Many borrowers assume that if they wait long enough, federal debt
eventually disappears, like credit cards or medical bills. That is not
the case with SBA disaster loans.

The direct answer: No. Unlike private debts, federal disaster loans,
such as those backed by the SBA, do not have a traditional statute of
limitations. That means the government can continue to collect on these
debts indefinitely, through actions like wage garnishment or offsets.

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Myth vs. Reality

Myth: “If I wait long enough, this debt will disappear.”
Reality: Federal debts do not work like private debts. State time limits
apply to credit cards or medical bills, but federal disaster loans are
collected under federal law. That means the government can pursue
repayment indefinitely.

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Examples Across the Country

Whether you borrowed after a hurricane in Florida, flooding in Kentucky
or Texas, or an earthquake in Puerto Rico, the same federal rules apply.
Even years later, the government still has the legal right to collect.

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Why This Matters

Many borrowers feel doubly punished. They lost their home, business, or
stability in a disaster, and now, years later, the government still
wants repayment. You are not wrong to feel frustrated or blindsided.

The good news is that while the debt does not vanish, there are ways to
manage and even reduce the impact.

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Quick Fact

Quick Fact: In Fiscal Year 2022, federal creditor agencies collected
$23.2 billion in delinquent federal non-tax debt, an increase of 102%
from 2021. These collections included offsets and wage garnishments.
Source: Treasury Report on Receivables and Debt Collection Activities,
FY 2022 – Bureau of the Fiscal Service

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What Happens if SBA Disaster Debt is Ignored

If you do not respond to collection efforts, the government has powerful
tools to recover what they are owed:

-   Wage garnishment: Up to 15% of disposable income.
-   Treasury Offset Program (TOP): This program intercepts tax refunds,
   Social Security, retirement, and vendor payments to apply toward
   delinquent federal debts. In Fiscal Year 2022, TOP collected $921.5
   million from delinquent federal non-tax debts.
   Source: Treasury Report on Receivables and Debt Collection
   Activities, FY 2022 – Bureau of the Fiscal Service
-   DOJ referrals: For litigation when other collection tools fail.

In short: ignoring it makes it worse.

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Practical Next Steps

If you are facing collection on an SBA disaster loan, here are steps you
can take right now:

-   Request proof of debt: You can call the Treasury’s Cross-Servicing
   Call Center (888-826-3127) and request the packet directly. If you
   would like an advocate to request it for you, the first step is to
   schedule your free 15-minute consultation with us. During that call,
   we will determine whether completing FS Form 13 (Authorization for
   Release of Information) makes sense for your case. This form allows
   Treasury to release your account details to us so we can assist you
   more fully.
-   Explore payment arrangements or hardship hearings: Treasury may
   allow repayment through a monthly installment plan. If you are
   facing wage garnishment, you can also request a financial hardship
   hearing to show that garnishment would prevent you from meeting
   basic living expenses.
-   Do not ignore official notices: It is critical to act before
   Treasury escalates collection.
-   Seek professional guidance: Get clarity on your options before
   making decisions with long-term impact.

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Closing Thoughts

Disaster loan debt does not disappear with time. There is no statute of
limitations. But that does not mean you are powerless.

👉 Do not wait and hope these debts vanish. That will not happen. But
you do not have to face this alone. Schedule your free, confidential
15-minute consultation with SBA & Federal Debt Advisory Services today.

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FAQ

Does this apply in my state?
Yes. Federal rules apply nationwide, regardless of state laws.

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