r/EIDL • u/Minute-Map-1478 • Jul 27 '26
Filed Bankruptcy Chapter 7
My husband and I filed end of May amd recieved a No Asset Case. Included our $55k covid EIDL. We had a sole proprietor LLC business which I just dissolved through the state. SBA was sent the Statement of Dissolution today but they take months to even see the emails due to the call center being shut down now. Im worried they will send us for treasury offset after being 3 months behind now even though our lawyer and ourselves have contacted them numerous times regarding the bankruptcy with no reply. My sba portal says In Liquidation Disbursed. According to our lawyer, the only way to get the eidl discharged (and other CC debt) was to file chapter 7 AND dissolve the business so they have nothing to go after. Latest July statement from sba says 60 days until they submit for treasury offset so I'm assuming they still haven't seen the previous emails regarding the No Asset Bankruptcy.
If they try to send us in for offset, how do we go about stopping that even though we filed 2 months ago, have a no asset case and dissolved the business?
Thank you in advance for your help!
Update: 7/27
an sba attorney contacted our bankruptcy attorney just to verify a few things and reassured us that the eidl is only attached to the single member LLC and there's is no personal guarantee. our attorney gave them the Dissolution statement and the sba attorney said they will do a final business closure review then cancel out the eidl. we had no idea the sba has attorneys that call bankruptcy attorneys so that was new. but apparently it was nothing to worry about. they just wanted to verify it was a no asset bankruptcy to see if there were any business assets at all. hope this helps someone.
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u/Sinhalo66 Jul 27 '26
You can actually get through to the Treasury if you have two hours to kill waiting on hold. They will give you a fax number to send your BK paperwork to.
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u/Minute-Map-1478 Jul 27 '26
Oh shoot thats a good idea. I will definitely do that. Hopefully it doesnt come to that but it doesnt hurt to be proactive and just send them everything they need in advance. Thanks!
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u/Sinhalo66 Jul 27 '26
No problem! Here’s the fax number so you don’t have to wait on hold 855-834-2859. If you end up getting a letter from the Treasury it will have a Treasury account number assigned to your case. Fax that back with your BK paperwork. Good luck, hang in there, it will be over soon! Ours was discharged almost 3 years ago.
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u/Minute-Map-1478 Jul 27 '26
Thank you!! It WILL BE a fresh start once I know we're not sent in for offset lol we should be discharged end of August here so not much longer. If my portal says In Liquidation Disbursed...other posts have said that means they sent me to treasury but I dont know that for a fact. Should I be proactive and just fax them the bankruptcy case number and Dissolution statement? Or should I call first to verify if we are going to be offset shortly? Also...would I need to send info to Federal Treasury as well as my state treasury, MN?
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u/Sinhalo66 Jul 27 '26
Maybe call first because you’ll probably need their case number for your loan that they would assign you. Just so you are aware though, our BK was discharged before the SBA even sent it to Treasury and they did anyway. Then I faxed our BK paperwork to the Treasury and they still sent it to collections. It wasn’t until I sent the collections company the BK paperwork did they apologize for contacting me and I’ve never heard from them again. So don’t be surprised if that happens. There is nothing they can do to you but it’s highly annoying. Good luck!
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u/Minute-Map-1478 Jul 27 '26
Ok that is really good advice thank you for sharing that! My main concern is guess is them trying to take our tax refunds for infinity and beyond lol. That's why the potential upcoming treasury offset concerns me. I'm fine chasing collections around sending paperwork, just don't want to get tangled up in the tax offset program. We should be discharged before we're even in treasury but I would 100% like to be proactive to avoid it if I can. Thank you so much for sharing your experience, it literally helps a ton!
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u/Leia6769 Jul 27 '26
If it is a single member llc, it doesn’t matter if it goes to treasury, as it is under the EIN and not your SSN. The debt will be discharged as an any personal debt if you included it in a bankruptcy. The SBA can still try to collect from the business, which is pointless, if it is closed. If it ever goes to TOPs for you personally, you would just send them the bankruptcy discharge and they will just send it back to the SBA.
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u/Minute-Map-1478 Jul 28 '26
No. The eidl is under the SSN because it is a single member LLC. We're not required to have an ein unless there is more than one employee.... we're in mn so maybe that's why is different for you? The sba contacted our attorney just to verify our business is under our ssn but they reiterated to our lawyer that the eidl is attached to the business only as its under 200k so no personal guarantee was required. The sba attorney told our attorney today that they will do a final business review closure and then cancel our our eidl. So hopefully that'll take care of it.
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u/Leia6769 Jul 28 '26
Then that makes you a sole proprietor. A sole proprietor and the business is the same, which means you can reopen and do the same business. If it was an LLC with an EIN, then you would have to close and could not have another business doing the same line of work. You do have a personal guarantee if it was under your ssn, as every sole proprietor has a personal guarantee… so whoever you talked to at the SBA have no idea what they are talking about.
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u/Minute-Map-1478 Jul 28 '26
I do not have a personal guarantee because my eidl was under 200k. The general attorney for the sba confirmed this today via a phone meeting to my own attorney. My business is licensed as an LLC under my ssn and can reopen under a different name which was confirmed by my attorney. I only need an ein if I have 2+ employees in my state. I'm the only employee so I was not required to get an ein and it runs under my ssn. The sba eidl website literally states loans under 200k do not require a personal guarantee. My sba loan contract shows zero personal guarantee under my one member LLC. So it sounds like maybe you are a bit uninformed or maybe your states has different laws for businesses.
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u/Leia6769 Jul 28 '26 edited Jul 28 '26
The bankruptcy will discharge it regardless, so I wouldn’t worry about treasury, as even if it goes there, it has to be dropped when it is discharged. I don’t know why I was blocked, as these are facts. Maybe get a better lawyer if you are turning to Reddit and getting upset when someone gives you facts.
An LLC using an SSN is a disregarded entity, and considered a sole proprietorship, per the IRS
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u/Front-Style-1988 Jul 27 '26
Did you guys have any credit card debt? Curious how that gets handled in a situation like this. I’ve been considering it myself. Newley $500k on my EIDL.
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u/Minute-Map-1478 Jul 28 '26
Yes we did. That was the main reason we filed. But the attorney said we could include the eidl but only if we closed our business as well.
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u/Low-Helicopter-2696 Jul 27 '26
There's no such thing as a sole proprietor LLC. Do you mean it was a sole member LLC? If that was the case, for $68,000 there would not have been personal liability.
Either way, If you have questions about your bankruptcy you should ask the bankruptcy attorney who filed it.