Legal Question in Credit and Debt Law in California

My wife acquired a SBA loan in 2008 and we have always paid regularly. In early 2010, we were a bit tight financially and sought ways to relieve our payments for a few months until the ends meet.

Over the phone, a SBA representative told us that many others have requested for temporary relief and it would not be a problem. All we had to do was to submit a hardship letter explaining our situation and she would put it through the system and this would relieve us of payments for three months w/out penalty and interest accumulation. So we did.

Three months later, we received a delinquency letter stating that we were late on payments needed to pay over $1000 in late charges + all payments that were behind.

We contacted the representative in a hurry and she said not to worry and it is a system error and all we needed to do was to pay for our regular payment and that she would take care of it. She also helped us with automatic payment so we don't need to worry about mailing in payments monthly. So we took her advice.

However, for the next two months, we did not receive any physical bill. Curious, we decided to called again, to our surprise, the interest charge and late payment continued to accrue. We found out that this particular bank was bought out by another bank and the Representative who had dealt with us no longer worked there.

The manager told us that they were not responsible and we would need to catch up or charges will continue to rise. (Because according to the fine prints, we have the responsibility for all interest and late charges regardless). Also, our automatic payment was never set up and we had been late another two months + payment/interest.

To this end, we have continued to pay for our regular payments but not the penalty and interest charges because they are getting ridiculously large. I know that SBA loans are non-negotiable . But could this be misrepresentation? Did the words from the first representative have any legal consequences? We really do not want to pay anymore if this continues. Do we even have a case here? Please advice.

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