Today’s lesson is more about what NOT to do. My client contacted me about a month after he got the letter. That was his first mistake – – being extremely casual, or perhaps the right word is aloof. Whatever you want to call it, he was not showing a whole lot of concern or urgency when it came to assembling the documentation for his Offer In Compromise. I’d ask for info, and a week would go by. I’d ask again, more time would go by. I eventually gave him a deadline, telling him that I did not want to rush at the last minute. Of course, that’s exactly what happened. We went on to submit the OIC on the 60th day from the date on the letter. The next day, I got an email saying that they opened the package and it was the 61st day, and she would need to check with the loan specialist to see if they would even consider the settlement offer. UH OH, here we go.
We never did hear back about the whole 60 day issue, so I followed up a week later to inquire. Less than an hour later, I got an email. They had declined the OIC. Hmmmm. That’s fishy. A process that normally takes 3 to 6 weeks was shortened to a week. Why? My theory is pretty simple: the people who make the decisions behind the curtain were annoyed that we submitted on the 60th day, and rather than deal with it, they could just push it over to Treasury and have one less file to deal with.
So here we are, now trying to figure out what the heck just happened. Were the settlement offers really declined for the typical boiler plate reasons? Is this the result of my client’s apathy toward the process coming back to bite him in the behind? Hard to know for sure. What I do know for sure is this: it’s always a bad idea to wait to the last possible minute when it comes to settling your SBA debt. I’ve written this a lot over the last 7 years, but it bears repeating one more time: the worst thing you can do when it comes to trying to settle an SBA loan is to bury your head in the sand. What could have been a very positive outcome has become who lot more complicated now that the SBA had washed their hands of the file. And by complicated, I mean “likely never to settle”.
So now we are scrambling, grasping at straws in terms of how to handle the situation. It didn’t have to be this way. He had a decent chance to settle. Now? It’s going to be an uphill battle.