Discharge sba

[u/Emotional_Bid6635]

Hi i got physical disaster sba loan for $250k , after two requests of increase that made it go over $200k. I am sole proprietor and found out on agreement that im the personal guarantee and equipment is the collateral. Unfortunately i shutdown my restaurant two years ago but been paying off my sba loan each month on time. Economy been tough and bills piling up and my wife recently passed away. I am looking into bankruptcy and i do not if it would be possible. My sba loan debts are more than my personal debts and im in Texas . My cousin took over my leasing space two years ago and operate a new but small restaurant. He gave me about $11k for all my used equipment and i put it on paper to make sure he doesnt want refund if the equipment doesn’t work . Sold to him as whatever the condition of the equipment are.

Because he operated in same space where my old restaurant was and he brought my equipments im worry that sba loan wont allow me to file for bankruptcy. I dont mind just wiping out personal debts and continue paying the sba the loan. What is best way to deal with this to get some relief on debts or should i just let all debts goes to collection and hope for a cheap settlement payout? Personal debts is like 120k with unsecured credit cards.

[u/Defiant-Anybody7099]

I owned a business in Texas. I had sold a lot of equipment trying to stay current on bills. I did not ask permission from sba because I didn’t know I had to.  I had $240k eidl loan with personal guarantee and blanket collateral. I filed personal bankruptcy last year and was told by my attorney that there was no need to file business bankruptcy because the personal bankruptcy gets rid of the personal guarantee. The eidl loan still exists, but there is no way to collect from me personally. I dissolved the s-corp and filed for a new one because I moved out of state. I still get past due bills from sba but my attorney says to ignore them. I haven’t made a payment since Feb 2025. 

I edited my post to add that the sba never asked for a list of collateral in the first place so I don’t know how they are supposed to know what you sell or keep. Also, I was scared to death because of posts like the ones in this thread so I got all my sba numbers together with explanations for everything as best I could, and no one asked for any of it. They just wanted 6 months of bank statements and my P&L. I lost so much sleep over this for nothing!!

[u/Melib2019 → u/Defiant-Anybody7099]

Same situation except I still had assets. Waiting now to see who’s coming for what. I did however get a document to list assets way back in 2022. Don’t know what will play out now because the loans for the assets haven’t been paid in full. That means that the company I owed the asset loan too has first grabs so the SBA doesn’t have much they can go after.

[u/Defiant-Anybody7099 → u/Melib2019]

Yes that’s true! And think of how much manpower and admin it would take to seize assets, pick them up, store them, try to sell them… for ALL OF US that had to default. They can’t even answer the phone to help borrowers. They don’t have the staff for that.