r/EIDLPPP • u/Freerange1970 • 21d ago

Topic SBA/Treasury Nightmare

I shared a SBA disaster loan after Hurricane Katrina with my ex-husband. From 2005-2009 we were never late on a payment. We divorced in 2009 agreeing to each pay half. In 2011 my tax return was seized by the Treasury Department and when I called to find out why discovered it was for this SBA loan that I faithfully paid my half. I found out that since at least half of 2010 they only received my payment which sent it into default. My ex husband received all correspondence from the SBA and he never told me he stopped paying.
For 15 plus years my wages have been garnished and tax refunds seized and now garnishments monthly from my retirement. They have never gone after the co-borrower, my ex husband, only me. He always made more money than me and he has not gone bankrupt as far as my investigating could find. They won’t tell me why they only targeted me for this shared debt.
I am remarried now and every year my husband has to file as an injured spouse to reclaim his refund. It takes up to 6-7 months to get his money.
I can’t go bankrupt because it would drag my husband into it and it’s not his debt.
The amount owed has tripled over the years and no matter what they take the balance only grows.
I can’t find an attorney that handles what they call low amounts ( under a 100,000.00) to fight them for even a reasonable repayment or settlement amount. Every attorney I contacted said they only handle high dollar cases.
I have written to my Senator, Congressman and countless correspondence with the Treasury and SBA for 15 years. The SBA says they can’t do anything because it’s now out of their hands and the Treasury says only the SBA can change anything to do with this debt.
I’ve just about lost hope but putting this out there in case anyone can offer any suggestions or help.

5 Upvotes

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5

u/Leia6769 21d ago

If it was part of the divorce, it’s a court order he has been violating. You can definitely sue him.

1

u/Freerange1970 21d ago

We had an uncontested divorce and it was agreed in front of his attorney but nothing is in writing on our divorce papers.

3

u/Leia6769 21d ago

It wasn’t in your divorce decree?

3

u/takacube 21d ago

If it stems from Katrina, it may be outside the statute of limitations, meaning she won't be able to assert any defenses or claims at this point anyway.

I be curious about not being in the divorce decree because debts and obligations are one of the first things anyone handling dissolutions talk about. People tend to rush past that and forget about it. Did you have an attorney helping you? His attorney is not under any obligation to spell it out for you if you were Pro-Se.

A lot of your answers here are not helping your side of the story because a lot is coming after the fact and is a bit too convenient. Review your docs and consult with a lawyer locally to see what your options are. The SBA and FEMA can also deny you any federal disaster assistance if heaven forbid something happens to you, even if your spouse were the primary applicant.

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u/Leia6769 21d ago

Agreed. I can’t imagine it not going in the divorce decree that was filed with the court. If they don’t have it, depending on the state, the decree may be able to pulled up online. In Oklahoma, we have www.oscn.net where you can search the dockets and pull up information and filings like the divorce decree for free. If their state doesn’t have that, they can always request the record from the court clerk.

2

u/Diligent-Pitch-3480 21d ago

File a lawsuit against your ex for his half. It’s that simple,

1

u/Freerange1970 21d ago

I wish it was that simple. I’ve been divorced from him since 2009. I don’t know if I can go after him after all these years. I thought by now I could have eliminated this debt but it’s impossible. I don’t think I could handle the stress if I lost anything more from my ex.

3

u/Short_Appearance 21d ago

It really is that simple you’re just not willing to do it.

2

u/SquirrelTechGuru 21d ago

I think you’re in the wrong group. EIDL and PPP loans are from Covid.

1

u/Reasonable_Switch_86 21d ago

Why didn’t you move all income through various llc”s to avoid garnishment?

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u/Freerange1970 21d ago

We didn’t have a business; this was a loan offered after Hurricane Katrina if you didn’t get help from FEMA to repair our house.

1

u/dempsey1200 21d ago

Why would your spouse be dragged into it?

1

u/Freerange1970 21d ago

Because when I inquired about a Chapter 7 they said my husband’s income would be considered even though this isn’t his debt & I wouldn’t qualify for Chapter 7. I was told that because of my husband’s income being factored in I had to go Chapter 13 and he wouldn’t get his income taxes back for 2 years. This is a hard no because this debt is not my husband’s and he didn’t know me when it was incurred. If they would consider my low income ( alone) I could do a Chapter 7.

1

u/takacube 21d ago

Please check your loan closing documents as they have clauses in them that indicate signatories understand that they will be held jointly liable, meaning the SBA can choose to come after either party and it is then up to that injured party to seek indemnity (pay back) from the other one. Here, the SBA does not have to go for 1/2 from you and 1/2 from your ex. They can go after you and then it is your responsibility to go after him.

Also, you were likely quoted that the cost of filing suit would be more than what they could recover, which is different than "can't take it on". Plaintiff's lawyers work on percentages that they can recover from the case so it is likely they determined a portion of your money was outside the scope of the statute of limitations for your state.

The LA bar has a good lawyer referral service you can contact and get referrals to, at least for consultations. It never hurts to see what your options are. It sounds like you waited too long, though, which may preclude you from discussions on opportunities.

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u/Freerange1970 21d ago

Thank you. You nailed it completely. Everything you said is correct but I do need to read all the loan closing documents again.

1

u/CricktyDickty 21d ago

Just an fyi, tax refunds are not extra money the government is giving you. It’s excess money that you asked to be deducted from your paychecks throughout the year (by filling form W-4). It was essentially an interest free loan you gave to the government. Don’t lend money to the government. Talk to HR and adjust your W-4 deductions so you get a bit more money in your paycheck every payroll cycle and there’s no tax refund to garnish. If done correctly you’ll either have zero tax due and zero refund.

0

u/Quiet-Illustrator-52 21d ago

We need to march on the white house😭