Aurora Business Debt Settlement and Merchant Cash Advance Lawyers
Struggling with overwhelming business debt? There are legal options in Aurora, Illinois that can help provide relief. This guide covers using business debt settlement services and working with specialized lawyers to resolve issues with merchant cash advances.
How Business Debt Settlement Firms Help
Companies like Delancey Street offer customized programs to negotiate reductions on amounts owed. They have extensive experience working with all types of business creditors and collectors to make payoffs more affordable.The debt settlement process starts with a free consultation to review your situation. Then Delancey Street‘s experts put together a rescue plan outlining the best approach to start resolving your debt. They utilize multiple strategies to try to settle accounts for less than you owe.On average, enrolled clients have achieved 53% savings off their total debt balances. This type of reduction makes it much more manageable to clear business obligations.Delancey Street assigns a dedicated representative to personally handle all negotiations and communications with creditors on your behalf. This saves you time so you can focus on operating your company.They also offer industry-specific programs tailored to restaurants, retailers, contractors, medical practices, and more. Their attorneys can provide legal assistance with complex business debt issues as well.
How Can Lawyers Help With Merchant Cash Advances?
Merchant cash advances provide a convenient way for companies to access capital based on future sales. However, some providers use predatory tactics and charge exorbitant rates that small business owners struggle to pay back.Specialized lawyers can help in several ways if you face issues with an unfair merchant cash advance agreement such as:
- Reviewing the terms for violations of Illinois lending laws and regulations
- Drafting requests for debt validation from collection agencies
- Negotiating settlements for reduced payoff amounts
- Defending against lawsuits from providers
- Resolving credit damage from defaults
Reputable firms like McCarthy Law have extensive experience representing clients against unscrupulous merchant cash advance companies. Their attorneys understand the complex state regulations and can craft effective strategies to relieve financial stress.
Illinois Laws Related to Business Debt Relief
If you face aggressive collections or possible legal action over unpaid balances, Illinois statutes provide certain protections. Key laws include:
- Fair Debt Collection Practices Act – Limits harassment tactics collectors can use and sets requirements for properly validating debts.
- Consumer Fraud Act – Prohibits unfair and deceptive business practices. Applies to merchant cash advance providers.
- Consumer Installment Loan Act – Governs allowable interest rates and fees on small business financing agreements.
Violations of these regulations can potentially invalidate debts or lead to damages awards. So make sure any lawyers you work with have expertise applying the laws to your situation.
Will Debt Settlement Affect My Business Credit?
Business credit damage mainly occurs when companies stop paying creditors altogether. Debt settlement mitigates this risk by keeping accounts current while negotiating discounts.Delancey Street prioritizes maintaining positive credit. Their programs aim to reduce balances without further damaging scores.However, merchant cash advance defaults almost always lead to severe credit impacts. So obtaining legal help quickly is vital to try resolving these situations before they devastate your business credit reports.
What Are Appropriate Interest Rates and Fees for Merchant Cash Advances in Illinois?
Illinois statutes impose caps on allowable finance charges for various types of small business financing:
- Consumer Installment Loans – No more than 36% annual percentage rate (APR) on the first $1,000; 21% APR on amounts between $1,001 and $2,130; and 15% APR above $2,130.
- Commercial Loans Less Than $5,000 – Cannot exceed the greater of (a) 19% APR or (b) rate limit set for supervised loans under the Consumer Installment Loan Act.
- Commercial Loans $5,000 or More – No rate caps apply.
The Attorney General argues merchant cash advances function as illegal loans trying to circumvent state usury laws. Some providers charge equivalent yearly interest exceeding 100% APR on advances.So having legal counsel review your agreement can determine whether the rates and fees comply with Illinois regulations. Any violations provide leverage to negotiate settlements.
What Legal Defenses Work Against Merchant Cash Advance Lawsuits?
If a provider sues your business over a defaulted merchant cash advance, several defenses may prove effective:
- Improper debt validation – Collectors must provide complete proof of debt ownership if disputed. Cases get dismissed when validators lack adequate documentation.
- Unconscionable contract terms – Agreements with exorbitant rates or fees courts deem unfair can be invalidated.
- Regulatory violations – Proving financing charges or collection practices violate IL statutes can nullify debts.
- Inaccurate credit reporting – Suing providers that submit false default information to business credit bureaus can recover damages.
An Overview of Relevant California Laws and Regulations
California has numerous laws and regulations that can impact business debts and debt relief options in the state. Here is a brief overview of some key laws:
Usury Law – California has strong usury protections capping maximum allowable interest rates on loans and financing. Rates over around 10% can potentially be reduced or invalidated through legal action.
Lending Regulations – The California Financing Law and other regulations impose requirements around disclosures, paperwork, allowable fees, and lending practices. Violations may provide defenses against debts.
Unfair Competition Law (UCL) – Prohibits unlawful, unfair or fraudulent business acts. Can be used to fight predatory lending through lawsuits. Allows judgements forcing businesses to return profits or pay damages.
Debt Collection Laws – The Rosenthal Fair Debt Collection Practices Act and Federal Fair Debt Collection Practices Act forbid abusive debt collection methods in California. Violations can lead to statutory damages.
Wage Garnishment Protections – California has exemptions protecting a certain amount of wages from being garnished for outstanding debts. This helps prevent undue hardship from aggressive collections.
Bankruptcy Exemptions – California has generous property exemptions allowing filers to retain assets, equity, and income needed for a fresh start after bankruptcy. This makes bankruptcy more feasible for many.These examples illustrate just some of the impactful laws around debt and debt relief in California. Experienced lawyers can leverage these protections for the best chance at favorable outcomes for your business debts.
