Start Here1 · Overdue2 · At SBA3 · At TreasuryGuarantyBankruptcy

SBA Loans · 7(a) · 504 · EIDL

Where is your SBA loan right now?

Three phases. Two one-way doors.

Almost every option you have depends on one fact: which phase your loan is in. Most borrowers don’t know. Find yourself on the map, then read only the page that applies to you.

Why this is urgent in 2026Treasury’s waiver letting SBA keep servicing defaulted COVID EIDLs expired March 31, 2026. SBA then referred roughly 562,000 pandemic-era loans worth about $22 billion to Treasury and the Justice Department. If your loan was quietly delinquent for years, this is the year it stops being quiet.
The mapDoors open one way
Phase 1Overdue — not in defaultPayments are late. Nobody has accelerated. Your lender still wants a performing loan.Options here →Door 1 — the eligibility cliffReduced-payment relief requires the loan be under 120 days past due and not charged off. This door closes on a calendar, not a decision.Phase 2In default — at SBASBA owns the deficiency. Everyone asks about an Offer in Compromise here. It’s the right question with a hard answer.Options here →Door 2 — mandatory, and it does not swing backSBA must refer at 120–180 days delinquent. Once transferred, it generally cannot come back. A 28–30% fee attaches on the way through.Phase 3At TreasurySBA is out. Treasury garnishes wages and takes refunds without suing you first.Options here →
Applies at every phaseYour guarantyThe part that follows you home.What it means →The escape doorBankruptcyThe one thing that stops Door 2 — and reverses Phase 3.How it works →

Not sure which phase you’re in?

Two questions usually settle it. Has anyone accelerated the loan or demanded the full balance? If no, you’re in Phase 1. Has your balance suddenly jumped by about a third, or has a letter arrived from the Bureau of the Fiscal Service? If yes, you’re in Phase 3. Everything in between is Phase 2.

ContinueStart here →Phase 1 — Overdue, not in defaultThe earliest phase, where the most options are still open. If nobody has accelerated your loan, begin here.Or go straight to your phasePhase 2 — In default, at SBAPhase 3 — At TreasuryYour personal guarantyBankruptcy

For further information and details on SBA loan relief, see our SBA loans overview →

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.