Are EIDL and PPP Loans Dischargeable in Bankruptcy?
The Short answer is YES! The question often comes up whether Paycheck Protection Program (PPP) Loans or Economic Injury Disaster Loans (“EIDL”) from the U.S. Small Business Administration (SBA) are discharegeable in Bankruptcy. These loans emerged primarily during the Covid-19 pandemic. EIDLs under $25,000 were unsecured, while those above $25,000 required collateral from the business. Loans over $200,000 also required a personal guarantee, making the guarantor responsible for the debt. Unfortunately, as these loans come due for payment in 2023 in light of the economic woes of recession, inflation, and ever increasing interest rates, many businesses remain unable to pay