small business

Kabbage files for bankruptcy as it faces PPP fraud probes

Online lender Kabbage was one of the biggest lenders in the first year of the Paycheck Protection Program, processing more than $7 billion in loans.

But for more than two years, the company has also been dogged by questions of whether it was too lax in approving loans that it should have known were fraudulent.

Facing numerous federal investigations into its PPP lending practices, Kabbage or, to be more accurate, the shell of what was once Kabbage, filed for bankruptcy this week.

Kabbage was acquired by American Express in the fall of 2020. The credit card giant took the online lender’s technology and many of its employees, but left behind the PPP loan portfolio, which would be handled by a holding company that now does business under the name KServicing.

READ MORE: A felon, an alleged drug dealer and a comic: How some who may be ineligible got PPP loans

That holding company disclosed in the filings that it is currently facing investigations into its PPP lending practices from the House Select Subcommittee on the Coronavirus Crisis, the Federal Trade Commission, the U.S. Small Business Administration and two U.S. Attorneys, working in conjunction with the U.S. Department of Justice.

The

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Knowing When to File for Bankruptcy

Life doesn’t always go according to plan. You may have needed to take on debt that outgrew your ability to pay it off each month. Now you’re wondering how to get your financial situation back in order.



Due – Due

Knowing when to file for bankruptcy is a valuable skill for individual consumers and small-business owners. Learn more about it and determine if it’s the best move for your financial needs.

What Is Bankruptcy?

Bankruptcy is a legal process begun by people who have too much debt. They must sign a federal petition that considers their outstanding financial obligations or debts before requesting that their creditors work with them to resolve their debt with any remaining assets.

What Are the Types of Bankruptcy?

People can accrue too much debt as individual consumers or business owners, so numerous types of bankruptcy exist to address those situations. These are the specific chapters outlined in the U.S. bankruptcy code that you may consider if you find yourself unable to repay debts.

Chapter 7: Individual Liquidation

Most people who need to claim straight bankruptcy over personal debt will file under Chapter 7. A federal court appoints a trustee to assist the individual with selling

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