Discharging PPP or EIDL Loans in Bankruptcy

In this video, I'm going to talk to you about bankruptcy as it relates to government loans during COVID. Hi there. This is Josh Sternberg coming at you from Sternberg Law Group. Nice to see everybody, all my homeowners. The most common government loans during COVID were PPP loans and EIDL loans. PPP loans had a lot of forgiveness, meaning you might've already got this loan forgiven and the EIDL loans did not. The EIDL loans were typically more loans that the government expected repayment on. So we're getting a lot of calls for people who borrowed money from the government during COVID and now are having a hard time paying that money back. The best example I can give you on an EIDL loan is they borrowed money. Let's say they borrowed $250,000 from the government during COVID. They signed a personal guarantee and now the government is coming after them saying you haven't paid your loan. This is a good case for a bankruptcy. Okay. Let me pause there. This is very important. All of your other factors need to be included in filing a bankruptcy. For example, how much money do you have? Do you own a home? Does it have equity? Do you own a business? How much money do you make? All of these different factors determine whether or not you can file bankruptcy. The purpose is this video is I want to get across to people that these debts, the PPP loan and the EIDL loan, the COVID government assistance loans are dischargeable in bankruptcy, even if you signed a personal guarantee. So a lot of people are assuming that these loans are not dischargeable because it's government debt. And they're used to being told if you owe the government money, you can't discharge it. Maybe they heard about that through the IRS franchise tax board or getting things like parking tickets, and they say, you know what, you still have to pay the government, but these loans, a lot of them, if not all of them were done through the SBA, the small business administration, and if you have a personal guarantee, a PG, you can still discharge it through bankruptcy, but you have to go through the proper intake and understanding of whether you do qualify for bankruptcy, and if so, what your bankruptcy is going to look like. I'll give you a quick example. I had a woman who was a business owner, a small business owner. She borrowed something like $400,000 from the government and her business went under. Now the government is coming after her for that EIDL loan. And she says, I don't know what to do. I don't have my business. I don't have money in the bank. I basically have very little. So we said, no problem. We filed a chapter seven bankruptcy for her. We got her a chapter seven discharge, and now she no longer owes that $400,000 to the government. The business is closed, so the government can't go after the business. The individual filed bankruptcy, so the government can't go after the individual. If both entities, the business entity and the individual entity are now protected, one, because the business closed, two, because of the chapter seven bankruptcy, that debt is discharged and she can now move on with her life and get a fresh start without having that $400,000 EIDL loan hanging over her head. So again, from this video, understand these government loans are dischargeable, but you need to speak to a bankruptcy attorney and determine what your qualifications are, because it's the same qualifications as any bankruptcy analysis, how much debt do you have? How much money do you make? Do you qualify? Okay. So feel free to contact us, Sternberg Law Group. My name is Josh Sternberg from Sternberg Law Group. Hope this video helps. Any questions? Feel free to drop them in the comments. Please like and subscribe. Thank you very much.