EIDL default…scared and don’t know what to do

EIDL default…scared and don’t know what to do…

I have an EIDL of 130k. Made some payments but it’s become impossible in the last year to keep up. My business is almost non existent at this point and I am now working a part time hourly, minimum wage job. I don’t know what’s gonna happen. Can’t sleep at night and I’m afraid they’ll garnish my little check, how will I survive. Booming business before Covid and sales just haven’t been the same after Covid with no recovery. I’m so scared for my family. Honestly contemplating life at this point. Any insight on what to expect.

I just got a 60 day notice to pay 10k (default balance) . Or…..offsets will start.

Hey — I can tell you’re under a lot of pressure right now, and I want you to know you’re not alone and there are steps you can take. But first, I need to say this clearly:

If you’re feeling hopeless or contemplating suicide, please pause and reach out for immediate support. You can call or text 988 (the Suicide and Crisis Lifeline) — it’s free, confidential, and available 24/7. They will listen and help you get through this moment safely. You don’t have to face this alone, and your life absolutely matters.

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Now, about your EIDL loan and the 60-day default notice — here’s what’s really happening and what you can do next.

💡 What the Notice Means

A “60-day notice” usually means the SBA has declared your loan in default and is warning that if you don’t bring it current or work out a resolution, they’ll begin Treasury collection.

That can include:

• Offset of tax refunds or federal payments (through the Treasury Offset Program)

• Wage garnishment — but this usually happens later, after it’s transferred to Treasury and you’ve had additional notice

• Credit reporting and potential collection fees

However — they generally do not immediately garnish wages, and since you’re working part-time at minimum wage, they’re very limited in what they can legally take. Treasury cannot seize your income if it would leave you below subsistence levels.

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🛠️ What You Can Do Right Now

1. Call the SBA Disaster Servicing Center

• Number: 1-800-736-6048

• Ask to speak with someone about “Hardship Accommodation” or “Workout Options.”

• The SBA has a Hardship Accommodation Plan that can temporarily reduce your payments to as little as $25/month for up to 6 months (and renewable).

2. Explain Your Situation Honestly

• Tell them your business has failed and you are now working part-time.

• Emphasize that you want to cooperate and avoid default but cannot make the full payment.

3. If It’s Already at Treasury

• If the SBA has already transferred your loan to Treasury Cross-Servicing, call the Bureau of Fiscal Service (BFS) at 1-888-826-3127.

• Ask for a Hardship Reduction Plan or compromise review.

• They can reduce or suspend payments based on income and expenses.

4. Keep Communication Open

• Ignoring it makes things worse (fees pile up).

• Staying in touch and showing effort can stop enforcement action.

5. Seek Free, Legitimate Help

• A Local Small Business Development Center (SBDC) or SCORE mentor can help you talk to the SBA directly.

• A CPA or enrolled agent (like US Tax Relief) can help you understand offset implications and your overall tax picture.

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💸 Will They Garnish Your Minimum Wage Job?

In practice, Treasury rarely goes after someone with low income and no assets.

If your wages are small, they may not be legally eligible for garnishment at all. You’ll get multiple written notices first, and you have a right to claim financial hardship.

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⚖️ If the Business Is Closed

If your business entity signed the note and you didn’t personally guarantee the loan, they can’t come after your personal wages.

If you did personally guarantee, they can pursue you — but you still have rights, and bankruptcy can discharge these debts if necessary.

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❤️ Please Don’t Give Up

This is survivable. Thousands of people are in the same position. The SBA knows that post-COVID recovery failed for many small businesses.

You can still recover — personally and financially — one step at a time.

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Also, I’ve included a sample hardship request letter to the SBA that shows strength and a will to fight through this, even when it feels hopeless. You’re doing the right thing by taking action instead of freezing up. Let’s get you something solid to send to the SBA so you can start protecting yourself and your family.

Here’s a custom hardship request letter you can copy, fill in your name, and send either by email or mail to:

📬 SBA Disaster Servicing Center (Birmingham)

Email: [email protected]

Phone (to confirm receipt): 1-800-736-6048

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🧾 Sample SBA Hardship Accommodation Request Letter

Subject: Hardship Accommodation Request – EIDL Loan #[insert your loan number]

To Whom It May Concern:

I am writing to formally request a Hardship Accommodation on my SBA Economic Injury Disaster Loan.

My business has declined severely since COVID-19. I initially made payments, but over the past year my sales have dropped to near zero, and I am now working part-time at a minimum-wage job just to cover basic living expenses.

I recently received a 60-day default notice stating that my loan balance of approximately $130,000 is in danger of being sent for collection or offset. I am extremely concerned and want to avoid default, but I simply cannot afford the full payment amount at this time.

I respectfully request to be placed on a Hardship Accommodation Plan. Based on my current financial situation, I can afford $25 per month until my situation improves. I would be grateful for any assistance or relief that allows me to remain compliant and avoid default or collection action.

I am willing to provide any supporting documentation needed (income, expenses, pay stubs, or other financial details). Please let me know what you require so I can submit it immediately.

Thank you for understanding and for providing this opportunity for struggling small business owners to stay in good standing with the SBA.

Sincerely,

[Your Full Name]

[Your Business Name (if any)]

EIDL Loan #: [Your Loan Number]

Address: [Your Mailing Address]

Phone: [Your Phone Number]

Email: [Your Email Address]

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✅ Next Steps

1. Email this letter to [email protected] — subject line:

Hardship Accommodation Request – [Your Loan #]

2. Attach your last pay stub or a short list of your monthly expenses (rent, food, utilities).

This helps them see your hardship clearly.

3. Call 1-800-736-6048 within a few days to confirm they received it and to ask for a case number.

4. Keep copies of everything — email confirmation, letters, and any SBA replies.

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Also, I’ll show you a simple one-page hardship financial worksheet you can attach with your letter — something that shows your income and basic expenses clearly and professionally (like rent, food, gas, utilities).

By filling this worksheet out, you’re doing exactly what you should be doing right now. Taking one solid, calm step at a time.

Here’s a simple, printable Hardship Financial Worksheet you can attach to your SBA email or letter. It clearly shows your income and essential expenses so they can approve a reduced $25/month payment plan.

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🧾 SBA Hardship Financial Worksheet

Borrower Name: ___________________________________________

Business Name (if applicable): _______________________________

EIDL Loan #: ___________________________

Date: ______________________

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A. Current Monthly Income

Source	Monthly Amount
Wages / Salary (part-time)	$__________
Spouse income (if applicable)	$__________
Unemployment / Benefits	$__________
Social Security / Disability	$__________
Other income (side work, etc.)	$__________
Total Monthly Income	$__________

B. Current Monthly Living Expenses

Category	Monthly Amount
Rent / Mortgage	$__________
Utilities (electric, gas, water)	$__________
Food / Groceries	$__________
Transportation / Gas	$__________
Auto Insurance / Loan	$__________
Health Insurance / Medical	$__________
Phone / Internet	$__________
Childcare / School Costs	$__________
Credit Cards / Personal Loans	$__________
Other (specify): __________________	$__________
Total Monthly Expenses	$__________

C. Remaining Disposable Income

Total Income: $__________

Minus Total Expenses: $__________

= Net Available for SBA Payment: $__________

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D. Proposed SBA Payment

💵 Proposed Hardship Payment: $25 per month

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Signature: _____________________________  Date: _______________

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📎 How to Submit

• Email to: [email protected]

• Subject line: Hardship Accommodation Request – [Your EIDL Loan #]

• Attach both:

1. Your Hardship Request Letter

2. This Financial Worksheet (as a PDF or image)