Hello, In early 2006 I received a disater SBA loan due to Hurrican Katrina. In the late summer of 2008, I got behind on my payments. I then called SBA to ask if there was a payment plan I can get on to be able to catch up with the late payments and I was told no. In October 2008 I received a phone call from a collection agency regarding my delinquent loan. I asked her if there were payment plans and she gave me 3 options. All of the options required a large down payment (the smallest being $7500) with monthly notes. I told her that I was not able to do that, but I could pay $400 a month. She then told me that those were my only options and that was it. In December 2008, I received a packet in the mail from the collection agency asking me to list out all of my monthly expenses. I did that and faxed it in. In January 2009, I called to see what the outcome was of that and I was told that "that was really nothing", just information they needed to keep on file. I asked the lady (my case was given to another agent) what are my options now and she told me the same 3 that were given to me back in October. About 3 weeks ago I received a letter in the mail from the collection agency stating that they were going to start the process to have my wages garnished by taking up to 15% of my salary. In the meantime, I filed my 2008 taxes, and I was just informed that I will not be getting my refund because it has been applied to my debt. My question is can they take my whole income tax refund and garnish my wages for the whole amount of the loan or could they have just taken what was past due? I appreciate any help.
Thanks,

I have been in the same situation! I have not finished with rebuilding my life. I just wrote several letters that I am about to mail out to whoever will listen. The government can bail out all of these corporations and "forgive" their debt but cannot forgive our loans when we lost everything in Katrina! Email me if you have any new ideas for me, and I will let you know who I have been sending letters to.! [email protected]

My situation is similar. Only I called the SBA prior to my loan falling far behind and I requested an unemployment deferment of some sort. I was mailed a Repayment of Terms form and letter with additional information to send back. I filled out the form and sent the required documents. On my repayment of terms form I indicated that I believe I would be able to start paying back on my loan in December 2009. Instead of my loan being deferred. It was SENT TO COLLECTIONS! This is sad. Something needs to be done. The public needs to know about this. Most especially if they receive a "Disaster" loan and become unemployed. The loan has the right name. It is a disaster.