EIDL Hardship Accommodation Plan (HAP): Am I Eligible?

You took a government loan to save your business. It worked - barely. Now you can not pay it back and every month feels like drowning a little bit more. You searched for "EIDL hardship accommodation plan" hoping there was a lifeline, something the government put in place for people exactly like you. Someone who did everything right during an impossible time and now faces impossible consequences.

At Spodek Law Group, we have spent the last several years working with business owners who thought they understood their EIDL situation - until they did not. Todd Spodek and our team see this every week: capable, smart people who made reasonable decisions during an impossible time, now facing consequences they never anticipated. The pandemic forced choices nobody wanted to make. You took the loan because the alternative was closing your doors forever. That was the right call then.

We are here because you need the truth, even when that truth is uncomfortable. Not the press release version. Not the FAQ page on some government website that was last updated eighteen months ago. The real version. The version that practitioners whisper to each other at conferences but never put in writing.

Here is what we wish someone had told you months ago. The version that changes what you do tonight.

HAP Is Closed - What That Actually Means For You

The SBA Hardship Accommodation Plan officialy closed on March 19, 2025. Full stop.

Read that date again and check your calender. If your reading this after March 2025, the program you were looking for no longer exists. The door is closed. The opportunity has passed.

If your sitting there thinking "maybe I can still apply" or "maybe there's an exception for hardship cases" - there isnt. The program that reduced monthly payments to 10% of what you owed, the program that gave struggling business owners room to breathe during the recovery period, the program that approximately 300,000 borrowers were enrolled in representing $36 billion in EIDL debt? Its gone. Terminated. No longer accepting applications.

And heres the part that makes me angry when I think about it. For years, the SBA talked about helping small business owners get back on there feet. They expanded HAP eligibilty in January 2024 and made big announcements about how they were committed to supporting the small business community. They made it sound like relief was just a phone call away for anyone genuinly struggling. What they didnt tell you - what they couldnt tell you because it would have caused panic - was that HAP wasnt really about permanant help. It was about buying time while they built collection infrastructure.

The program kept borrowers engaged with the system. It kept them filing paperwork, submitting financial documants, providing detailed information about there assets and income. It kept them hopeful enough to stay in the system rather then defaulting immediatly and disappearing. And all that information? It becomes collection intelligence later.

Look, I know you came here hoping for good news. Hopeing to find out your eligable for somthing that would make this nightmare end. Hoping I would tell you about a secret program or a loophole that nobody else knows about. But the door you were looking for - the one labeled "EIDL Hardship Accommodation Plan" - it closed behind you while you were still gathering documents and trying to understand what you even needed to qualify.

Thats not the end of the story though. Theres still a path forward - its just narrower then you think, and the clock is ticking faster then you realize.

The 180-Day Countdown Nobody Warned You About

You probly got the first letter and set it aside on the corner of your desk. Maybe the second one too. Letters from the government feel like they can wait - theres always a response deadline thats weeks away, and your dealing with a hundred other fires right now. Payroll that needs to be met. Vendors demanding payment. Keeping the lights on and the employees paid. The EIDL letter can wait until things calm down.

But heres what nobody explaned clearly: there's a number that matters more then anything else in your EIDL situation, and that number is 180 days.

Thats your number. Memorize it.

Day 1 of missing a payment feels managable. Your stressed, but the world hasnt ended. Day 30 passes and you think you'll catch up next month when that big invoice gets paid. Day 60 feels concerning - two payments behind now, and the letters are getting more urgent. Day 90 and your deffinitely worried but still telling yourself there's time. Day 120 feels like your running out of options. And day 180? Thats when everything fundamentaly changes in ways you probably dont understand yet.

Day 180 is when your loan gets transfered from the SBA to the Treasury Department. And the Treasury Department is a completly differant animal then the agency you've been dealing with so far.

When did you first miss a payment? Count from their. Calculate the date. Figure out exactly where you are on that timeline.

The SBA, for all its frustrations and bureaucratic nonsense, at least pretends to want to work with you. They have programs. They have accommodations. They have people who answer phones and sound sympathetic even when there reading from scripts. They talk about "options" and "solutions" and "working together." Treasury doesnt operate that way. Treasury is a collection machene designed to extract money from federal debtors using every tool the federal government possesses.

Your not negotiating with a lending agency anymore. Your negotiating with the most powerfull collection operation on the planet - an operation backed by the full faith and credit of the United States government, with access to your tax returns, your bank accounts, your wages, and your retirement funds.

What 'Treasury Referral' Actually Looks Like

Let me be very specific about what happens after day 180, because I want you to understand this isnt abstract bureaucratic process thats happening somewhere far away. This is your life. This is your money. This is your familys future.

They take your tax refund. Just gone. Disappeared. That $4,000 you were expecting in April - the money you were counting on for the kids tuition or the car repair or just catching up on bills? Offset against your EIDL debt automaticaly. No warning. No letter asking if its ok. No negotiation. You file your taxes like always, you wait for your refund like always, and it simply never arrives. When you call the IRS to ask where it went, they tell you it was aplied to your federal debt under something called the Treasury Offset Program.

