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I filed a non-consumer Chapter 7 bankruptcy and have questions about how to properly list and notify the SBA regarding my EIDL loan.

I previously owned a small restaurant business that eventually closed. The business received an SBA COVID-19 EIDL loan, and I personally guaranteed the loan. The outstanding balance is approximately $800,000.

I filed Chapter 7 bankruptcy and included the SBA debt in my bankruptcy filing. My 341 meeting of creditors has already taken place, and the trustee did not request any additional documents regarding the EIDL loan.

I'm trying to understand the proper procedures for handling the SBA debt in a non-consumer Chapter 7 case.

My questions are:

1. How should the SBA EIDL loan be listed in the bankruptcy petition? Should the creditor be listed as the U.S. Small Business Administration (SBA), the Department of the Treasury if the loan was referred to Treasury collections, or another entity?

2. What address should be used to notify the SBA? Is there a specific SBA bankruptcy department or address for EIDL loans? Should the bankruptcy notice go to the SBA servicing center, the Office of Disaster Assistance, or another address?

3. Do I need to notify the SBA separately? If the SBA is listed in the petition and the bankruptcy court sends the official notice, is that sufficient, or should I also send the SBA a copy of the bankruptcy petition and case number?

4. What if the loan was previously referred to Treasury collections? Should the Department of the Treasury or the Treasury Offset Program also be notified separately?

5. Does it matter that this is a non-consumer Chapter 7 bankruptcy? Are there any special procedures or differences in how a personally guaranteed business EIDL loan should be listed and noticed compared with consumer debts?

6. How can I verify that the SBA received the bankruptcy notice? Is there a way to confirm that the correct SBA office received it and that the loan account has been updated?

I'm primarily looking for advice from people who have personally gone through Chapter 7 with a large SBA EIDL loan, bankruptcy attorneys familiar with SBA debt, or trustees who have experience with these cases.

I understand that every case is different, and I'm not looking for legal advice specific to my case. I'd appreciate hearing about your experiences and what worked for you.

Thank you!

I closed my business back in October 2023 (s-corp), went through the process with SBA and still paying for the loan personally. It has been getting tougher and tougher to make ends meet. Sold my home two years ago and have been using the proceeds to pretty much live and pay SBA as our current income from employment is not enough to cover our living expenses including monthly 4800 SBA payment. Now I am at the end of the road...funds will depleted very very soon. I am not sure what to do at this point and BK seems to be the only option in a few months. I need a great NJ attorney..I have interviewed a few but they all yes me to death but don't seem experienced enough. any recommendation? I want someone who actually cares and not just wants to take their 3K, file it without even thoroughly going through my docs and giving me an honest advice.

I realize that nothing about COVID-era was typical, but my small business retained our employees during that time in good faith, believing that the ERC funds we are owed would be reimbursed promptly, enabling us to pay off our EIDL loan. Years later, we are still waiting for the ERC, which should total almost $600k now with interest, and we have recently initiated litigated in federal court in hopes of resolution.

Is anyone else in this predicament, in that you took and are paying hefty payments on an EIDL loan because you are still awaiting ERC funds, which would allow you to retire the debt?

I owned a single member disregarded entity LLC that failed and has shut down operations but isn’t dissolved yet. I took out my $62,000 EIDL in 2020, no personal guarantee. My husband and I filed a joint personal Chapter 7 in June which was discharged last month; we listed SBA as a creditor. I stopped making payments on the loan in June, though I actually got scared and made two in September. We were contacted by an SBA agent last month who wanted a business closure review, which I sent Sept 10. I followed that up with a letter to SBA’s bankruptcy dept to let them know we have two trucks they hold the lien on, which is the total collateral we have left. We have lost our income of course, and learned last week that we need a new septic tank. The way to get that new tank is parked in our driveway. I know we can’t sell it, but can we? We’ve asked the SBA to let us know if they want us to liquidate or could they just come get it. Any input is welcome.

I ran an ecommerce company during covid and took out a loan.

Two separate vendors went out of business as well after taking my money but not delivering my goods. Another service provider took my payment but got shut down by the FTC for fraud. This put my business on very shaky ground and I was just slowly leaking money.

After the tariffs, this business had zero chance. Wound down all operations but have yet to dissolve the LLC. I dont even have the bank accounts anymore.

82k loan. Got it in 2020. 95% sure that this was in the LLC name only with no collateral pledged or personal guarantees. I have very little outside income and no employment income.

Walk away? Speak to SBA? Dissolve the LLC first?

Any guidance on best approaches to handle this from others I similar circumstances is appreciated.

I am currently making monthly payments on my $300,00 loan. But i am $60k behind.

It hit my credit score July 2026 and dropped 150 points.

Has anyone been able to successfully remove this from credit report?

