Merchant cash advance (MCA) borrowers, such as small business owners, can face significant challenges when dealing with default judgments. A default judgment is a court order issued when a borrower fails to respond to an MCA lawsuit. If you are a borrower facing a default judgment, what steps can you take to challenge it?
Notice of the lawsuit
First, you must know your rights and obligations as a borrower to challenge a default judgment. These include the requirement for a lender to provide you with a written notice of the lawsuit and an opportunity to respond to it. If you did not receive such written notice, this can be an argument in your favor as it may be a violation of your due process rights.
Filing a motion
Then, you can challenge a default judgment by filing a motion to vacate the judgment within a certain timeframe. It is essential to have accurate evidence, so that you can be ready to prove that you have a valid defense to the lawsuit.
Types of evidence to gather
There are several types of evidence that can support your claim when challenging a default judgment. You can submit financial records, payment documentation and communication with the lender.
Negotiating with the lender
Meanwhile, you can take a proactive step after filing a motion to vacate the default judgment. You may be able to negotiate with the lender to resolve the problem and potentially reduce the amount of your MCA debt.
Fighting for your rights as a borrower
A default judgment can have severe consequences, including the seizure of your assets. Since challenging it requires a thorough understanding of the law, you might consider it a demanding task. By seeking the guidance of an attorney, you may better navigate the complex legal process and fight for your rights as a borrower.