This question seems to come up a lot, so I figured that it's time to address it with an article. The best way to answer the question is this way: In bankruptcy, SBA guaranteed debt is treated like any other debt. It gets no special treatment because it carries an SBA guarantee. In many cases, the fact that the loan is SBA guaranteed never enters the equation. Why? Because when someone files for BK protection, they are required to create a list of creditors, which is a list of everyone they owe money to. So when a debtor lists their SBA loan, they don't list the SBA as a creditor, they list the originating lender. In order words, if I have an SBA guaranteed loan from the Bank of Jason Tees, then I list The Bank of Jason Tees as the creditors, …show more content…
Let's keep in mind that when I say that an SBA loan can be discharged, I'm mainly talking about unsecured debt. If you owe money on an SBA loan and that loan is secured with real estate or some other valuable assets, filing for bankruptcy will not get you off the hook. In many cases, the lender just needs to prove to the court that there is value in the assets, and the court will allow the lender to go ahead and foreclose. The point here? Bankruptcy is not a "cure all" solution to working out your SBA debt issues.
The only way that I've seen an SBA not get discharged was when fraud was suspected. In those situations, the banks actually filed something called a "non-dischargeability action", claiming that the loan was made under false pretenses. In most cases, the bank claims that the borrower lied on the loan application, and that had the borrower told the truth, the bank would not have granted the loan. Interestingly, all the attorneys I've spoken to about this tell me that proving fraud can be difficult and costly for the lender, especially if the borrower claims that someone else signed the loan application on their
An SBA business loan is one of the most popular methods of funding a small business. Basically, this type of loan offers banks a guarantee on any small business loan, giving banks more reason to approve the loan.
Corporations that have become insolvent can try to avoid bankruptcy and receivership by reorganizing their finances. The Bankruptcy and Insolvency Act deals with reorganizations and another federal statute, the Companies' Creditors Arrangement Act, may offer relief to some corporations. Some of Canada's biggest news stories of the past few years have concerned the attempts of major Canadian
With the economy going today some, if not many, businesses are going under, being liquidated, or going out of business. But how do big or small business end their enterprises? Or even allocate any resources they have to repay any debt? What procedures does a company go through to let their lenders know they have no income or sales/revenue to pay off the bills? Questions like this spark my interest to get a better understanding of how do businesses like Ashley Furniture or General Motors (GM) use their assets to attempt to pay off their creditors and any other liabilities. But what does bankruptcy mean in the business world? What are some of the paths of bankruptcy? What are the pros and cons of being bankrupt?
Employers consider a degree necessary for getting a job at their company. However, not many people can afford college. The solution is to take out loans, then college becomes affordable. These loans create a whole different issue, student loan debt. This can affect people their whole lifetime and has been happening for years upon years. But, in the more recent years America is starting to shed more light onto the issue and are becoming curious on why colleges charge twenty five thousand dollars, or more, for a year of education. Many different countries offer free college, but in America student loan debt keeps getting worse.
Personal Finance Essay Many students in today’s world believe they need to take out student loans for college. I believe you don’t have to take that path. Student loans are hurting many students who attend jcollege, and I believe that the loans should stop. Any student can get through college and be debt free at the end.
Attending college has changed quite a lot throughout the years. When it first arose, it was only accessible to the wealthy, and it was unheard of for everyone else. Only a few decades ago a bachelor degree could almost guarantee a comfortable job, and it was another advantage to any resume. In our current times, many students struggle and are unable to go to college due to the rising price tag that is not showing any signs of slowing down. A college degree is what most employers look for now-a-days, making it more essential than ever before. Unfortunately, it is becoming increasingly difficult to attain one. College tuition and fees should be lowered because 1) student loan debt is crippling for college graduates, 2) lower tuition will increase the accessibility of education, and 3) regulated tuition would lead to a
"There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it." This is one of Mitt Romneys famous quotes. The scary part about this quote is that he is right. About half of our country is dependent upon government assistance, and some are passing this way of life on to their many children. This is the main problem, if the future generations begin to think this is a good way of life our government will crash, again. Government assistance is a problem due to the fact that; there is no incentive to work, people get handed money with no enforced restrictions, and there is no constant supervision for people, “needing” this assistance.
