A Guide To A Good SBA Offer In Compromise Strategy

Could you be struggling with your SBA debt? If your answer is yes, you do not have to deal with this alone. It can be difficult to determine what to do when you are faced with such a situation. However, the most important thing is to ensure that you have reacted in a fast and effective manner when it comes to reaching a settlement. Here is an effective strategy for a sba offer in compromise strategy.

A Guide To A Good SBA Offer In Compromise Strategy

Definition of an SBA offer in Compromise?

This involves paying for a portion of an SBA that will make it possible for the SBA to consider the debt as either paid and thereafter search for collection from the debt.

Some of the key requirements for an offer in compromise for an SBA loan include:

  • The loan should be classified as either in the status of liquidation
  • You should not be bankrupt when making the offer
  • It should be impossible to recover the entire amount that is owned on the loan for several reasons such as the debtor being unable to make the payment in a reasonable time.
  • You should be unable to pay the debt in a reasonable period of time and the enforcing body should be unable to make a collection of the debt.
  •  It should also be clear that the collection cost doesn’t justify the enforced collection.
  • There should also be a significant litigative risk.
  • It should be clear that collecting the loan will cause a significant difficulty to the debtor due to his special condition such as illness.
  • The loan collection should not be barred by a valid case such as bankruptcy proceedings
  • The debtor should not have involved themselves in misrepresentation, fraud or other kids of financial misconduct.
  • The amount of compromise should have a good relationship between the amounts that is recoverable in a certain amount of time through the enforced collection proceedings. This should also be enough to protect the SBA loan program integrity.

You need to show that you do not have an amount that allows you to pay the debt in a good time. If the debt is high, then it means that chances of repaying the full amount are low. You can seek the help of an experienced SBA attorney to guide you if you are unable to pay  within a reasonable time period . The lawyer will show why an SBA offer in compromise will offer a better recovery strategy.

Establish if there is significant litigative risk

The SBA offer in compromise strategy should determine if there is any litigative risk. This means that you should find out if there are doubts on your ability to succeed in a court of law as a result of factual disputes and legal issues. The litigative risk issues should only be addressed by attorneys who are qualified. You will then need to indicate that the offer in compromise is a better method of recovery as compared to enforced collection.

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