Capital One SBA Charge Off

Well... no personal experiences to share with you Dan. However, what I can say is that you should try to negotiate with the original creditor and ask him to withdraw the account from the collection agency. It is always better to contact your original creditor and negotiate with them for a lower payment plan. If you can convince your original creditor to withdraw the account from collections, things will be easier for you.

Thanks. I have heard they generally place these with an aggressive collector. This was just charged off 12-31 so I guess it will take some time. Any other experiences???

Dan,
Allowing an SBA loan to charge off removes options.
How long has the account gone unpaid?
What was the loan payment prior to default?
What would you be able to conservatively pay monthly now?
Do you have P&L's to substantiate the loss in revenue?

I have followed your journey by reading many of your posts, so I assume you have already been communicating with creditor/assignees. What has been the most recent dialogue?

Hi. I did not want it to charge off and only needed a six-month period to get it current. But Capital One is such a bureaucracy that I could not even get anyone to discuss it with me. I could show them the money in another 2 months to bring it current, but they would not let me get to anyone who would discuss any options. It was moronic, to say the least. Fact is, now it is charged off. Payment was $1600/month and I made the first 3 years without a late payment. Now I could pay $1000/month. The business has very little asset value, so it is my personal guarantee that is the problem. And thanks to the settlements, I am almost worth going after that now. I can show any p/l's they would like.

The only information I have been able to find is another party in a similar situation that was assigned to an "aggressive" collector. I am considering hiring an sba workout consultant, but the one I contacted has no specific knowledge of Capital One---which I find disturbing.

Any ideas or information appreciated...

Okay.

Here is the rub:
Providing SBA loans like CapOne has done requires following a prescribed process with not much room for creativity.
Similarly, servicing the loan has requirements as does work out arrangements and liquidating.

CapOne may have missed some things along the way (like trying to rehab with you). I would suggest the following:

First:
Contact your regional SBA Servicing center and speak with a loan officer about your situation. You should not hold back with details, but provide only the parts that will support your prior inability to pay and that you have ability now to the tune of 1k-ish a month leaving out how much other debt you settled at the cost of not paying them (though you may comment that all debt suffered during your downturn and you have made arrangements whenever possible). Spend the necessary amount of time highlighting CapOne brick wall response to your inquiry of your options along the way and that at no time were you made aware of re-aging and other payment options during your financial set backs. You were met with pay to current only.

You are not in a position to bring the loan current but are looking for a way to rehabilitate. Then listen.

Take action on the feedback you receive.

Because the loan is charged off it may currently be set for liquidation. If it has been liquidated the settlement/payment options you are already aware of come into play. Your loan was likely pooled to investors and the gov is on the hook. You can find gov backed debt to be a different monster than working out plans for non gov backed debt. Example would be withholding tax refund.

I do not know what part of the country you are in, here are contact points for 2 service centers covering different regions of the country:

Fresno Commercial Loan Service Center
2719 N Air Fresno Drive, #107Fresno CA 93727
Tel: 559 487-5136 Fax: 559-487-5803
General e-mail: [email]fsc.servicing@sba.gov[/email]

Little Rock Commercial Loan Service Center
2121 Riverfront #100
Little Rock, AR 72202
Tel. 501-324-5871Fax: 501-324-6072
General e-mail: [email]lrsc.servicing@sba.gov[/email]

Without your specific loan number and social or having you sitting in front of me I am unable to inquire about your options, but you will likely hear the same thing I or any consultant would have.

I suppose if you wanted to familiarize yourself again with what it feels like to hit a brick wall you could call the bus loan dep at capone.

If you care to you may even want to:
Call the office of the Director of SBA Risk Management in DC:
Janet Tasker, Director, Office of Risk Management at 202-205-6657

Depending on the outcome of your efforts, formalize written complaints to SBA and the OCC (focusing on lack of response from CapOne)


Best of luck,

SBA regulations previously proscribed settlements with a going business and FDIC requirements for troubled debt restructuring classification and reporting have made Banks more reluctant to enter into loan modifications. Hence Capital One probably doesnt want to expend resources on a small loan where the workout period could be long.

SBA cash settlement compromise os possible but it is a long road filled with paper

SBA sends the cases to Treasury and Treasury sends them to private collection agencies after chargeoff. I have found the collection agencies difficult to work with evern from the position as a Banker on their side of the matter

Not a good menu of options.

If you send a certified letter to Cap One (copy to SBA Hearndon offering to work out and stating you are getting no response you'll get some action as Cap One doesnt want to seem unresponsive in front of SBA

Good luck

Thank you for the information. The workout I am offering is a monthly payment of $1000 until satisfied, in lieu of my prior payment of $1500~. I had offered that to Capital One on the phone and further offered to get current in March, 2011, with a bonus I received. They did not entertain anything other than "if you don't give us $5000 it will charge off". And they were correct. I paid $3200 instead and they still charged it off.

I have a question to you, though. Is it true that they only settle if the business is liquidated? I do not plan on doing that and will be paying it back out of cash flow/profit. If they liquidated the business, they would get nothing.

Well, I spent countless hours fretting over this one. I really thought the sba was going to take my business and I would be jobless. But after all of that, I was able to settle this. I guess technically it is not a settlement--rather a workout, because it is settled over time, rather than in lump sum. With the help of a talented debt settlement professional, we were able to reach terms with the sba and capone that allow me to pay the balance in full, at a reduced payment of $1000/month without any interest charges. This amounts to a 40-50% settlement if on a cash basis, at the interest rate I would have continued to pay but now will not have to.

So, in the end, charge off was a good thing and not the end of the world as some web-based sba consultants led me to believe. I am certainly glad I did not listen to either of them.

Should anyone want the contact information for the debt settlement consultant who I could not speak more highly of, please feel free to pm. I don't believe the forum rules allow me to post, but with the fine results and professionalism that this man exhibited, I am very comfortable with referring him. dtm.

You should post a sticky offering that info. It will get lost at the end of this thread and I think a lot of people could use it in the future! I don't think it would violate the TOS if you only said to PM you.