Numerous amounts of people have financial problems when they get out of high school, so what should the school board do? In 2007, thirty-four out of fifty states have personal finance courses in their curriculum (Bernard 4). A financial literacy course seems to be what a majority of states are doing. Financial literacy courses have their pros and their cons just like everything else. Financial literacy courses bring up some very important questions.
High school seniors takes deep breaths and parade onto the stage. The beginning of a new chapter awaits as they make the journey from one point of the stage to the end. They reflect on what they have been taught in those many years of high school. The most terrifying fact while graduating high school is the next step: making it on their own. Because they have taken part in the appropriate classes, the students are certain that they have gained the correct knowledge to begin making their mark on the world. In high school, it is crucial to achieve the appropriate classes in order to feel ready to take on the world ahead as an adult. However, many students lack proper education. One key example is financial literacy. Financial literacy is the
A mortgage is a form of debt, secured by the warranty of a specific real estate property. The borrower is required to pay back the debt in predetermined payments. The most common reason for acquiring a mortgage is to purchase real estate when it cannot be paid for up front. The homebuyer, in a residential mortgage, pledges their home to the bank. Over a period of years, the borrower pays back the loan with interest. Once the mortgage is paid in entirety, the owner retains the property free of any charges. However, in case of foreclosure, the bank has an entitlement on the house, as a form of insurance should the buyer default on repaying the mortgage. The bank can then sell the house, and use the capital to pay back the remaining mortgage.
...credit accessibility, borrowing costs and product alternatives (Taylor, 2009: 144). Furthermore, it is essential to keep in mind that in order for this entire process to function fully the SPV has to be bankruptcy remote from the bank and vice versa. Whereas, if this appeared not to be the situation, this means that the risk has not been shifted completely and the bank is yet left with some sort of liability. Nonetheless, in the period of financial crisis, the case was that an SPV may be bankruptcy remote from the bank, and the bank may decide to secure its status by backing up the vehicle either by purchasing again the securitised assets or by prolonging its loans in the occasion of a funding turmoil. This might be a selected choice in situations where the bank decides to over-securitise in the coming future for the sake of maintaining the securitization approach.
The U.S. government requires workers to make regular payments to a government fund which is used to make payments to people who are unable to work because they are old, disabled, or retired. Social Security checks can be collected later in life after you have contributed to the system and earned credits. In 2016, you get one credit for every $1,260 you earn (that figure is adjusted higher each year), up to a limit of four credits per year. These credits remain on your record even if you change jobs or stop working for a while. The Social Security Administration (SSA) mails out a summary of your benefits each year, about three months before your birthday to ensure you are update on your status.
Home loans, or mortgages, use a borrower's home for collateral. This home can be a single-family house up to four-unit property, as well as condominium or cooperative unit. Lenders fund home loan, but both the lender themselves and broker who act on behalf of the lenders originate.
An important term that is cropping up everywhere nowadays is “Microfinance”. It is important for every person interested in the field of finance to be aware of this term, as in the coming days Microfinance is expected to be one of the brightest and the most appealing sector of the Indian Economy.
...ower to wait a year or before to start to make the repayment. Somehow, some loans can be repaid at the end of the period instead of instalments. Besides, security, for example some assets and the properties of the business, is needed for the bank loan. There are three advantages in the bank loan. First, the timing and the amount of the repayment is known when getting the bank loan, so it is quite easy to budget. Second, there is also a repayment holiday, so the repayment schedule is quite flexibility. Third, the interest rates can be discussed and it can be lower than the overdraft. However, it is because the business loan is a long-term commitment, which is needed to service and this will be to high interest rate. Besides, security such as the house of the business owner is needed and this will not be good to the owner if the business is failed. (Cox, Fardon, 2009)