From 6 Months Past Due to Disbursed Current (& Holding) - Sole prop $42k loan
TLDR:
- Sole prop $42,600 EIDL
- 6 months behind on payments as of Feb 2026 but still at SBA (not transferred to Treasury)
- account paid current by end of April with individual payments (no lump sum)
- May 2026 reinstated to Disbursed Current, emailed SBA to review & received 'no additional action is necessary' response - current status as of July 1st, 2026
Long story with details:
Sharing my own journey because this spring when I started researching Reddit for hope/next steps, I didn't necessarily find anyone with my specifics (that hadn't already been sent to Treasury).
Timeline:
$43,600 EIDL issued September 2021. Took all deferments and then applied for reduced payments under hardship plan which started March, 2024.
March 2024 - started $25/month payments
March 2025 - started 50% reduced payments for 6 months - paid through July, 2025
August 2025 - business stalled right as full payments started so I stopped making payments
December 8, 2025 - notice of default and acceleration demand (message in portal)
December 28, 2025 - final notice of delinquency (message in portal)
January 17, 2026 - another final notice of delinquency message in portal (this is when I finally started paying attention & understood the stakes - hoped that if I could get my tax refund, I would be able to catch up payments fully)
February 5, 2026 - made first payment since July, 2025
March, 2026 - made 3 separate payments over the month. Submitted taxes electronically March 16th and received full refund March 25th
April, 2026 - made 5 separate payments over the month which caught up the account (5th payment made April 29th)
May, 2026 - 1st week of May account automatically updated to Disbursed Current. Breathed a sigh of relief until I started seeing posts in this Reddit thread from others who'd also paid their account to current (usually as a lump sum) and then STILL were transferred to Treasury.
At this point, I asked Google Gemini for advice - and it recommended emailing the below (in italics) with screenshots (showing the account as Disbursed Current with the most recent payments) to: CovidEIDLServicing@sba.gov & copied to cesc@sba.gov
Subject: URGENT: Reinstated Account Status & Pending Payment Verification - Loan #
I am a single parent sole proprietor writing to ensure my account is manually locked in regular SBA servicing and protected from any automated Treasury referral glitches.
Please note the following verified updates to my file:
- Account Reinstatement: Between February 6th and April 29th, I successfully cleared 100% of my previous past-due balance through a series of individual portal payments. My main dashboard reflects this correction and officially reads 'Disbursed: Current'.
- May 2026 Payment: My current monthly payment was submitted 9 days late and is actively in 'Pending' status while clearing Pay.gov. The official transaction tracking code is Confirmation ID:
Because I have fully caught up my account and the current payment is actively processing, please ensure that any automated backend transfer payloads to Treasury Cross-Servicing are completely halted.
Please reply with written confirmation that a manual servicing hold is active on my file.
Emailed May 31st - received automated response with case number ID (which Gemini assured me was a good thing)
June 2nd - received this reply:
Dear Borrower,
Please be advised that once the full past due amount has been posted, your account status will be updated within 7-10 days. No additional action is necessary at this time.
You may access the SBA Loan Portal to make payments and review updates to your account status.
If your account status has not been updated to current or if the next due date has not advanced by the next billing cycle, please contact us via email for a review of your loan status.
For further assistance, please email CESC@sba.gov with your servicing request and loan number in the subject line.
Sincerely,
Covid EIDL Servicing Center
June, 2026 - made June 2026 payment on schedule
July, 2026 - still at Disbursed Current (and current on payments)
I don't know if making individual payments and emailing the SBA made the difference - or it will long term - but it was the path I had available at the time.
I did research bankruptcy but it's just not a good option for my particular situation:
- Chapter 7 - I have too much equity in my house for the TN homestead exemption & it seemed likely I would be forced to sell to settle the EIDL (other debt is minimal - $5k on credit cards). If it were just me (54F), I'd sell the house, payoff everything and move to WY to help my aging Boomer parents - but I have a 14 year old about to start high school and a 19 year old college sophomore whose financial aid would be thrown by selling the house this year (I can safely sell in 2027 or then have to wait til 2032 as to not affect financial aid for my younger child - unless he doesn't go to college which is somewhat likely based on his personality but I digress).
- Chapter 13 - not viable option as my income fluctuates and I would be forced into a 5 year plan where the numbers just didn't really work
And my goal wasn't to not pay the EIDL loan - I am grateful for it and committed to paying the $225/month going forward. All spring I was kicking myself for letting it get so far behind. I just wanted a chance to catch up and stop SBA from transferring to Treasury if at all possible. Since I didn't have the funds to make a lump sum payment initially, my strategy was to start making up individual payments as fast as possible and hope.
Anyway, that's been the journey - maybe it will help someone else from avoiding the nightmare of Treasury + collections + demands for even more $. If anything changes with my account status, I will update this thread.