How to Compromise an SBA Defaulted Loan that has been transferred to Treasury Offset Program (TOP)

How
to Compromise an SBA Defaulted Loan that has been transferred to Treasury
Offset Program (TOP)

In
a prior blog post we discussed “How to Recall Defaulted SBA Loan from Treasury
Offset Program TOP” which blog post can be found at https://shenwick.blogspot.com/2024/04/how-to-recall-defaulted-sba-loan-from.html

If
you have a defaulted SBA loan that has been transferred to the Treasury Offset
Program (TOP) and you are unable to recall the loan from TOP to the SBA, your
options are: 1. Do nothing, 2. Close the business, 3. Negotiate a Compromise
with TOP, or 4. File for bankruptcy and halt the TOP offset with the automatic
stay provided by Section 362 of the Bankruptcy Code.

In
this blog post we will discuss how to Compromise an SBA Defaulted Loan that has
been transferred to TOP.

Please
note that the forms required to be submitted to TOP to Compromise the claim are
different from the offer in compromise forms submitted to the SBA for an offer
in compromise.

Documents
Required:

1 
Provide a letter on your letterhead explaining the reasons for the default on
the SBA loan, why it should be reduced or compromised, the original amount of
the defaulted SBA loan, the proposed amount to compromise the defaulted SBA loan, the source of
funds for this settlement, and a detailed explanation of the financial hardship
involved for you or your business.

2 
A Financial Statement for Business or Individual (which can be obtained online
from TOP, Department of Treasury Compromise Forms) must be completed and
submitted.

3  
Submit the last 2 years of the Business or Individual tax returns.

4  
The proposed payment should be a lump sum payment.

5  
Submit 2 Months of  bank statements for the individual or the business
&

6  
Submit 2 utility bills for for the individual or the business.

Then 
call TOP at 800-676-5737 to determine who the documents should be faxed or
emailed to. 

Please
note that compromising a claim with TOP is difficult to do!

For
those clients or advisors who would like to discuss compromising their 
SBA Defaulted Loan (that has been transferred to TOP)  with Jim Shenwick, Esq. please call Jim
Shenwick, Esq  at 917 363 3391 or email him at  [email protected]

Or please
click the link to schedule a telephone call with me.

https://calendly.com/james-shenwick/15min

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