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At Shenwick and Associates, we regularly represent
individuals and businesses facing financial distress, including borrowers who
have defaulted on Small Business Administration (SBA) loans. Over the past
several months, we have observed a marked increase in aggressive collection
activity by the SBA and the U.S. Department of the Treasury against
borrowers and guarantors of defaulted SBA loans.
Heightened Enforcement Activity in Late 2025 and 2026
Beginning in the last quarter of 2025 and continuing into
2026, collection efforts by the SBA and the Treasury have intensified.
These efforts are not limited to letters or informal demands. Instead, we are
seeing the government use a broad range of statutory collection tools,
including:
- Retention
of private collection agencies to pursue defaulted SBA loans; - Administrative
wage garnishment of up to 15% of a debtor’s wages, without the
need for a court judgment; - Seizure
of federal tax refunds through the Treasury Offset Program; and - Offset
of Social Security benefits, with up to 15% of monthly payments
taken from individuals who are personally liable for, or who guaranteed,
SBA loans.
These collection actions are being taken against both
primary obligors and personal guarantors of SBA loans. If you signed a
personal guarantee, your personal income and federal benefits may be at risk.
The “They Won’t Collect” Myth
We recently met with a new client who told us that their
accountant had advised them: “Don’t worry about a defaulted SBA loan—the SBA
isn’t really collecting on those loans.” Unfortunately, that advice is simply
wrong!
Based on our recent experience and the increasing number of
calls we are receiving, it is clear that the SBA and Treasury authorities are
actively pursuing collection of defaulted SBA loans. Assuming that the
government will not act is a mistaken and risky strategy that can result
in wage garnishments, lost tax refunds, and reduced Social Security income.
Take Action Early
If you have defaulted on an SBA loan, or if you personally
guaranteed an SBA loan that is now in default, it is critical to take
proactive steps. Options may exist to address the debt, such as a mitigate
collection efforts, or restructure or resolve the obligation, or a bankruptcy
filing and or a payment plan with Treasry—but those options are often
time-sensitive.
Consulting with an experienced bankruptcy and workout
professional can make a meaningful difference in protecting your income,
your retirement income and your financial future.
If you are facing collection activity related to a defaulted
SBA loan, we encourage you to seek qualified legal advice sooner rather than
later. For those clients or their advisors who have questions with respect to defaulted
SBA loans, please contact Jim Shenwick, Esq.
Jim Shenwick, Esq
917 363 3391
Please click the link to schedule a telephone call with me.
https://calendly.com/james-shenwick/15min
We help individuals & businesses with too much debt!
Are you embarrassed that you can’t get by at 48.07 per hour?
Forty-eight dollars per hour, actually $48.07, is a hundred thousand dollars a year. That sounds like a lot of money, but people who are making that much are contacting me in record numbers. Maybe you should, too.
The truth is $100,000 annually doesn’t go very far around here. (Last week, one really rich guy in the news said he considers $140,000 for a family of four as the “poverty line.”)
By contrast, Patrick Mahomes, one of the highest paid athletes ever, makes about $48 million a year. Is he worth that? While he’s having a bad season, he is still better at football than you or me or almost anybody.
Elon Musk makes $48 million an hour.
If you are making $100,000 a year, you aren’t Patrick Mahomes. And you certainly aren’t Elon Musk. You shouldn’t be too embarrassed to contact a bankruptcy lawyer.
Elon Musk Makes $48 million an hour
Recently, Elon Musk had his hand-picked board of directors at Tesla vote him a trillion dollars over ten years. That’s $48 million an hour! Musk makes as much every hour as Mahomes does in an entire season.
That means if you are making $48 an hour, a hundred thousand a year, Elon Musk thinks he’s a million times better than you.
Are you struggling to make ends meet?
So if you are struggling to make ends meet, even if you make a hundred thousand dollars, don’t be embarrassed to call a bankruptcy lawyer. I talk to a dozen people a month who are making more than $100,000. Let’s talk about whether bankruptcy can fix your cash flow problems.
I understand that it costs a lot to live around here, and I know you are not Elon Musk.
Chapter 13 Bankruptcy
Two or three times a month, I suggest Chapter 13 for high income families. As a rule of thumb, Chapter 13 can reduce your monthly payments by about one-third. (Sometimes more. Now and then, a lot more.) And, unlike the so called debt settlement or debt consolidation outfits, your creditors can’t bypass the Chapter 13 plan and sue you in state court.
Chapter 7 Bankruptcy
Often even high income people ar eligible for Chapter 7 bankruptcy, and can discharge their debts. Even high income families can be eligible.
Let’s talk
As long as you are not as rich as Patrick Mahomes or Elon Musk, the bankruptcy law can probably help you. Donald Trump is embarrased to talk about his business bankruptcies, but he wasn’t too embarrased to file (business) bankruptcy. He said it’s “just business” to use “the chapters” to “pare debt.” He said, “I’ve used it three, maybe four times, and came out great.”
If Donald Trump wasn’t too embarrassed to use the “laws of this counrty,” Find out if you can clear your debt, too.
The post Too embarassed to talk to a bankruptcy lawyer? appeared first on Robert Weed Virginia Bankruptcy Attorney.
Why is it Too Late for Asset Protection Planning after a Claim or Litigation Arises?Jay Adkisson has written a very informative article about why it is difficult to do Asset Protection Planning after a claim or lawsuit arises. The article was published in Forbes. At Shenwick & Associates we get many telephone calls and emails from clients about Asset Protection Planning and we summarize that article below. Clients
often ask whether they can protect their assets after a lawsuit threat appears
on the horizon. Mr. Adkisson explains in his article, that once a
claim exists, meaningful asset protection planning is unavailable. Under the Uniform Voidable Transactions Act (and its predecessor,
the Uniform Fraudulent Transfers Act), a “claim” arises the moment the
underlying event giving rise to liability occurs—not when a demand letter
arrives, not when a complaint is filed, and not when a judgment is entered. Any transfers made
after that point are vulnerable to attack as voidable transactions.
Many
debtors mistakenly believe they are safe if payments are current or no lawsuit
has been threatened, but the law provides no such protection. Mr. Adkisson states that post-claim
transfers often trigger serious consequences far beyond simply unwinding the
transaction. -Creditors can sue the transferee—often a spouse, child, or
friend—and obtain a judgment for the value of the transferred asset. -Courts may
award attorney’s fees, civil conspiracy damages, or even punitive or trebled
damages if the transfer was intended to evade creditors. In bankruptcy, these
transfers can result in denial of discharge under § 727, converting what might
have been a dischargeable debt into a permanent financial burden.
Asset
protection planning must occur before any claim exists. However, if a claim exists or litigation has been commenced clients are still allowed to utilize Federal & State Exemption statutes.Clients or their advisors with questions about Asset Protection Planning should contact Jim Shenwick, Esq. 917 363 3391 [email protected]Jim Shenwick, Esq 917 363 3391 [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!
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