Your SBA loan went to the U.S. Treasury. The clock is running.
Once your SBA loan goes to the U.S. Treasury, the government can take your tax refunds, your Social Security, and money out of your paycheck — without ever going to court. We step in before that happens and work to lower what you pay or settle the loan for less.
We take cases with SBA loan balances of $100,000 or more · Michigan office · We help business owners across the U.S.
Why the loan ends up with the U.S. Treasury
Federal law (31 U.S.C. § 3711) says the SBA must hand a past-due loan over to the U.S. Treasury once it is about 180 days late and the lender has not been able to work it out.
The path is almost always the same: missed payments, a default letter from the SBA, a failed try at lowering the payment, and then the loan is sent to Treasury. Most borrowers do not realize how fast this moves — sometimes weeks, not months.
Since the pandemic, the government has been moving faster on these loans, especially when paperwork or eligibility looks questionable.
What changes once Treasury has your loan
Once the U.S. Treasury has your loan, the government can do things a regular bank cannot. Here is what that looks like in real life — and why we move fast.
They take your tax refund or Social Security
The government can grab federal money headed your way — tax refunds, Social Security checks, payments owed to you as a federal contractor — and put it toward the loan. Usually you find out when a deposit just does not show up.
They take up to 15% of your paycheck
The government can pull up to 15% of your take-home pay straight out of your paycheck — without a judge, without a court order. If you signed the loan personally, your wages can be taken even if the business is an LLC.
They send your case to the Department of Justice
If the loan still is not resolved, the Department of Justice (DOJ) can sue you in federal court. That means court judgments, liens on your property, and court-ordered collection. Once a lawsuit is filed, your options get tighter and tighter.
Damage that sticks around
Once your loan is with Treasury, it shows up on your credit report and can block you from ever getting another federal contract. The damage often outlasts the debt itself.
If you signed personally, the government can come after you — not just the business.
A lot of owners think their LLC or corporation protects them. With most SBA loans, it does not. When you signed the loan, you almost certainly signed a personal guarantee — a promise that you, personally, will pay if the business does not.
That means the government can go after your personal bank accounts, your home, and your investments — even if the business closes. The good news: there is still a lot we can do to protect those things. That is exactly the work we do.
If you own 20% or more of the business, you almost certainly signed a personal guarantee. The government can come after you personally.
Smaller COVID EIDL loans usually did not require a personal guarantee — so your personal assets are often safe.
Larger COVID EIDL loans did require a personal guarantee from any owner with 20% or more. Your personal assets are at risk.
You still have options. Here are the main ones.
Having your loan with the U.S. Treasury is serious — but it is not the end. Which option fits depends on your loan papers, what you signed, and how far down the road the government already is.
Settle for less than you owe
We file what is called an Offer in Compromise — a formal settlement. If the government agrees, you pay a smaller amount and the rest of the debt is wiped out. We build the file the way the government actually wants to see it, which makes acceptance much more likely.
Lower monthly payments
We negotiate a payment plan you can actually afford. This stops the government from taking your paycheck or your tax refund while you pay — and usually keeps the case from being sent to a federal lawyer.
Fight the amount or the loan itself
You have the right to push back if the amount is wrong, if your payments were not counted correctly, or if the SBA wrongly accused you of fraud. These rights have short deadlines, so do not wait.
What lowering an SBA payment actually looks like.
A real example of how we take a monthly SBA payment the business cannot afford and turn it into a number the business can actually carry.
If you got a letter from the government about your SBA loan
These letters come from an office called the Bureau of the Fiscal Service (BFS). Most people have never heard of it — and a lot of folks throw the letter away thinking it is junk mail. Do not throw it away. Do this instead:
- 01
Read the letter carefully and write down every deadline.
The letter gives you a short window to respond. Miss it and you lose options.
- 02
Find your original SBA loan papers and any other letters from the SBA.
What you signed and what they sent you decides what we can do for you.
- 03
Pull together your payment history and anything you tried before.
Showing the government you tried in good faith gives us more room to negotiate.
- 04
Call us before you reply or sign anything.
One quick reply or signature can lock you in and take options off the table for good.
Questions business owners ask us first.
Send us a confidential message.
Got a letter from the government? Call today.
A free, confidential call. We listen first, then tell you straight what we can do.
Confidential. No obligation.