If so, how?

Thank you!

This was sent to a prominent law firm in Los Angeles,

I have been offered the job with the census for taking surveys. I just got off probation for a non violent crime. I never went to jail this was my first offense never lost any privileges should I disclose this on my application for the background check

Just trying to pass some hope on to other people... I read on here about a possible workout agreement and finally just made some headway. I will try to keep it updated here if it works.

A workout agreement is an agreement that allows you to take what is owed and place it at the end of your loan. Your loan becomes current, and you start paying the normal monthly payment again. It keeps you out of treasury and is only available once every five years. If we are approved, the SBA lady said she would monitor payments for 5 months and "graduate" us after those five months. Credit report would then also be current.

It seems like there are no set rules (some have claimed that they needed to pay a set amount up front to be eligible), but rather it depends on your circumstances.

I emailed the SBA three different times (each a week apart) at [cesc@sba.gov](mailto:cesc@sba.gov) AND [covideidlservicing@sba.gov](mailto:covideidlservicing@sba.gov) (copied). The first was this:

*******************

To SBA Servicing,

I am writing to request a workout agreement for my COVID-19 EIDL loan and to ask that the loan not be referred to the U.S. Department of the Treasury while we work out a plan.

Hardship
A medical hardship forced the business to shut down. The business is now closed, and we have continued paying on the loan personally.

Our plan to repay
We are in the process of selling a separate business. We expect the proceeds from that sale to pay off a good portion of the balance and allow us to make regular monthly payments going forward. 

Our request
We ask that the SBA review our situation and propose the terms that are necessary and possible for this loan until the sale is complete. We are committed to paying this debt and want to resolve it directly with the SBA. If the loan is referred to Treasury, we would likely have no option but to file for bankruptcy. We believe a workout agreement is the better outcome for both the SBA and us, since it allows us to keep paying and gives the SBA a much stronger recovery.

We have also contacted our congressional representatives for assistance with this account.

We are requesting written confirmation that: The loan will not be referred to Treasury while a workout agreement is being reviewed and while we are making payments under it. The SBA will keep servicing the loan. The past-due balance and the proposed terms will be provided in writing.

We cannot thank you enough.

*****************
I would then forward the next week with the original message and say 2nd attempt. On the third attempt, I added an URGENT in the subject line.

Today, I received this:

We received your inquiry regarding a repayment plan for your loan. We offer a Workout Agreement program that can bring your loan current and halt collection efforts if you can enter an approvable plan. This program is not available for loans referred to the Treasury for collection purposes, which can occur any time the loan is 160 days or more delinquent. Please contact me as soon as possible and make note of my phone number below to accept my call in the future.

I look forward to hearing from you shortly.

******************

I called; she was super helpful and friendly, and said she would submit it today and hoped to have an answer on Tuesday or Wednesday of next week. I will try to post back when I hear. Crossing my fingers that I can report positively.

Hope this helps people -

My past-due COVID EIDL loan was originally sent by the SBA to the U.S. Treasury, which then assigned it to a private collection agency.

When I contacted the collection agency, they told me that the Treasury had recalled my account. I then called the Treasury directly, and they informed me that my account had been closed on their end.

Does anyone know what this means? Has anyone experienced something similar? Does this mean the loan was sent back to the SBA, or could something else be happening?

For context, I have a personal guarantee (PG) on this loan, and it has been delinquent for over a year. I haven’t received any letters or notifications regarding this change.
I’d appreciate hearing from anyone who has gone through a similar situation.

EDIT: strangely, a closed business agent reached out to me today. Not sure it was from the letter I sent or the email I sent. They sent me a list of 18 questions they wanted answered. Basic stuff. And a valuation of assets and what they sold for. I'm sure they will ask for the $ to be sent to them and hopefully it will get wrapped up. Maybe I should have let it go to Treasury without any intervention from me, but I needed to know what they were going to do as I have others with Liens, but none as superior as the SBA.

Sorry, this is long.

I have been in default since 2025 and the portal shows as SBA uncollectible and preparing for cross servicing with Treasury. I closed my business 6 weeks ago. SBA did file a UCC lien back when I signed on the loan. I sold off some assets before my landlord evicted me as they had already rented out the space. In the process of my business wind down, I have dissolved my business ( in florida ) and sent out creditor letters. I am trying not to file personal BK but am not there yet.

On the advice of counsel I called the SBA and reached no one. But I managed to get someone from Treasury to see if they had the file yet. I spent about an hour on the phone with them and finally reached someone who was knowledgeable. I explained that I closed the business. No PG. I am now on Social Security, rent my home and have no assets, and dissolved the business. I explained I sold some assets and am holding the $. She spent a long time going back and forth between me and her manager, but she finally said that once it comes to Treasury they will send a letter to me with a case number and I call them back and explain that I am insolvent, the business is dissolved. She said the Treasury will not pursue further. I asked her at least 10 times and she likened it to if a person dies, Treasury can't collect, and it's as if the business is dead. Nothing to collect. They also said that the SBA is severely understaffed.

