Small Business Turnaround Group Inc

frequently asked questions

General questions

Will I get sued during a workout?

Any time you are in default with any creditor it is within the rights of that creditor to sue you as part of the collection of their debt.  That being said, SBTG focuses on an upfront approach that is an alternative to litigation, which often avoids litigation from occurring.  When litigation is present, it will cease upon the successful negotiation of the debt in question.  A consultation of your situation will provide much more insight into the likelihood of litigation.

how much savings will a debt workout achieve?

That varies greatly depending on many factors which include the value of the assets of the underlying business and the guarantors ability to repay the debt obligations in question.  Please contact us for a full analysis of your situation so that we may set your expectations for the amount of debt forgiveness possible.

if i have equity in my home will the bank foreclose?

With equity available and a pledged personal guaranty the creditor will absolutely have a right to foreclose and given no other options, likely will.  However, your home could be protected by homestead protection, through settlement, through a short sale, or possibly through the protection of bankruptcy.  Contact us to learn more.

Are my retirement assets available for collection?

Almost all ERISA retirement accounts such as a 401k are protected from collection.  However other retirement investment vehicles such as IRAs are not protected in all states.  For more information on your level of protection, contact us for a consultation.

Will a debt workout require that i hire an attorney?

Typically attorneys are not needed as a business workout is a legal alternative to litigation.  However, in the event a debtor is sued by a creditor or wishes to respond to a creditors claim via litigation, an attorney can and will become involved in the process.  Also, at the debtors request, SBTG will work with attorneys, CPAs and other trusted advisors in order to collectively conduct a workout. However SBTG often works solely with business owners and their creditors to achieve settlements without the involvement of attorneys.

Will my credit be affected by a workout?

It doesn't have to be.  Technically the borrower is the business and it should experience the negative credit reporting.  The business owner is only the guarantor on the note.  If the business owner presents a settlement that is acceptable to the creditor, they can avoid a credit score reduction.  However, in the event the creditor does sue the business owner as part of the workout, the business owner does experience a credit score reduction until the time where the debt is settled and credit restoration can begin.

If I have business partners do they all need to file an offer in compromise?

If each of the business partners are guarantors then they will need to address any shortfall liability through either an Offer in Compromise or through bankruptcy.  Guarantors are individually and separately liable for the entire amount owed.  Therefore one business partner can elect to file bankruptcy while the other partners elect to settle their obligation through settlement and the Offer in Compromise process.

sba specific questions

How much will my offer in compromise be?

The appropriate amount for an acceptable offer in compromise is derived from a number of factors which include the forced liquidated value of all of the guarantors assets which are available for collection and the guarantor's current and future projected ability to repay.  Many times this calculation will require that assets be appraised to assure the offer price is adequate.  Contact us to get a full evaluation of your personal asset base and ability to repay.

how do I know what is best suited for my business; a workout or a modification with the sba?

There are many factors that go into that decision.  The answer will differ depending on the asset base of the borrowing business, the amount of cash flow available for debt service, projections of future performance, and the underlying asset base of the guarantor.  Contact us for an analysis of your situation to determine which option is best for you.

Are there any long term effects to doing a sba debt workout?

Yes.  Once you default on a SBA loan, you and your associated business entities will no longer qualify for future SBA lending.


SBA Default experts