Settling Your Debts 101 - Learning The Basics of an SBA Offer in Compromise
There are times when you really need to make a hard decision and closing your business down could be one of those difficult but best decisions. However, you need to ask yourself what you are going to do next after closing your business down.
Establishing a plan is one of the first things you should do before you close your business. The plan would usually talk about you and your bank working together. The SBA loan you have would presumably have been secured with the assets of your business. That could include anything that is considered to be an asset of the business such as tables and chairs, sinks, ovens and others. Liquidating all the collateral will be something the bank will want to do before they entertain any negotiation of your debt settlement.
There is however, your primary residence which is the only exception when it comes to this matter. Letting the bank know by calling them that cooperating with them in however way you can is something you need to tell them in addition to your explanation why you have closed down your business. One of the things you should be aware of is the process that will happen which involves having your assets being valued and sold so that whatever amount of money from the sale will be used for the balance of your loan's settlement. Check out the SBA loan problems.
Only when your business have been closed and all the assets of the business have been liquidated will you be entitled to be eligible to submit to the SBA an Offer In Compromise (OIC). You should know that the typical process of accomplishing this is when through your lender, you submit an Offer In Compromise. Prior to being forwarded to the SBA, the lender will be reviewing your Offer In Compromise first. Click here to understand more about SBA.
One thing you need to keep in mind is that you have to play nice with your bank at all times because the SBA will want to know if you have been cooperative or not. The Offer In Compromise should at least cover the amount of equity in your home and always remember that your house is also being held as collateral. If that is something you are not able to offer then most likely the offer you made will be rejected by the SBA.
The SBA will approve your offer if it is strong and the personal guaranty as well as any remaining liens on your home will be released after what you agreed to pay in settlement of your debt have been paid. If the entire amount of the OIC hasn't been paid yet then the releases will not yet come. Read http://en.wikipedia.org/wiki/Lawyer to gain more info about SBA lawyers.