What Happens If You Default on SBA Loans. There Comes the point in time when you are in dire need of a fast loan. The loan comes in handy at a time when a medical emergency faces you or when you want to pay your landlord rent to avoid forceful eviction. All in all, the above mentioned is a need that cannot get quenched by any other thing other than money. At the end of the day, you always go for a loan that is reliable, and that has low-interest rates, a perfect example being the SBA loan. Although spending money obtained from a loan is always sweet and fulfilling, there is always a disturbing thought that lingers at the back of your mind, that of repaying the loan in due time. Because of financial constraints, you find yourself defaulting on the loan. When you default on an SBA loan, you are likely to face the challenges mentioned below. Since it is the Federal Government that gives SBA loans, it becomes the duty of both the bank that gave you the loan as well as the national government to pursue you using all avenues at their disposal. One thing that will happen to you when you default an SBA loan is to receive a call or direct mail from the lender. If you get contacted by the bank but fail to respond, the bank moves swiftly to recover its money from you using the provisions outlined in the SBA loan agreement. In such an agreement, the law compels you as the borrower to sell any item you put as collateral, to raise enough funds to repay the loan.
If You Read One Article About Lawyers, Read This One
When you fail to accept the SBA loan agreement, the local bank makes efforts to get hold to some of your property. As an SBA loan defaulter, you will be required to pay the loan arrears in full, the interest, as well as miscellaneous expenses.
Discovering The Truth About Resources
The IRS comes to the assistance of the bank when you fail to meet any of the above demands. Through an Offer in Compromise agreement, you, the IRS, and bank enter into an arrangement on how you will repay the loan arrears. But prior to such an agreement, IRS assesses all your assets and tax information and determines whether or not you fit the bill. Based on the type of arrangement, the IRS pays the lender on your behalf. If your proposal happens to get declined by SBA; you have no other option other than to seek assistance from the United States Treasury Department. If you decide not to repay a loan, be willing to lose a lot financially. Before seeking an SBA loan, always take the time to do some background research and assessment and evaluate yourself to ascertain whether or not your financial sources will enable you to repay the loan in real time.