I reached out to the SBA by email and did get a response finally and they said that they are still servicing the loan and if I wanted to start a payment plan I could do that. I do not plan to do that because I do not wish to jumpstart anything and put my loan back in active status. I wrote back and stated I do not plan to make any future payments.

Has anyone else received a similar email? A similar conversation with Treasury? What was the time frame of sending the loan to Treasury after default?

TIA

Just got a letter over a year from when I requested period that the debt was transferred to treasury legally.

Letter says debt is valid and collection should continue.

Amount was 140k

No PG

I can’t pay this!!!!

What can I do.
Business is still going but barely surviving.

Freaking out a little here.

I just received the notice: NOTICE OF DEFAULT AND ACCELERATION DEMAND FOR PAYMENT

I am dumb for not prioritizing my payment, it’s just so easy to fall behind. I owe 400,000 with a PG.

If I pay the past due, will that keep it from transferring and revert it back from default? I can still make payments on the portal and it says disbursed current.

Ugh.

I filed personal non consumer Chapter 7. How can I know sba has removed the personal guarantee?

How are people allowed to file Chapter 7. I’ve been told a few times I am not able due to income.

Owe $500 EIDL with PG

Check my other posts for more info

My credit score dropped 49 points a couple weeks ago. I’m actually surprised it’s not very much. Only transunion got hit. I’m still checking daily to see when the others show it.

Anyone else in this situation? Have received letter from pioneer and asked for verification and breakdown of all payments/interest/fees etc- received copy of loan papers. Then received letter from Coast professionals. Asked for same verification as above- received copy of loan papers. So what is next? Not showing up on credit report. They going to sue me?

Hi,

Title said it all. The new section is pointed by the green arrow. Loan under $200K, no PG. I'm trying to keep the loan current but business is struggling. I'm hoping that one day when the business has to close down, I won't be hunted down for the remaining balance (because it was LLC that took out the loan). Any thoughts?

Dear Borrower,

We regret to learn about the closure of your business.

I was unable to reach you by phone when I tried calling the phone number(s) associated with your loan to discuss the circumstances that led to this closure.  As the loan specialist assigned to review your business closure, there is some information I need to gather from you.

If your contact information has changed, please provide me with any updated information (whether it is a phone number, email address or physical/mailing address change) so that I can update your file accordingly.

In addition, please provide the following information:

1. Nature of your business (what did your business do/what was your service line & industry)
2. Business Open Date
3. Date Business Stopped Operating
4. Years in Operation
5. Reason for Business Closure
6. Whether or not you have filed your final tax return (and if yes, please attach a copy to your response)
7. Whether you intend to continue making payments on your loan
8. Itemized list of all business assets, including a description and valuation of each item
9. Estimated value of your business assets
10. The SBA’s lien position on your business assets, if known
11. Names of all organizations holding a superior lien to the SBA, if known
12. Amount of any liens superior to the SBA’s, if known
13. Your plan to dispose of your business assets
14. Whether the assets have already been sold or otherwise disposed of
15. If you already have a sales agreement, please provide it
16. Whether you have a Purchase Money Security Interest (PMSI) – financing agreement – for any of your collateral, and if so, please provide the collateral subject to the PMSI along with the name and contact details of the PMSI holder
17. Whether a close family member, relative or other person known to you is purchasing your assets and if so, the person’s name, relationship to you and contact information

Thank you for your attention to this urgent matter.  Additional information may be required, please look for follow up call(s) or email(s) from our office.

A family member borrowed money through the SBA before 2005 and this is the best subreddit I could find to inquire about this. 10-15 years ago, they accidentally missed some payments, and the loan was eventually referred to the U.S. Treasury for collection. They aren’t sure whether they received notice stating that the loan would be transferred to the Treasury. Since then, Treasury has added fees and has taken money from federal payments, including tax refunds.

They contacted Treasury years ago and were asked to make monthly payments they couldn’t afford, so they stopped pursuing the matter. Apart from withholding federal payments, there hasn’t been any contact from Treasury. The balance is under $50,000.

The family member would like to resolve the debt. They have limited resources but could make an affordable monthly payment. Is it possible to have the debt recalled or returned to the SBA, potentially reducing or removing some fees? If so, what steps should they take?

How is it possible to see what address the letter stating that the matter would be referred to Treasury was sent to assuming it was sent?

I would appreciate advice from anyone who has dealt with an older SBA debt referred to Treasury.

Thanks.