at 7:18 pm03
My business is doing well and payments are
timely. So what is the problem? My commercial real estate property(pledged
collateral) is a cash flow monster- to the
tune of $10,000/month. Until the real estate
bubble burst and prior to SBA bank approval,
a major home builder was purchasing my
acreage regularly and was “committed” to
continuing the drawdown. Due to the market
downturn they are now no longer purchasing.
My CPA advised me that within the next 6
months my business capital will begin to erode if my sales are not taken to a new level. If not, my monthly land debt service
could make it more and more difficult to
remain current with my SBA loan.
I purchased the real estate for 1.5mil and
I owe 700k. With great credit no bank is
willing to refinance the property. The
original note was totally owner financed
with no personal guarantee,30 year amortiza-
tion @6.5% with 5 year balloon(19 months left). With the current Forida market cli-
mate,I can’t give the property away.
Will the bank allow me to give the real
estate back to the owner? This will do won-
ders for my cashflow and ensure timely
payment to the bank.Would it take an act of
congress for the bank to relinquish the collateral?
Thanks,
Robert
March 29, 2009 at 7:18 pm03
I need more detail, however there is clearly a plan that will work wonders for you, however it is not as you describe. What you are asking will not happen, but other strategies will. You should call me at 413-549-2966 to arrange a tele-conference call for us to discuss your options an d a different strategy.
May 21, 2009 at 7:18 pm05
You can always resolve such issues, but not the way your going…call Norm at 413-584-2581, we will arrange a no obligation tele conference to dicuss your options.
March 4, 2009 at 7:18 pm03
As an update – apparently the bank approved our offer. It was a $15,000 payoff on a $100,000 loan. The bank apparently sent the approval to SBA and SBA waited 7 months, then said “no”. I was excited to learn that the bank approved our offer however. In your article you mentioned something about half the battle being – getting the bank on your side. Do we have some new leverage now that they accepted it? Can we work that a little?
March 3, 2009 at 7:18 pm03
Ive been sitting here for over 14 months waiting for SBA to respond to our offer. This loan was actually discharged in a personal bankruptcy which evaluated my only source of income – my business. I own my own business and am the only employee. So based on the means test, I already was discharged from this debt, but SBA is using the loophole that the business is a separate entity so they’re going after the business. Their erroneous assumption is that the business has another source of income. The fact is California courts deemed me unable to pay this debt already and discharged it. I am my business. Despite this, I have wasted the last year and a half waiting for them to respond. They rejected my offer once, in the last year and a half, and then go silent for the rest of the time. They don’t communicate. There is no back and forth. They ask for our financials, we provide them, showing major problems, and they go silent and say nothing. For 7 months at a time they dont even respond. Simply do nothing for 7 months and then say “no”. its like throwing a note over a wall and waiting a half a year to have it ripped up and thrown back. All the while we’re accuring interest at $1000 a month. We were first with a collection company who sold the account to another collection company. The first guy at least made me an offer, to decrease the interest, etc. The current 8 months of waiting has resulted in zero communication. We just sit week after week and wait. What the heck are we supposed to do without any communication? Why are they trying to bleed water from a discharged debt?
March 4, 2009 at 7:18 am03
I appreciate your frustration and understand your angst, it makes little sense, however it is what it is. You have no choice. Wait and respond.
February 26, 2009 at 7:18 pm02
Ihave a extreme issue that I would like to speak with you about. I tried to call but your voicemail is full.
February 26, 2009 at 7:18 pm02
please call my office I would be delighted to help you as best I can. sorry about my voice mail, I get hundreds of calls per day and cannot keep up.
413-549-2966…office number. ask Norm for a tele-conference.
December 10, 2008 at 7:18 pm12
Don,
I owe about $85k on an SBA loan. I am settling on the sale of businesses equipment on Saturday. My house is listed as collateral on a 2nd mortgage, but the house is now only worth about what I owe on the 1st. The sale of my equipment is only going to get me about $20k. Do you think I am in a decent negotiating position or will the bank go after the house?
December 10, 2008 at 7:18 pm12
There is allot that can be done even at this late date, call my office you may be making serious errors. Its not about negotiating it is about properly handling the workout in view of the regs and rules…Its clear you need some direction, give Norm a call at my office 413-549-2966 he will arrange a teleconference for us to discuss some options.
Don
December 9, 2008 at 7:18 pm12
[...] Do you need a lawyer for an SBA workout? [...]
November 20, 2008 at 7:18 am11
Forget the lawyer, you are wasting your money, its extremely difficult to win this type of suit and will cost you a fortune…there are far better ways to win…Maybe a pre-emptive workout, reducing debt significantly…
call, lets talk. 413-549-2966, ask for Norm, he will arrange a no0obligation teleconference to discuss your options.
don
November 19, 2008 at 7:18 pm11
Don, If an SBA 7A Loan Authorization specifically states a certain amount for working capital and they required us use it for construction overages and now refuse to give additional funds should I get an atty to reveiw this situation because we have had no injection from the bank at all and they are not responding to my request.
September 19, 2008 at 7:18 pm09
If your numbers are correct yiou have some exposure here, and may want to see if you can refinance the equity and pay off the SBA as little as you can biorrow, I bet the real estate is worth less then you think, and you can only borrow 80% of the equity, so try an offer in settlement along these lines and it may work out better then you think. If you want more detail call me 413-687-8388
September 18, 2008 at 7:18 pm09
The business I own is not dead–yet, but it appears we are circling the drain with a few months before we go down. Fortunately 98% of my assets are in retirement monies. However, the SBA has a second mortgage on my house. It’s worth around $335,000 minus the first mortgage of $165,000 (net equity $170,000). What is the likely outcome of my likely default?
July 21, 2008 at 7:18 pm07
I was good that you sold it howevr that was the moment to negoiate a resolution with the SBA with an offer in settlement. At ths point they have every right to the proceeds of the note you are holding and no you shoud not sell everything to pay them off.
You are still entitled to make an offer in setlemnt, howevr I can not advise you on this aspect without additional information.
Call me to discus…413-687-8388
don todrin
July 21, 2008 at 7:18 pm07
Rather than close our business we sold it. We are carrying back the sale price and the new owner is making monthly payments. Unfortunately the sale price did not cover our SBA loan which we are behind on. We have tried negotiating a payment plan with the banker however he refuses to accept any reduced payment and insists he be paid the monthly payment we are receiving from the new owner. The banker is also threating to get a lawyer involved and suggests we sell our house and any worthy assets as well in order to pay our SBA loan. How can we negotiate some kind of SBA workout plan?
July 18, 2008 at 7:18 am07
your lawyer is guessing as he clearly has not done this before, there are many ways to resolve a successful SBA workout, give me a call and i would be delighted to evaluate your situation and provide you with a likely best case strategy that fists your parameters.
don 413-687-8388
July 17, 2008 at 7:18 pm07
What would be the best strategies to work out SBA loan of a failing business? My lawyer said that normally the lender do not negotiate SBA loan because they are backed by SBA so they have nothing to loose. I was planning to close down the business and hand in the keys to the lender with colleteral? Do you think if I do this then they will try to negotiate? Please help me. May God bless your heart for the wonderful information. Thank you.
June 24, 2008 at 7:18 pm06
If my lender issues 1099-C for my S-Corporation’s debt forgived. Will I be liable for the taxes if the business has real property? Please let me know. Thank you.
March 4, 2009 at 7:18 pm03
the issue is one of solvency…if your debts are greater then your assets at the time the forgiveness is granted then you avoid the 1099 conversion of debt forgiveness to ordinary income…
do not forget to appraise your home at liquidation value.