Receiving a default judgment can be devastating for small business owners who have defaulted on their merchant cash advances (MCAs). This can lead to bank levies and the seizure of business assets. If you are facing a default judgment, do you know what steps to take next?
Ways to mitigate the damage of a default judgment
When a lender obtains a default judgment against you, it is essential to act quickly to mitigate the damage. Here are some time-sensitive strategies to consider:
- Move to vacate the default judgment: You can file a motion to vacate the default judgment. This motion must be filed within a specific timeframe.
- Show that you were not properly served: If you were not properly served with the lawsuit, you may be able to vacate the default judgment. This can be a valid defense if you can prove that you did not receive the lawsuit papers or that the service was defective.
- Demonstrate another valid defense: If you have another valid defense to the lawsuit, such as the lender breaching the terms of the MCA agreement, you may be able to vacate the default judgment. This requires gathering evidence and building a solid case.
In some cases, it may be possible to negotiate a settlement with the lender to reduce or eliminate the debt. This can be a viable option if you have a strong case but want to avoid the costs and risks of litigation.
Asserting your rights as a business owner
Facing a default judgment can be a nightmare, but that doesn’t mean you have to back down. As a business owner, you have rights, and it is essential to assert them. By taking action quickly and seeking advice from a legal advocate, you may fight back against an aggressive lender and protect your business.