Defending A Merchant Cash Advance Lawsuit
Exploring the use of a merchant cash advance (MCA) and even getting one isn’t a problem. When you need a cash influx to meet business needs, you do what you have to do. But these advances are an unregulated area, and you can see excessive interest rates in the 300% range. It can be the first step in a bad cycle.
At Merchant Cash Advance Law Firm P.C., merchant cash advance attorney Dominick Dale represents clients across the United States facing serious MCA debt problems. Most MCA lawsuits end up in the State of New York court. Merchant Cash Advance Law Firm P.C. appears in all 62 counties in New York State. For a free 30-minute phone consultation call 347-588-5590 or send an email.
What Are Your Rights As An MCA Borrower?
MCAs are not considered loans but rather transactions involving a security interest. This distinction means they aren’t subject to most laws that apply to traditional business loans. When you take out a merchant cash advance, you may have signed a contract that includes a confession of judgment (COJ) clause.
A COJ clause is a provision that allows the creditor to obtain a judgment against you in court without notice or a hearing if you fail to make payments according to the contract terms. This can have serious consequences, including the enforcement of a UCC lien against your business’s assets and the waiver of your right to defend yourself in court. You may have also been asked to agree to a personal guarantee, making you personally liable for paying the MCA debt if your business is unable to do so.
As an MCA borrower, it’s essential to understand that you have rights, including:
- Right to clear disclosure: The MCA provider must clearly disclose the terms of the advance, including the amount provided, total repayment amount and retrieval rates.
- Right to contest the debt: If you believe the MCA provider has made errors in their filings, you have the right to contest the debt.
- Right to seek relief from oppressive contracts: If the MCA contract is oppressive or unfair, you may have the right to seek relief from the contract.
- Right to dispute unfair collection practices: If you believe the MCA provider has engaged in unfair collection practices, you have the right to dispute these practices and seek relief.
- Right to representation: You have the right to work with an attorney who understands MCA laws and can help you navigate the lawsuit.
- Right to a fair process: You have the right to a fair process, including proper service of the lawsuit and a reasonable opportunity to respond.
MCAs are, for the most part, unregulated. This means that interest rates are huge, tactics are aggressive and approvals are extremely fast. All of that builds up to mean that the business model of an MCA business is to move quickly, approve advances, and aggressively pursue you for your accounts receivable. They will, if you miss payments, file a lawsuit.
But that’s where Merchant Cash Advance Law Firm P.C. gets to work.
In order for an MCA lawsuit to work, their filings, paperwork and information must be in order. However, it is an unregulated industry, and their practices in collecting debts granting these advances are often deeply flawed. Dominick Dale takes the offensive on these, pouring over your case for every detail. In many cases, he can fight to get you a good settlement. In some cases, he can petition the state to dismiss a debt entirely due to creditor misconduct.
What To Do If You Are Being Sued?
Receiving a lawsuit from an MCA provider can be stressful, but there are steps you can take to protect your business. Here are the steps to take when defending a lawsuit:
- Review the lawsuit: Carefully read the lawsuit and understand the claims made against you.
- Consult with an attorney: Work with an experienced MCA attorney who can help you understand your options and develop a strategy to defend against the lawsuit.
- Respond promptly to the lawsuit: File a response to the lawsuit within the required time frame to avoid a default judgment, which can result in wage garnishment, bank account attachment or property seizure.
- Gather evidence: Collect payment records, receipts and communication with the MCA company to support your case.
- Pursue settlement discussions: You may consider negotiating a settlement or alternative repayment plan with the MCA provider before the case goes to court.
- Explore a counterclaim: If negotiations fail, consider filing a counterclaim if you have evidence of predatory practices or contractual breaches by the MCA provider.
- Prepare for court: If the case goes to court, attend all hearings and follow the judge’s orders.
By taking prompt action and seeking legal advice, you can advocate for your rights and interests when facing a merchant cash advance lawsuit. Working with a law firm experienced in MCA matters such as Merchant Cash Advance Law Firm P.C. can help you work toward the most favorable outcome.
Do Not Delay. Contact Dominic Dale Today.
When you have an merchant cash advance lawsuit against you, you’re not out of options. However, time is running short. You need to turn to a merchant cash advance attorney who will fight for you. You want a bulldog of an attorney; you turn to Dominick Dale. He’s not going to back down. He’s going to take on the toughest fight you’ve had.
Reach out today to learn more about how attorney Dale can help defend your business against an MCA lawsuit. Call 347-588-5590 or send an email using this form.
