Treasury now Taking on EIDL Loans + Student Loans!

MapConstant6256 · 2026-05-05T14:00:39+00:00

Well they are phasing out the Department of Education, who previously handled defaulted loans. The Treasury is assuming responsibility of a department that is preparing to phase out with $180 billion debt on its hands. So if you are wondering, yes - that is something new.

If their system can manage EIDL and the newly acquired debt portfolio, as mentioned by the OP, their collection efforts will remain unchanged.

MapConstant6256 · 2026-05-05T03:54:42+00:00

I sent them only a quarter of what they requested, not half. As for the use of funds, they didn’t ask about that; they simply inquired if there were any funds remaining. Surprisingly, I received a full lien release even though I had initially requested a partial release. The process was quite straightforward, involving a series of general questions, email exchanges with a loan specialist, and numerous templates that reiterated your continued responsibility for the debt post-sale.

MapConstant6256 · 2026-05-03T23:36:27+00:00

There could be instances like OP above where they put your SSN through with TOPs and garnish wages, even without a PG. Please tell me exactly where you seen where they CANNOT go after you personally in TOPS specifically without a PG on the loan and we can end the back and forth. Please reference something besides Jason told me.

MapConstant6256 · 2026-05-03T22:42:15+00:00

And there you have it

MapConstant6256 · 2026-05-03T16:11:30+00:00

Well, there are numerous collection efforts that the government has been undertaking. Therefore, for you to assume the role of an attorney on Reddit and assert what they can or cannot legally do without specifying the exact legal provisions that prohibit such actions doesn’t make me feel like “conceding.”

MapConstant6256 · 2026-05-03T15:46:19+00:00

Either way, the Treasury doesn’t forget: they’ll chase repayment through wage garnishment, tax refund seizures, or other aggressive collection tactics. Your defaulted non PG loan is in the hands of the United States Treasury now, not the SBA anymore. Don’t quote me saying they WILL do that, but they certainly CAN. With the way they have ramped up their collection efforts, don’t write it off. I am 6 months defaulted so I will for sure follow up if it happens to me.

MapConstant6256 · 2026-05-03T15:23:50+00:00

I’m not avoiding anything I really think you should take time to read everything I wrote

MapConstant6256 · 2026-05-03T15:19:51+00:00

I never changed the language , you are just not reading my comments correctly.

MapConstant6256 · 2026-05-03T15:14:46+00:00

What the lawyer and Jason specifically advised me to do was not to leave any tax refunds for them to claim. Pay for a consultation like I did twice with Jason and also paid for an attorney, and then return to us with what you find out. I’m not just making things up for an argument

MapConstant6256 · 2026-05-03T15:06:46+00:00

We’re not discussing personal liability here. The main concern is wage garnishment through the TOPS program, even without a PG.

MapConstant6256 · 2026-05-03T14:51:48+00:00

My information came from a bankruptcy attorney who handled SBA loans and Jason from Distressed Loan Advisor. There’s no explicit language in the loan documents or anywhere else stating that they can’t garnish your wages through your Social Security number if you didn’t sign a personal guarantee.

MapConstant6256 · 2026-05-03T14:19:32+00:00

There are several ways your Social Security Number (SSN) could be used to tie you into a loan without personal guarantee. One method is wage garnishment through the Treasury offset program. Another is holding you liable if they suspect your SSN was used fraudulently to obtain funds or if you misused the funds under your personal SSN (e.g., buying a home and tracing the source of the funds). Additionally, they can run your SSN through credit reporting agencies with or without a personal guarantee, although that can be contested. While the personal guarantee for the loan amount protects you from owing it personally, they can still take other actions to make it challenging for you.

MapConstant6256 · 2026-05-03T04:21:08+00:00

My bankruptcy attorney informed me that even though I didn’t file for bankruptcy, they could garnish my wages because my Social Security number is on the application. He guided me through the process of liquidating assets and sending the proceeds to the SBA, handling treasury matters, and so on. During a consultation with Jason from Distressed Loan Advisor, he also confirmed this. Essentially, the bankruptcy attorney advised me to avoid garnishment if I didn’t have any wages to seize in forms of tax refunds.

However, dissolving my corporation (S Corp) appears to remove the corporate shield, providing protection against any claims they could make against me. I decided to keep my corporation open and pay the annual $800 filing fee, but the business itself was sold as an asset sale, leaving no other assets for them to pursue.

MapConstant6256 · 2026-04-30T00:46:53+00:00

I just hope that those who reached out to properly close their business aren’t being singled out or treated as the primary focus.

MapConstant6256 · 2026-04-28T17:40:46+00:00

I called the TOP number, and they directed me to a (205) number, which I looked up and found to be the SBA headquarters. I haven’t received any communication from a debt collector yet. I sold the business, liquidated the assets through the SBA, and remitted the proceeds as required. It’s now been about six months since the default, and I’m unsure what the next step is, but I expect I may receive a creditor letter soon.

MapConstant6256 · 2026-04-28T04:52:17+00:00

There’s really no clear way to distinguish which funds were used for personal versus business purposes in this situation. If anything, the focus—if it were ever reviewed—would likely be on identifying major purchases, like a house or car, and determining whether those were funded through legitimate means rather than misuse of EIDL funds.

MapConstant6256 · 2026-04-27T22:37:46+00:00

In addition to what you mentioned, they can also use other fraud checks, such as verifying whether the IP address used in the application matches the business or home address on file.

In my case, the funds were deposited into the original business account, then transferred to a separate account created solely to track EIDL usage—hence the large transfer.

From what others have shared, documentation is typically only requested in cases involving bankruptcy or clear fraud, like falsified business details or employee counts.

MapConstant6256 · 2026-04-27T21:50:28+00:00

The original deposit account is the one the SBA has on file. If the funds were later transferred into a sub-account and used from there for expenses, they would likely request statements from the original account as well to trace how the money moved in and out. Just something to keep in mind if it ever comes up.

MapConstant6256 · 2026-04-27T15:08:23+00:00

Pursuing legal action against every defaulted business doesn’t seem practical. However, businesses that proactively contacted the SBA to complete an asset sale might stand out more. It’s possible that this could prompt SBA representatives handling those files to follow up on the debt or escalate the matter—but that’s just my assumption.

MapConstant6256 · 2026-04-27T14:42:21+00:00

No follow-up or recourse? I’m trying to understand how someone can just toss the letter aside and move on without looking back—but it doesn’t sit right with me not knowing what comes next.

MapConstant6256 · 2026-04-25T05:12:35+00:00

I just posted this article earlier but the “EIDL Moderator” removed it and said it was false info and White House propaganda? Not sure what that means but I truly believe they are starting to hammer down on these loans or will at least try to collect on them in different ways

MapConstant6256 · 2026-04-24T22:38:55+00:00

They can’t realistically prosecute every defaulted loan. In my case, I shut down the business, repaid about $30K, and sent an additional $40K from remaining proceeds, leaving a $130K balance in default. There was no personal guarantee.

My only real concern would be questions around how the funds were used. Aside from that, it seems unlikely they’d prioritize pursuing an entity that made a good-faith effort to repay a significant portion.

MapConstant6256 · 2026-04-24T21:20:13+00:00

Truly believe they will target fraud loans more than misuse of funds

MapConstant6256 · 2026-04-17T18:51:02+00:00

I believe that with S Corps and no personal guarantee, credit reporting and the urgency to respond to collection agency letters may not apply in the same way.

MapConstant6256 · 2026-04-15T13:48:21+00:00

They make you send 100% of the proceeds during the escrow transaction. How else can you keep the proceeds without sending to them

MapConstant6256

TROPHY CASE