Filling out SBA Form 770: Why does SBA want so much information about my spouse?(0) Comment |
Last Updated on: 5th June 2023, 01:49 pm
How to Complete Form 770 for the Small Business Administration and Find Out Why the Government Is Interested in Your Spouse’s Money
Providing thorough and honest financial information is essential when making an offer via the Small Business Administration’s (SBA) Offer in Compromise program. Truthfulness is not only morally important, but legally required, since you are making this declaration under the threat of perjury. When addressing the dreaded SBA Form 770, numerous questions often emerge.
This detailed manual will address frequent questions and stress the need of include your spouse’s financial information in your loan application, even if they are not a guarantor. In addition, we will explore the repercussions of asset transfers to third parties and talk about bankruptcy as a possible option.
The Fascinating Importance of Your Spouse’s Financial Situation
The SBA will still need to know your spouse’s income and expenses even if they are not a guarantor on the loan. The SBA needs this information so that they can accurately assess your financial situation and account for any possible contributions from your spouse. By include your spouse’s salary and financial contributions, they may more properly determine your discretionary income.
Persistent Fears About Your Spouse’s Legal Exposure
You may be confident that disclosing your spouse’s financial details will not render them responsible for paying off your debt. You, as the borrower or guarantor, are responsible for repaying the loan in accordance with the terms of the original loan instruments and the unconditional personal guarantee you signed.
Community property rules vary from state to state, so your spouse may still be held responsible for your debt. Even though your spouse is not personally responsible for debt committed before to the marriage, income or property obtained during the marriage may nonetheless be liable to repayment in a community property jurisdiction. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are all b>community property states.
Dangers Laid Latent in Property Transfers
If you’re worried about the safety of your money or other valuables, it may seem like a good idea to transfer them to a third party. In the perspective of the SBA, this might be a huge risk since it could reveal your true motivations and damage your trust. The SBA may contest such transactions under state legislation, such as fraudulent conveyance laws, if it believes they are efforts to hide assets from creditors. Because of this, the SBA may decide not to approve your loan application.
Dangers of Hiding Transferred Asset Information
Form 770 requires you to sign under penalty of perjury, so keep that in mind.If you lie about your finances, you might face serious consequences, including jail time. Never try to hide any transfers to family or friends from your lawyer or the SBA. There may be valid reasons for and means to handle these transfers during the offer phase, so they shouldn’t automatically kill a sale. Talk to your lawyer about whether or not submitting an offer is the right move for you.
Filing for Bankruptcy as a Last Resort: Exercise Caution
If you don’t want to or can’t afford to make a full financial disclosure via Form 770, bankruptcy may seem like a good alternative. But bankruptcy disclosures may be considerably more intrusive than the SBA’s minimum requirements. You still have to be honest about your finances throughout the bankruptcy process, so it’s not necessarily the safer option you may think it is.
Get ready, tell the truth, and work hard.
Being thorough and honest while filling out Form 770 is crucial to navigating the SBA Offer in Compromise program. Even if your spouse is not a guarantor on your loan, their financial information is still very important to the SBA. Never forget that you are signing under the threat of perjury; honesty with your lawyer and the SBA is of the utmost importance.