I’d like to share an email that I received from a listener about her EIDL loan. She says that she got an EIDL loan, closed her business, and it was dissolved through the Secretary of State as well. Closed the business bank accounts and she also had to file personal bankruptcy.
The SBA loan has been a huge question of mine, causing me not to sleep at night as the notices are now coming in that it’s time to pay. She says her loan was $23,000 and her bankruptcy attorney said that he didn’t believe anything would happen.
Her accountant on the other hand said she wasn’t sure that she’s heard of people going to jail over these loans, but it’s only $23,000, so I think I might be okay. She wants to know what I think will happen. She also said that she was concerned that they might take a tax refund.
First off, as I mentioned in my prior video, just had a call with the SBA office in South Carolina and it doesn't sound like anything is penetrating out to those regional state offices about EIDL loans yet. So that tells me that I really don't think the SBA has a plan yet and how they're going to handle all these businesses that have closed and the loan defaults.
Secondly, yes, it is true that if you owe a debt that eventually it can pass through to other government organizations and they can try to offset. If 20 years ago you had a bad loan, you might eventually see that it's coming back and they're, offsetting your tax refunds based on that.
Now, I will tell you that's a super rare case and I have not seen any of those in a really long time. Also, we all know the speed at which the IRS works and anything in our government, which is very slow. So it will be many, many years to come, in my opinion, before we see any kind of offsetting of debts if there is going to be.
Third, she mentioned her accountant said, you might go to jail. Nobody's going to jail for this kind of alarm. The people that you see in the media who are going to jail are high profile celebrities and people who took millions of dollars and went out and bought Bentley's and went on extravagant trip trips and bought a lot of possessions.
Your average Joe business owner does not need to worry about going to jail over this unless you have fraudulently take money in these programs. And for that, honestly, you need other cases. You don't need an accountant, you need a lawyer.
Business issues have happened for years and years. It’s never easy, it’s never fun, but they do work themselves out. So I want you to put your head on your pillow, take a nice sleep tonight and don’t worry that you’re gonna go to jail over $23,000 in this case.
Again, if you took out a $5 million loan and you have a Bentley outside and a fancy house and you took a lot of vacations, you might wanna ring up your attorney. But I think that’s far and few between from our listeners who are viewing this and truly trying to figure out the best circumstance to make this loan and their business default via palatable option so they can move on.
So I will continue to keep you posted. If you have questions about an EIDL loan that you would like us to record a video about, please don’t hesitate to send those in.
Just as a reminder, we’re not doing any consulting or work on trying to remove loans, but as a public service we are keeping everybody abreast of what we hear and as soon as we know something new we will post another video.
So please make sure to subscribe and continue to follow us. For the latest and greatest.
For additional read: I Can’t Pay My #EIDL Loan, Now What?
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Donna Bordeaux, CPA with PYOPAccounting.com
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA, as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.
