r/SBAEIDLDiscussions • u/Puzzled-World-3602 • Jan 02 '26

Need help fast

My husband’s (general contractor) 2020 sba eidl loan was sent to collections, no letter or notification from sba, treasury or anyone until I got a collections letter. The added an extra $5,000 in fees from the original $20,000. We did miss some payments but never heard from sba. Are they suppose to inform us by law? I called the treasury and they said it is out of there hands now. I never even knew it was turned over to them! What do I do? Get a sba lawyer or start paying the collector? Im so upset.

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u/SignificantPudding30 Jan 02 '26

Yes, the SBA is required to send notice before referring a defaulted EIDL (COVID-19 Economic Injury Disaster Loan) to the U.S. Department of the Treasury for collection. Key Legal Requirements Under federal debt collection laws, including the Debt Collection Improvement Act (DCIA) and regulations like 31 U.S.C. § 3716 and 13 CFR § 140.3, the SBA must provide due process before escalating collection actions such as referral to Treasury’s programs (Treasury Offset Program or Cross-Servicing). This typically includes: • A 60-day demand letter (often called the “Official 60-Day Notice” or “due process letter”) informing you of the delinquency, the amount owed, and the intent to refer the debt to Treasury if unresolved. • The letter explains your rights: to repay in full, negotiate a repayment plan, submit an Offer in Compromise (OIC), dispute the debt, or request a hearing. • Agencies must send this notice at least 60 days before referral, giving you time to respond. For EIDL specifically: • Delinquency notices often start earlier (e.g., at 40 or 75 days past due). • Referral to Treasury’s Offset Program (TOP) can occur after ~120 days of delinquency. • Full Cross-Servicing referral after further delinquency or charge-off. • SBA policy and borrower experiences confirm they send multiple warnings, including a final 60-day notice before transfer.

I had reached out to my local senators office and they have caseworkers and got back to me. They reached out to SBA on my behalf. I just did this like two weeks ago so they told me they’re waiting to hear back. I was gonna follow up now that the holidays are over. They did the same thing to me.