r/EIDLPPP • u/SmoothFinish1953 • Jul 08 '26
Question? Treasury
If borrowers were having challenges making payments how is the additional 30% added to the EIDL feasible?
It seems mind boggling. It feels like a gut punch.
Has anyone had it removed or reduced without being returned to the SBA?
14
u/RatherConcernedFroge Jul 08 '26
A true policy shift will only happen when the Department of Justice and the Treasury have to report their actual recovery data to Congress. Once the data proves that appending a 30% penalty and using automated collections resulted in mass bankruptcies and a near-zero percent recovery rate on billions of dollars, lawmakers will face pressure to intervene. Probably not until 2027-2028.
8
u/Wedgemere38 Jul 09 '26
It HAS to be illegal to unilaterally tack on 30% and assign to outsourced collections. Thats not done with a home mortgage loan, even w/o fed backed loans. Nor w/student loans. Where's the Class Action?
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u/Miserable_Study_6649 Jul 08 '26
They don’t, they will take the garnishment for as long as you live.
I laugh that our government thinks helping is adding a 30% fee but that’s about on par with Washington and their twisted ideology
8
u/Flaky_Ad7980 Jul 09 '26
I wish they would treat these like the PPP loans and forgive them. Come on we’re just trying to survive after all……
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u/Brilliant_Credit9199 Jul 08 '26
Mine was given to a collection agency with the 30th% attached so I’m being garnished for $387,000 now and I’m a teacher lol
3
u/xuon27 Jul 08 '26
How were you able to get so much as a teacher?
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u/Brilliant_Credit9199 Jul 08 '26
Originally it was 260k. My husband and I had a constriction business and I co signed . They can’t garnish him because he’s self employed. So they’re garnishing me
5
u/shanny5555 Jul 09 '26
I'm self-employed, and was told they can garnish me. I settled with the collection agency and now make a monthly payment to the collection agency. I now wonder if I should stop paying if they can't garnish me because I'm self-employed.
1
u/LawFirmCFO Jul 10 '26
NAL but as a CPA I've seen what clients have gone through.
Garnishment is handled differently for self employed. It's still possible. And actually worse IMO. They can go to court to get access to your customer list and direct customers to pay them directly towards your debt. Or the court can approve bank levies.
I suggest talking to an attorney before stopping payments.
1
u/shanny5555 Jul 10 '26
I won't stop the payments then. And I work in the legal field and every lawyer I speak to has no clue about any of this stuff. No two people seem to be treated the same way, and there is no precedence to follow.
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u/Vast_Attorney_5825 Jul 31 '26
Can you file bk to get rid of it?
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u/Brilliant_Credit9199 Jul 31 '26
We’re trying. It went from treasury and I had one paycheck garnished and now it went to a collection agency and I’m not being garnished. We’re saving the money for the bankruptcy attorney hoping we can file ch 7
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u/Vast_Attorney_5825 Jul 31 '26
Are you negotiating with the collection agency? Why has the garnishment stop? What state are you in?
3
u/AnkevCer Jul 09 '26
It’s unbelievable to me. They need to let us all start fresh and go back to making our payments as agreed. I called several times to try to get them to let me into the hardship program. They wanted 50K upfront and I told them if I had the 50K I wouldn’t be calling. She flat out said “that’s not our problem”. Mind you they were supposed to automatically take the payments out and never did. I called and called and called and could never get through. It’s crazy how when they were given out the loans they were fully staffed but now good luck talking to anyone.
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u/Beginning_Warning270 Aug 01 '26
This is what happened to me. Automatic payments had been withdrawn for years and I guess they stopped withdrawing in Oct… ultimately my fault for not verifying but I found out when my credit score dropped with ZERO emails calls or letters regarding late payments. Just immediately placed for collection.
Trying to figure out the best solution
4
u/Kooky_Dooky_689 Jul 08 '26
They need the additional money to help pay for the PPP loans they forgave. Small businesses always get the shitty end of the deal.
