SBA Loan question

[Uncle]

I am awaiting discharge on my chapter 7 case. I own an LLC that is responsible for an SBA loan with a balance around $10,000. The business has no assets. I included the loan in the codebtor section of my petition. I don't want to keep the business, and obviously do not want to pay the loan if I don't have to.

Is the answer to dissolve the LLC? What are the consequences of not paying the loan. One person told me I wouldn't be able to get another SBA loan if I default. Any other things i should consider?

Any good advice is appreciated.

[HHM]

That's pretty much it. So long as you are getting out of business and you have filed personal BK, the loan is pretty much dead. I would send a notice to the bank that is servicing the SBA loan that you are closing the business (include the articles of dissolution) and a notice of your BK filing. That will pretty much be the end of it.

[JackBondLove]

I defaulted on an SBA loan as well. It seemed to be directly through the SBA (it was a personal disaster loan) however. I was told that I would not be eligible for another SBA loan until I had paid back that loan. Also, if at any time the federal government were to owe me anything (which would include a tax refund!), it would be able to garnish that amount to help pay back the loan. Social Security benefits are similarly garnishable within 10 years.

[Uncle]

Jack,

Did you include your loan in bankruptcy? Was your loan in your name or a business entity?

[JackBondLove]

It was in my name; it was a personal loan, not a business loan.

[TBA]

Are you sure you didnt "allow" them to put a lien against your residence to back the loan? it is almost always a requirement that they do this.