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  1. #1
    Join Date
    Jun 2014
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    7

    Default Debt Collector Says a SBA Loan Wasn't Included in Bankruptcy

    My question involves bankruptcy in the state of: California.

    I've been contacted by a debt collector (CBE) claiming that my business loan (SBA) was not included in my bankruptcy.

    My 2010 bankruptcy was handled by a now-retired attorney in Riverside County. Including my SBA loan in the bankruptcy was a high priority.

    The debt collector says they are working on behalf of the US Treasury. She says they have been trying to contact me for a long time, yet they only had my business storefront address and phone number, and I closed that a year before the bankruptcy.

    The debt collector tried to dig a lot of personal financial info. out of me, and I told her in 2 different phone calls that I was not comfortable discussing these things until I got something in snail mail verifying her claim. I have not yet received anything in writing.

    I've been trying get my credit back to the pristine condition it was in before my business failed, so if the SBA loan was not covered by the chapter 7 BK, I want to know. I don't trust this person or company though. She says a chapter 7 BK cannot include an SBA loan. Is this true? If so, can I hire another attorney and get the SBA loan forgiven? I'm now a teacher and don't make piles of money, though I have a small bit of equity in my home. The debt collector was discussing applying all of my home's equity to cover the SBA loan plus thousands of dollars in penalties for not making payments on it.

    Should I just ignore this debt collector? It seems like a scam, especially since she had so little information about me and the loan.

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: Debt Collector Says a SBA Loan Wasn't Included in Bankruptcy

    SBA loans normally are dischargeable in bankruptcy. An exception could arise if there was collateral for the loan -- in which case the lender would still have a claim against the collateral; it doesn't sound like that's applicable to your situation. If this person claims that your loan falls under an exception, and you choose to keep talking to this person, ask them to identify the specific exception that would prevent discharge of your loan.

    Was the loan specifically listed in your bankruptcy? If not, was this a no-asset Chapter 7 bankruptcy?

  3. #3
    Join Date
    Jun 2014
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    7

    Default Re: Debt Collector Says a SBA Loan Wasn't Included in Bankruptcy

    The bank holding the SBA loan was the first one on my list of creditors to be included in the bankruptcy (I checked my papers). All the other creditors seemed to be discharged in the bankruptcy.

    I had just purchased a house when I got the SBA loan, and the point of the bankruptcy was so that I would not lose my house. I would be surprised if the house was NOT kept safe in my bankruptcy, as that was my only asset.

    I received a snail-mail letter from the debt collection company yesterday, dated last November, when they had sent one to my former business address. It stated that if I didn't contact them within 30 days of the letter's date, they would assume I was agreeing that I owed the money. When I spoke with the woman on the phone last week, she reluctantly agreed to send me a copy of the letter they sent 6 months ago. I feel that they should have sent me a letter with a fresh date on it. This seems like part of their game.

    I feel like this is a bunch of baloney, but I do try to do things the right way.

    I'm wondering if I should send copies of the letter (after the meeting of creditors) finalizing the bankruptcy, and other relevant documents (whatever they may be). I am reluctant to give this debt collector unnecessary information on me though, as I don't trust them. I'd love to ignore the whole thing, but I want to be very sure it wouldn't come back to haunt me.

    Any thoughts?

  4. #4
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Debt Collector Says a SBA Loan Wasn't Included in Bankruptcy

    This is an SBA loan and you own a home. Did you, by chance, use your home as collateral to secure the SBA loan?

    If the answer is "yes", while you discharged the underlying debt, the SBA lien (mortgage) against the home is till in place.

    If the answer is "no", (and, even if it is "yes" and the collector is demanding money as opposed to threatening to foreclose) send the collector a nasty letter with a copy of the discharge and warn the collector that any further attempt to contact you will result in the reopening of your case and a request for an Order to Show Cause why the collector and the SBA should not be held in contempt for violating the discharge injunction. Send the letter via regular AND certified mail. Send a copy to the US Attorney General's office since it handles law suits filed against the SBA. That should get their attention.

    Des.

  5. #5
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Debt Collector Says a SBA Loan Wasn't Included in Bankruptcy

    Quote Quoting ShelliBelli
    View Post

    Any thoughts?
    I'm guessing that this is a junk debt collector attempting to scare you into paying.

    Despritfreya is a bankruptcy guru who has been participating on this and other sites for a long time.

    Follow the advice.

  6. #6
    Join Date
    Jun 2014
    Posts
    7

    Default Re: Debt Collector Says a SBA Loan Wasn't Included in Bankruptcy

    Thank you for such a clear answer. I will send those letters.

    Would it be OK for me to censor out (using black rectangles) most of my SSN, names of other creditors that were discharged, and other information that I would not want this debt collector to have? I feel like she was gleaning as much as she could to possibly use in pursing this issue.

    Thanks.

  7. #7
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Debt Collector Says a SBA Loan Wasn't Included in Bankruptcy

    Your discharge document should be one page and does not list the names of creditors. Attached to it may be a certificate of service which shows who received it. On that list should be the SBA. If you want to send the certificate of service as evidence that the SBA received it, feel free to black out all other info. As to redacting a SS #. . . redact away!

    Des.

  8. #8
    Join Date
    Jun 2014
    Posts
    7

    Default Re: Debt Collector Says a SBA Loan Wasn't Included in Bankruptcy

    Ah, I feel so enlightened after all the replies.

    I had a feeling something like a 'junk debt collector' existed, but I didn't have a name for it. Kind of like an ambulance chaser.

    I'm all ready to crank out a strongly-worded letter, complete with documentation and vital info. blacked-out.

    Hopefully this will be the end of it.

    Thanks, all.

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