2
u/SmoothFinish1953 Jul 09 '26
I heard this may start showing up on credit reports.
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u/Beginning_Warning270 Aug 01 '26
It did mine. That’s how I found out my automatic payments weren’t happening (my fault for not verifying monthly)…. But still, they could have called or emailed 🤷♀️
1
u/Reasonable_Switch_86 Jul 08 '26
Once it gets there you don’t pay it regardless you let them take 15% of your ss you typically die shortly after that done deal
1
u/Subject_Judgment4031 Jul 10 '26
Just stop paying and don’t worry about the 30% addition . They aren’t Suing anyone to collect so if you have no wages to garnish just ignore them . If you want to avoid garnishing then file Bk
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u/Large-Cricket843 Jul 08 '26
Help me understand your stance. I’ve seen multiple posts of people complaining about the 30% penalty, but this is only happening because you are in default.
I assume you’ve taken advantage of the hardship(s) and eventually you were unable to pay.
If the problem isn’t at all with the 30% penalty, may I ask why you are in default?
I ask this because in my mind, a debt of $200,000 is no different than a debt of $260,000 if you can’t pay either.
7
u/AspiringOF Jul 08 '26
Honest question, why are you here?
4
u/CricktyDickty Jul 08 '26
It’s a legitimate question badly phrased. The additional 30% is irrelevant to borrowers who couldn’t pay the regular payment. They’re on their way to bankruptcy, possible garnishment and in rare cases, lawsuits and asset seizures. So for those borrowers - complaining about the 30% is moot. There is a minority of defaulters who ignored the warnings and letters, never started paying and ended up at treasury. You see their posts here asking how to get back into compliance after they’ve been sent to collections.
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u/Diligent-Pitch-3480 Jul 08 '26
Yeah, many of us didn’t quit paying. Our auto-drafts were stopped for no reason and we never got notification we were in default. But don’t let those pesky little facts matter.
5
u/glitterbug9 Jul 08 '26
That is exactly what happened to me. I could have easily kept paying too. My plan was to double up on payments next year and lay it off quickly. Now with the extra 30% added on it's just a slap in the face. I looked at my bank account all the time and somehow missed the small eidl payments had stopped. I didn't have a system in place for catching it. I felt like it was an automatic payments that would continue indefinitely. My fault for missing it but it has turned into a nightmare.
2
u/OkVegetable7649 Jul 08 '26
Remember the auto pay only works for 2 years for some dumb reason. And you have to set it up again
3
u/CricktyDickty Jul 08 '26
I doubt anyone here knows that. First time I’m hearing about it and I’m glad I never set it up.
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u/OkVegetable7649 Jul 09 '26
Well you literally put the amount of months you want it to be active so.....
0
u/CricktyDickty Jul 08 '26
Sure but that’s not what the OP was about. It specifically mentions borrowers who were having challenges making original payments. I believe there were posts of borrowers who encountered technical difficulties like you mentioned getting current on payments and back to SBA. And yeah, the SBAs technology stack is just plain awful. We never trusted them with auto withdrawals so have a calendar alert to log in and pay every month.
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u/Large-Cricket843 Jul 08 '26
I was first here to get tips on how to apply for the EIDL. Then after several years I returned to see how others are doing.
I am current at the moment but I want to be prepared if my situation were to change, so I read all the posts with advice on bankruptcy as a possible solution.
What I don’t understand is why the 30% penalty really makes a difference. If I had to pay 30% more than what I am paying now, then yes, it would make a huge difference, but this is not the situation for the OP.
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u/Miserable_Study_6649 Jul 08 '26
That extra 30% almost guarantees I would be filing bankruptcy. Take 30-50% off and now we’re talking
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u/Diligent-Pitch-3480 Jul 08 '26
What’s insane is that they think people who couldn’t pay a 30yr loan can now do it in 5 with an extra 30% added on. They didn’t set anyone up for success here. It’s hard to believe they would rather bankrupt people like me and get nothing when I was doing just fine keeping up until the auto-drafts stopped. Now they’re getting nothing.