2026 Best Business Debt Settlement Lawyers in Fresno

Best Business Debt Settlement Lawyers in Fresno for 2026

For an SBA EIDL loan default, the best lawyer for you will be one licensed in California who regularly handles these issues, and ideally one who’s a certified bankruptcy specialist under State Bar rules. Get your fee in writing, and do it before the loan hits the Treasury.

A Defaulted EIDL Loan

The SBA’s in-house authority over defaulted loans expired on March 31, 2026, at which point about 500,000 loans totaling around $22 billion were referred to Treasury. If your debt is sent to Treasury, you should expect a letter in the mail, and your options narrow the longer you wait. Most COVID-era EIDLs are on a 30-year term and an interest rate of 3.75%, with about a 30-month deferment. However, interest accrued, so many owe more than they borrowed when repayment begins. Your first step: check your loan’s status.

The timeline for missed payments begins when your first month’s payment is overdue. From day one to day 90, the SBA considers your loan delinquent, typically sends you notices, and it’s often the best time to propose a repayment plan. From days 91-120, your loan typically gets a charge-off status, and you’ll receive a final demand letter for payment. Once 121 days have elapsed, your loan will generally be referred to the Treasury for collection. If Treasury has your defaulted debt, they can do a lot without going to court. Tax refunds and Social Security can be offset, and wages can be garnished, commonly up to 15% of disposable income. Treasury typically adds a 28-32% collection fee to your balance. Last but not least, your credit reports usually take a big hit. Once your defaulted SBA loan is at Treasury, some options you might have had before, like an Offer in Compromise or dealing directly with the SBA, are usually no longer available. It’s important to note that not all loans were sent only to Treasury; some ended up with the Justice Department.

The first question a lawyer will ask you about a defaulted EIDL loan is whether you signed a personal guarantee. Loans of $200,000 or less generally didn’t require one, but loans over $200,000 generally required it from those owning at least 20% of the business. Even if your business closes, the personal guarantee can follow you. The signed loan papers are the last word, too, not something someone “might have said” during the loan process. Loans above $25,000 generally have a UCC-1 lien on your business assets as well. A lien and a guarantee differ in important ways. A mid-sized loan might have an SBA lien on your business assets but have no personal guarantee. On the other hand, if your loan was referred to Treasury, you could lose tax refunds and Social Security even if you never signed a personal guarantee.

For those who can still pay something, the SBA has a temporary relief program that halves your payments for six months. Interest keeps accruing, and the principal is not reduced. You can do it once every five years. If full repayment isn’t realistic, consider making an “Offer in Compromise” on SBA Forms 1150 and 770. You typically have to show the business has closed, the collateral has been sold, and you don’t have the income to pay. Your offer gets submitted under penalty of perjury and should be reviewed by a lawyer.

Personal Bankruptcy

Bankruptcy shouldn’t be your first choice but is often the last resort. The chapters worth analyzing are Chapter 7, 13, and Subchapter V, which is for business debts up to $3,424,000. Filing creates an automatic stay that stops Treasury collection while the case is open. In some circumstances, the court may discharge some debts, including some that are guaranteed. If you are considering a personal bankruptcy with an SBA personal guarantee, understand the business will still be liable, and the SBA may pursue business assets even if your personal liability ends. A Chapter 7 bankruptcy starts with a court filing fee of $338. A qualified bankruptcy lawyer can tell you if the possible benefits outweigh the cost.

Something most people don’t know about SBA lawsuits is that they have a time limit, but the SBA can still keep collecting through federal payment offsets indefinitely. Not all old business debt is SBA debt. In California, creditors generally have four years to sue you on a written contract. Also, the Rosenthal Act now extends some protections to personal guarantors on commercial debts of up to $500,000 that were made, renewed, sold or assigned on or after July 1, 2025.

How You Vet a Fresno Lawyer

Google searches aren’t how you vet a Fresno lawyer; the California State Bar has an online Attorney Search showing if they’re in good standing and have ever been disciplined. Sadly, practice areas are self-listed and not checked, and only a certified specialist title is verified. For those wanting to talk over their case affordably, the Fresno County Bar Association’s Attorney Referral Service charged a non-refundable $50 for up to 30 minutes in 2025, but it’s best to double-check, as things change.

In California, your lawyer needs a written contract for a big job -- generally, more than a thousand dollars. It must be signed by you and them. If your lawyer skips this rule, it’s possible to get out of the contract and be charged a reasonable amount only. One exception to the rule for written contracts: it doesn’t apply if the client is a corporation. However, if your business is incorporated, it’s still smart to ask for terms in writing anyway.

Whatever you pay your lawyer, if you settle debt you could be getting a tax bill after a write-down or forgiveness. The IRS says that, generally speaking, the debt you didn’t pay gets counted as taxable income. The creditor might send you a 1099-C tax form to report this. Some, but not all, people can exclude the tax if they’re bankrupt or insolvent at the time of forgiveness. That exclusion goes on Form 982.

Above all, be suspicious of anyone promising forgiveness or a sure outcome for an upfront fee. EIDL loans are not forgivable. As well, if you plan to sell business assets, always check in with the SBA first. It likely has a lien on your business assets to secure repayment.

With defaulting EIDL loans, calling a lawyer for advice is a good idea under a few conditions. Either your loan is over $200,000, you signed a guarantee, Treasury is sending you collection notices, or you want a professional opinion on settling versus bankruptcy. Very often, early answers can change your overall strategy.