But thats just the begining of what there authorized to do.

Treasury can garnish your wages directly from your employer. Not a huge amount - 15% of disposable income under federal guidelines - but its automatic and its humiliating. Your employer gets an official notice from the federal government. The payroll department processes it. Now everyone at work who handles your paycheck knows your in federal debt trouble. Try explaining that in a small office. Try explaining that when your up for promotion.

They can seize your bank accounts without your permission. Not without legal process - there are steps they have to follow - but they have the legal authority to freeze whats their and take what you owe. Imagine logging into your bank account to pay the mortage and finding it frozen. Imagine explaining to your landlord why the rent check bounced.

And heres the part that makes clients break down crying in my office when I explain it to them: they can take 15% of your Social Security benefits. Every single month. For years and years. If your planning on retirement in the next decade, if your counting on that income to supplement what you've saved, if that Social Security check is the differance between comfort and struggle in your golden years - the government can reach in and take its peice before you ever see a penny.

This isnt theory. This happens every single day to EIDL borrowers who waited too long to address there situation.

I've watched business owners - strong, capable people who built companies from nothing, who employed dozens of workers, who contributed to there communities for decades - completly lose there composure when they realize whats coming. When the reality of Treasury collection hits them, its like watching someone get punched in the stomach.

The 30% Penalty That Can Swallow Your Business Whole

Heres what nobdy tells you - what no government website mentions clearly, what no FAQ section explains in plain english - about that Treasury referall. Its not just that a differant agency is now responsible for collecting your debt. Its not just that Treasury is more aggressive then the SBA. Its that they add a 30% penalty to the total amount you owe.

$45,000. On a $150,000 loan. Added overnight because you crossed the 180-day threshold.

Think about that number for a second. Really let it sink in.

Thats not a late fee for missing a payment. Thats not a penalty proportional to how many months your behind. Thats the cost of being refered to Treasury, applied automaticaly at day 180 whetehr you knew it was coming or not. Whether you could have prevented it or not. Whether you ever got a clear warning about it or not.

I had a client last year who thought they owed $200,000 on there EIDL loan. They were already stressed about it, already losing sleep, already damaging there health worrying about how they would ever pay it back. When Treasury got invovled and the final number came through, it was $312,000. Almost $112,000 in penaltys and fees added to a debt they were already drowning under. Nearly $500,000 in collection fees got added to a $1,000,000 loan for another client I represented. Read that again - half a million dollars in fees on top of the original debt.

And it compounds. Every single month that debt sits their, interest accrues on the larger amount. The hole gets deeper while your still figuring out how to climb out.

The system isnt broken. This is exacty how its designed to work. The 30% penalty isnt punative in the sense of punishing bad behavior or teaching borrowers a lesson. Its designed to make the debt so large that setlement becomes nearley impossible. The government wants the full amount plus penalty plus interest plus fees. They have unlimited time and unlimited collection power - they literally cannot go bankrupt, they can garnish wages indefinatly, they can chase you until you die. You dont have those advantages.

Its not late fees anymore. Its a second business loan you never agreed too - except this one has no repayment terms, no end date, and no negotiation.

Your Options Are Narrower Then You Think - But They Exist

OK so lets talk about what you CAN actualy do at this point. And no, "just paying it off" isnt on this list for most people I talk too because if you could have paid it you wouldnt be reading this article at 11pm trying to understand your options.

WARNING: If you were ever enrolled in HAP at any point since the pandemic, your locked out of the new short-term assistance program entirely. The SBA explictly excludes former HAP participants from the replacment relief programs they announced in 2025. Let that sink in for a moment - you tried to do the right thing by enrolling in there official accommodation program when it was offerred, you submitted all the paperwork they asked for, you played by there rules, and now your being punished for it by being excluded from the next round of help.

This is what I mean when I say the system wasnt designed to help you. It was designed to sort you.

Heres your actual menu of remaining options. Not what you hoped for. Not what you deserv. What actualy exists in reality:

Short-Term Assistance (if you were NEVER in HAP): Reduced payments for up to 18 months while you try to stabilize. Requires demonstratable hardship through financial documentation. Approval rates are significently lower then they were in 2024 - the SBA is being much more selective about who qualifys.

Offer in Compromise: In theory, you can offer to settle your debt for less then the full amount owed, similar to how some people settle IRS debt for pennies on the dollar. In practice, the SBA has basicaly stoped approving these offers since late 2024. The numbers we're seeing from practisioners across the country suggest there rejecting almost everything that comes in, regardless of the borrowers circumstances.

Workout Agreements: If your allready in default but not yet referred to Treasury, sometimes a lump-sum partial payment can stop or delay Treasury referral while you negotiate further. Depends heavily on your specific situation, your payment history, and honestly which SBA office is handling your case.

