Phase 1 of 3
Overdue, and still cheap to fix
The options here are real, plentiful, and mostly free.
Nothing has been accelerated. Your lender — or SBA, on an EIDL — still wants a performing loan more than a fight. These are ordinary servicing tools, and you can ask for them yourself.
What are your options?
- Deferment. A pause. Interest keeps running, and on a 30-year EIDL that quietly builds a balloon at the far end.
- Reduced payments. Unfortunately, the COVID EIDL Hardship Accommodation Plan closed March 19, 2025. What replaced it is narrower: a one-time cut to 50% of the payment for six months.
- Modification. On a 7(a) SBA loan made through a bank, the lender has real latitude to re-amortize or extend without SBA sign-off in many cases.
Ask for relief
There’s no SBA form for this. It’s a phone call and a written request — to your 7(a) lender’s servicing department, or through your MySBA account on an EIDL. Put it in writing and keep the copy.
A big mistake. Borrowers stop paying and stop answering. Both are understandable and both are expensive. Nothing here requires you to have the money today — it requires you to be in the conversation. The 120-day line runs whether or not you’re talking to anyone.
The path ahead
Reduced-payment relief requires the loan be under 120 days past due and not charged off. Past that line, the easiest tool on the board is gone and you are in Phase 2, where the settlement rules change completely.
Now you know what to ask
Come with your phase, your loan number, your guaranty (or the fact that you don’t have one), and the last letter you received. That’s a first conversation worth having. Lakelaw is a bankruptcy boutique. David P. Leibowitz has practiced bankruptcy law for more than fifty-two years. The first conversation costs nothing and is confidential.
Schedule a free consultation or call 312-662-5750.
Attorney advertising material. General information about SBA loans, federal debt collection, and bankruptcy — not legal advice. Reading it creates no attorney-client relationship. Every case turns on its own documents and facts.
Nothing here is a promise, guarantee, or prediction about any result. Prior results do not guarantee a similar outcome. Bankruptcy relief is available only to those who qualify.
Federal regulations, SBA standard operating procedures, statutory debt limits, and collection practices change — sometimes on short notice, as the March 31, 2026 expiration of SBA’s servicing waiver demonstrates. Figures are current as of publication and should be verified before you rely on them.
© 2026 Law Offices of David P. Leibowitz, LLC. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.