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When a business is ready to close, there are three main ways to deal with an SBA EIDL debt: an offer-in-compromise (see below), stringently following the SBA's guidelines for business liquidation & dissolution, or bankruptcy (business or personal).
Luckily, you can "discharge" or eliminate your obligation to pay back an SBA loan by filing for bankruptcy. But remember that if you pledged assets as collateral, you will lose them if you don't pay as agreed.
Are SBA Loan Debts Dischargeable in Chapter 7 Bankruptcy? The short answer to this commonly-asked question is – generally, yes. But, there are significant risks that SBA business owners, SBA guarantors and SBA obligors should be aware of before making the final decision of filing for a Chapter 7 bankruptcy to discharge an SBA guaranteed loan.
Is an SBA loan dischargeable? In most circumstances, it may be discharged in bankruptcy. Learn about SBA loans in the blog by the Law Office of Seni Popat, P.C.
If you are considering bankruptcy to discharge your SBA loan debt, it is essential to consult with an experienced bankruptcy attorney. A knowledgeable attorney can evaluate your unique situation, provide guidance on your options, and help you navigate the complex bankruptcy process.
The question of whether an SBA loan can be discharged in bankruptcy depends on several factors, including whether you pledged collateral to take out the loan.
You can get a business loan after filing for bankruptcy, but — at least in the years immediately following bankruptcy — it won’t be easy: Your financing options will be limited and your...
If you want to learn more about SBA loans, defaulting, and bankruptcy, read on. Find out everything that happens when you default on an SBA loan and when you file for a bankruptcy. What is an SBA Loan? SBA Loan Collateral. An SBA loan is a loan for small businesses, a partial amount of which has a guarantee by the US Small Business Administration.
SBA loans CAN be discharged in bankruptcy. However, if you were to default on the loan and do nothing, the lender can take legal steps to recover the money you owe. More than likely, the lender can garnish your wages, sue you, and place a lien on your property.
Understanding how SBA loans fit into the bankruptcy puzzle is crucial. Chapter 7 and Chapter 13 bankruptcy offer different routes for wrangling debt, but here’s the plot twist: both journeys raise questions about shedding debts owed to the Small Business Administration (SBA).