Challange the Loan Validity: In some cases, there are legitamate legal defenses - fraud in the application process that you didnt commit, identity theft where someone used your information to get a loan you never recieved, procederal errors in how the loan was documented or serviced. This is rare but it does happen, and when it applies its powerful.

Bankruptcy: Were going to talk about this one seperately and in depth because most people dont understand what it actualy means for EIDL debt, and there assumptions are almost always wrong.

Some people will tell you HAP was genuine help from a government that cared - and for some businesses, it genuinly was the bridge they needed to survive until recovery. About 300,000 borrowers enrolled and some of them recovered completly. But whether HAP was compassoin or calculation doesnt change your situation tonite. What matters right now is what you do in the next 30, 60, 90 days before Treasury referral makes everything exponentialy worse.

When Bankruptcy Becomes Your Best Freind

Heres the word nobody wants to say out loud in a business context. The word that feels like admitting defeat. The word that carries so much shame that people will literaly lose there homes rather then speak it.

Bankruptcy.

Most people think of bankruptcy as failure - the ultimate failure. As giving up on everything you worked for. As the shamefull end of everything they built over years or decades of hard work. I've talked to business owners who would genuinly rather lose there house to Treasury collection then file for bankruptcy because of what they think it says about them as a person. Because of what there family might think. Because of what the neighbors might whisper.

But heres what those people dont understand, what almost nobody outside the legal profession understands: EIDL loans CAN be discharged in bankruptcy proceedings. Most people absolutly do not know that.

Unlike federal student loans which are famously almost impossible to discharge, EIDL debt does not have the same protectoins. Its treated more like ordinary commercial debt in many bankruptcy proceedings.

Its not guarunteed - the bankruptcy court looks at whether your genuinly unable to repay, whether there was any fraud invovled in obtaining the loan, whether the circumstances of your case meet certain legal criteria. But unlike some government debts that follow you to the grave, EIDL debt is potentialy dischargable under the right circumstances.

Chapter 7 bankruptcy could elimnate your EIDL debt entirely - just wipe the slate clean and let you start over without that massive weight on your shoulders. Chapter 13 bankruptcy could restructure the debt into managable monthly payments over a 3-5 year repayment plan based on what you can actualy afford rather then what the original loan terms demanded. The specifics depend entirely on your situation - your total assets, your current income, your other debts, and a dozen other factors that only matter in your particular case.

CRITICAL: Some assets are strongly protected in bankruptcy proceedings that Treasury could seize outside of bankruptcy. Your retirement accounts, for instance, are often completly protected. I've watched the releif wash over clients faces when they realize the government cant touch there 401(k) or there IRA in a bankruptcy proceeding - money they assumed was lost is actualy safe.

At Spodek Law Group, we dont push anyone toward bankruptcy who isnt ready for it or doesnt need it. Its a serious decision with long-term conseqences for your credit and your financial options. But we also dont let clients avoid even having the conversation out of misplaced shame or outdated stigma. Sometimes the bravest business decision is knowing when to walk away protected, when to use the legal tools available to protect your family and your future.

Bankruptcy isnt giving up. Its strategic protection of what matters most - and what matters most isnt the business. Its the people.

The Call You Should Have Made Yesterday

Look. You've read this far. Almost 3,000 words about EIDL debt and Treasury collection and bankruptcy options.

Your not looking for general infomation anymore. Your not doing casual research. Your looking for someone to tell you what to do about YOUR specific situation with YOUR specific numbers and YOUR specific timeline. And I cant do that in an article because I dont know your loan amount, your payment history, your assets, your income, your specific circumstances.

But I can tell you this with absolute certainty: every day you wait is a day closer to that 180-day line. Every day you spend hopeing the problem will somehow resolve itself, hoping business will pick up, hoping you'll win the lottery or find a bag of money - thats a day your options get narrower and your penaltys get larger.

Your not going to feel more ready tommorow. Your not going to have more information. Your not going to be less scared. Your going to feel worse. The anxiety will be bigger. The numbers will be worse. The timeline will be shorter.

The consultation is free. The information you'll recieve is valuable. The delay is expensive in ways you dont fully understand yet.

You took a loan during an impossible time because you were trying to save somthing you built with your own hands. That decision made sense then - it was the right choice for the circumstances you faced. The question now isnt whether taking the loan was the right decision. Thats done. History. The question is what you do next with the situation you actualy have.

Your not a fraud for taking the loan. Your not a failure. Your not a bad business person. Your a business owner who made the best decision you could with the information you had at the time. The shame you feel - that crushing weight of having "government debt" you cant pay - thats what there counting on to keep you paralized. Thats what keeps people frozen while the 180-day clock ticks toward Treasury referral.

Spodek Law Group has helped hundreds of business owners navigate exactly this situation. We understand the fear. We understand the confusion. We understand the shame that keeps people from picking up the phone. And we understand that the system is not designed to help you find the best outcome - which means you need someone in your corner who genuinly is.

Call 212-300-5196. Today. Not tommorow. Not next week when things calm down. Today.

The window is closing faster then you realize. Dont let it close on you.