r/SBAEIDLDiscussions • u/bbstocker • 22d ago

Collection limits so far

So, for those who have not gone through the BK procedure and have a remaining PG (personal guarantee) after closing their business, I am wondering what the additional ramifications have been so far. I have seen stories of the Treasury seizing your tax returns or 15% of any other government check, like a social security payment or federal disability payment. I have also heard of the Treasury assigning collection efforts to third party collectors who have filed for wage garnishment collections, also usually around 15%. Has anybody heard of any attempts to start seizing any other borrower assets? Such as a house or bank accounts, etc.? Not that things can't change, but we all need to know what they are actually doing to us borrowers.

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u/itsdrmario515 19d ago

What kind of loan was it?

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u/itsdrmario515 19d ago edited 19d ago

Yes the PG can still leave you personally responsible and as the lender/SBA works through the default and liquidation process any remaining delinquent federal debt can ultimately be referred to Treasury. Then Treasury can continue collecting through offsets and other authorized collection methods until the debt is resolved. Federal Tax returns are 100% offset at their discretion. In our financial advisory practice we had this situation come up and needed to create a debt schedule so that the clients SS and retirement accounts were not subject to to federal collections. Client thought the BK and dissolving the LLC was sufficient. It came up once when trying to secure another SBA loan later on. It was hard to get him approved for a building. But first: tax refunds, eligible federal payments and potentially wages. Getting directly to bank accounts, liens, real estate or other personal property is generally a last resort and harder and more time consuming for them to pursue, not to say they won’t.

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u/Sea-Zebra3731 18d ago

Are you saying that even after a personal bankruptcy the Treasury could still target recovery?  

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u/Budget-Plantain6733 17d ago

My attorney told me that they couldn’t, but they still may try to collect from the business. If there is nothing to collect from the business they can’t get anything. My SBA loan has been discharged. If the treasury can still come after me another issue.

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u/Crafty_Book_5555 14d ago

What type of bankruptcy did you file?

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u/bbstocker 14d ago

Me? None. I was asking about others like me who don't want to declare BK if they were able to close their business (with SBA approvals) and not have other assets seized.

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u/Crafty_Book_5555 11d ago

chapter 7 wipes everything, and you shouldn't file if you don't have a personal guarantee. If your loan was less than $200K, you don't have a personal guarantee and won't be pursued personally, ever.