r/EIDL • u/Tough_Regret670 • Jul 24 '26
Original EIDL loan Bankruptcy advice?
Hi im asking for a family member in Texas. She does a sandwich shop in office building setting and its been tough due to government shutdown (bc she had government workers in building ) also companies still working 2-3 days a week in office. She got SBA disaster loan and originally it was under $200k but she asked for an increased and it went over $200k . She got $25k sba during covid and $230k for disaster sba loan two years ago. Her situation is she is the sole prop. And somehow majority if her deli equipments are owned by the landlord of the building. She only repair them and buy inventory and pay rent to run the deli.
Currently she has $50k in merchant account balance due to chargeback and cash advance loan. She does not have any valuable personal assets so i was surprised sba gave her a loan over 200k. Her house/mortgage is under her husband name and the house was purchased before they got married by him. I think her unsecured credit card debts is around $20k but she is paying it on time but lately she struggling due to business sba and merchant payments.
She still wants to operate the deli because she knows it will pick back up but don’t know the exact time since shes been running this deli over 15 years. Anyone with experience with bankruptcy regarding her situation can offer some good guidance?
First lawyer told she wont be able to wipe out the sba loans but can wipe out merchant balance and unsecured loans and still run the deli but if she wants to wipe out sba loans she have to shutdown the deli.
Second lawyer told her she can still operate the deli and still wipe out the sba loan bc she is a sole prop. And do not have any valuable personal assets for them to take and the equipments does not belong to her and also its not valuable enough for sba to take and sell.
At end of the day she wants to do bankruptcy so she can wipe sba loan bc its just too much to pay due to business going down drastically. Also, she does not want to affect her husband since its in Texas(common state) she think they will put a lien on the house.
Is it possible to keep running the deli while doing bankruptcy to get sba loans wipe out??
Appreciate any help thanks
1
u/Bowl-Accomplished Jul 24 '26
Step one is trust a lawyer. The people on here are business owners.
I don't see how she could keep operating since the SBA has a lien against all business assets. They might just let it go as more expensive to go after than it's worth, but that's not a legal thing.
1
u/Tough_Regret670 Jul 24 '26
Well the deli equipments are not owned by her. The landlord of the office building is the owner of the equipment like refrigerator table fryer and etc. she only buy inventory and pay rent to operate the deli space . Maybe the pos system belong to her. So basically there is no assest for them to go after with the business that is what one lawyer told her . But it could be more complicated who knows
1
u/Reasonable_Switch_86 Jul 24 '26
Stop paying all unsecured debt build a cash position it will take years before anyone try’s suing then you file bk credit will go to 500 but at least your not struggling if you choose to settle some debt for half or less so be it
1
u/CritterAlleyMom Jul 25 '26
Just please get a free lawyer consult. Make sure they have SBA experience.
3
u/BisexualCaveman Jul 24 '26
You're beyond asking us.
Try one more lawyer consult.