Alabama Business Debt Settlement and Merchant Cash Advance Lawyers
Small businesses in Alabama struggling with debt have options. Business debt settlement lawyers and merchant cash advance attorneys can provide legal guidance to resolve financial issues.
How Can a Business Debt Settlement Lawyer Help?
Business debt settlement lawyers help negotiate reductions on unsecured business debts like loans, lines of credit, accounts payable, and business credit cards. They work directly with creditors to settle for lump-sum discounted payoffs. This can eliminate debt and provide tax relief.A business debt settlement lawyer may help with:
- Negotiating discounts of 25-50% or more on business debts
- Creating affordable lump-sum settlement offers
- Halting creditor harassment and debt collection lawsuits
- Providing legal protections from deficiency judgments
- Gaining tax relief on cancelled debt
Retaining a business debt settlement lawyer often costs around 15-25% of enrolled debt but can wipe out tens or hundreds of thousands in obligations.
What is a Merchant Cash Advance?
A merchant cash advance (MCA) provides a lump sum of working capital to a business in exchange for a percentage of future credit card sales. MCAs carry equivalent APRs over 100% – much higher than business loans.While MCAs provide fast funding, aggressive collections and contractual “gotchas” can put companies into debt spirals. A merchant cash advance attorney can help.
Legal Issues With Merchant Cash Advances
Merchant cash advances lead to legal problems including:
- Excessively high costs stripping business revenues
- Onerous daily/weekly repayment requirements
- Personal guarantees and pressure on business owners
- Aggressive collections tying up merchant accounts
- Potential violations of state lending laws
These issues make it vital to have an experienced Alabama MCA attorney review agreements before signing.
MCA Defense Strategies
Alabama MCA attorneys can raise arguments around:
- Usury and lending violations
- Unconscionable and confusing contract terms
- Improper use of personal guarantees
- Harassment and unfair collections practices
They may also negotiate settlements or bring lawsuits to invalidate improper contracts.The sooner a company consults an attorney after issues arise, the more options they will have. An Alabama MCA lawyer can analyze the agreement to find potential violations.
Finding the Right Business Debt Relief Attorney
It takes research to find an attorney experienced with business debt relief and merchant cash advances. Key credentials to seek include:
- Specific focus on business debt settlement
- Merchant cash advance defense experience
- Understanding of relevant Alabama laws
- Record of favorable settlements and litigation
- Reasonable, transparent fees
Check reviews and ask questions before retaining a lawyer. The right guidance can resolve financial issues and get companies back on track.
Delancey Street – Expert Business Debt Relief
Delancey Street helps business owners resolve debt, including through legal strategies. Our dedicated experts have settled millions in business obligations. We offer a free consultation to review your situation.With the help of attorneys, we have developed effective techniques to negotiate debt relief and defend against merchant cash advances. Our customized approach looks at your entire financial picture to create a plan that works.
What Laws Apply to Merchant Cash Advances in Alabama?
While Alabama has not passed specific MCA regulations, several consumer protection laws potentially apply:
- Alabama Deceptive Trade Practices Act – prohibits unfair business practices
- Alabama Small Loans Act – caps interest rates on loans under $749
- Alabama Consumer Credit Act – disclosure requirements on lending
Savvy Alabama MCA lawyers use these protections to argue against contract terms and aggressive collections.
Tax Consequences of Settling Business Debt
One advantage of business debt settlement is tax relief. The IRS treats forgiven and cancelled debt as taxable income. However, money saved through a settlement may offset extra taxes.An Alabama business debt attorney can include tax planning guidance with a settlement strategy. They may advise placing settled funds into a tax-deferred retirement account.The legal and tax intricacies make professional guidance vital when settling business debt.
Beware of Debt Settlement Scams!
Many so-called “debt settlement” companies overpromise, charge excessive fees, and fail to deliver results. Common problems include:
- Large upfront payments before settling debts
- Advice to stop paying creditors entirely
- Failure to get written confirmation of settlements
- Surprise tax bills on cancelled debt
Reputable firms help clients avoid these pitfalls. Verify state licensure, client reviews, fees, and success rates before enrolling with any debt settlement provider.
Could Bankruptcy Help My Alabama Small Business?
For some companies, bankruptcy may provide the best path to financial recovery. Common bankruptcy options for businesses include:
- Chapter 7 – business closes and assets liquidated to pay creditors
- Chapter 11 – business restructures and reorganizes debts under court oversight
- Chapter 13 – sole proprietors restructure personal debts with repayment plan
The optimal bankruptcy strategy depends on the size of debts as well as business goals, assets, and liabilities.An experienced Alabama bankruptcy attorney provides key guidance:
- Analyzing when bankruptcy makes sense
- Selecting the appropriate chapter
- Navigating court procedures and paperwork
- Building a post-bankruptcy recovery plan
While allowing a business to eliminate debt, bankruptcy also comes with major downsides like legal fees, damaged credit, and public records. Most firms should only view it as a last resort option.
What is the Merchant Cash Advance Approval Process?
The typical merchant cash advance approval timeline includes:
- Application – 10 minutes to complete online application
- Review – Underwriting checks business documents – 1 to 3 days
- Approval – Receive term sheet with advance details – 24 hours
- Contract – Sign final MCA agreement – 24 to 48 hours
- Funding – Money wired after signing contract – 24 to 48 hours
The entire process can take as little as 2 to 4 days from completing the MCA application to getting the lump-sum payment.Speedy access to funds makes MCAs enticing. But the snowballing high costs overshadow short-term cash flow relief.
Seek Legal Guidance Before Agreeing to a Merchant Cash Advance
The fast approval process may pressure business owners to sign MCA contracts without fully grasping the terms. Alabama attorneys recommend due diligence before signing including:
- Researching the MCA provider’s reputation and complaints
- Consulting a lawyer to review agreement terms
- Comparing financing options like business loans
- Crunching numbers to understand total repayment costs
- Assessing if revenue can cover daily/weekly payments
Getting legal guidance prior to finalizing a merchant cash advance agreement can help avoid critical mistakes. If cash needs are immediate, discuss requirements and risks with counsel before proceeding.
What to Do if Facing Legal Action From an MCA Company
If a merchant cash advance provider takes legal actions like:
- Freezing merchant accounts
- Filing an arbitration case or lawsuit
- Threatening to seize assets or garnish wages
Consult an attorney immediately. Time is of the essence. An Alabama MCA lawyer can assess defenses based on:
- Failure to comply with state lending laws
- Confusing or contradictory contract provisions
- Improper use of personal guarantees
- Unreasonable repayment terms
Acting quickly maximizes options. The lawyer can try to negotiate a settlement or build a case to invalidate the agreement.
