MCA Defense Lawyers Business Debt Settlement

Businesses can accumulate significant debt for a variety of reasons – economic downturns, cash flow issues, expansion costs, and more. When debts become unmanageable, business owners may turn to merchant cash advance (MCA) companies for quick financing without realizing the full implications. MCA loans typically carry extremely high interest rates and aggressive collection practices. If your business struggles with MCA debt, specialized legal defense may provide a path forward.

Understanding Merchant Cash Advances

Merchant cash advances provide businesses with lump-sum financing in exchange for a percentage of future sales. MCA companies market these products as flexible financing options, but the reality often proves predatory:

• Interest rates ranging from 60% – 500% APR
• Daily or weekly repayment regardless of sales
• Repayment via automatic withdrawals from bank accounts
• Personal guarantees making business owners fully liable

Many companies regret accepting MCA financing once repayment terms become onerous and account withdrawals damaging. Some MCA lenders utilize deceptive marketing, fail to properly disclose terms, or obscure definitions of key terms like “small business loans” vs “merchant cash advances.”

Predatory Collection Practices

In addition to egregious interest rates, some MCA lenders rely on harassment to collect debts. Tactics may include:

• Hundreds of daily phone calls to business owners and staff
• Threatening lawsuits, criminal charges, or asset seizure
• Contacting customers about debts
• Refusing reasonable repayment proposals
• Withdrawing random sums from connected bank accounts

These practices inflict further damage on struggling businesses. Owners scrambling to appease collectors lose focus, staff feel stressed and demotivated, customers get spooked. The business sinks deeper as MCA repayments sap revenue required for survival.

MCA Debt Defense Lawyers

Specialized legal teams understand the MCA industry‘s predatory nature. Attorneys can analyze MCA agreements to find illegal terms or deceptive language. Where lenders harass or abuse collection practices, lawyers can intervene with demand letters or lawsuits seeking damages.

Strategies MCA Defense Lawyers Utilize

MCA defense lawyers employ a range of strategies to protect business clients, such as:

• Demand letters telling collectors to cease harassment
• Lawsuits seeking damages for abusive collection practices
• Contract reviews to identify unlawful terms or misrepresentations

• Settlement negotiations to reduce or restructure predatory debts

• Injunctive relief stopping automatic withdrawals
• Improper service claims contesting whether MCA agreements were properly delivered

• Usury claims stating interest rates violate state laws
• Personal guarantee challenges disputing whether owners must pay company debts

A recent case saw an MCA lender’s entire $500,000 lawsuit defeated after lawyers revealed the sales process misled the business owner.

Selecting a Specialized Legal Team

As MCA lenders aggressively pursue collections, struggling business owners need lawyers who understand both finance and defense:

Key Attorney Qualifications

• MCA industry experience – Deep knowledge of MCA lending practices, standards and regulations
• Predatory lending defense – Successful track record contesting usury, deception, harassment, etc.
• Contract review expertise – Meticulously reviewing terms to identify unlawful provisions
• Settlement skills – Proven ability negotiating reduced payoffs from a position of strength

• Support staff – Paralegals, researchers, assistants able to compile documentation

Due Diligence Questions

Business owners should vet potential counsel and ask questions like:

• How many MCA defense cases have you handled in my state?
• What tactics have you successfully employed against my MCA lender?
• Will you litigate against the lender if necessary? Who covers legal fees?
• What settlement percentages have you achieved for clients?
• Can you share examples of favorable verdicts or settlements?
• Who exactly will be working on my case? How will you keep me updated on progress?

Thorough vetting ensures business owners select appropriate legal firepower to battle predatory MCA debts.

The Debt Settlement Process

Specialized legal teams approach MCA debt disputes through a structured settlement process focusing on reducing balances to sustainable levels.

1. Case Review

Counsel conducts in-depth reviews of MCA agreements, repayment history, lender correspondence and collection activity. This provides clarity on the full debt picture so lawyers can tailor further actions.

2. Harassment Cessation

Lawyers issue cease and desist letters informing MCA lenders that continued harassment risks legal consequences. Where lenders disregard warnings, attorneys file lawsuits seeking damages.

3. Contract Scrutiny

Experienced attorneys scrutinize MCA contracts to identify unlawful terms that may provide leverage, including:

• Deceptive language misrepresenting the product
• Rates violating state usury laws
• Illegally high fees or penalties
• Personal guarantee issues
• Non-compete clauses restricting future financing

4. Settlement Negotiations

Using contract weaknesses and the threat of litigation, counsel engages lenders seeking to negotiate debt reductions. Settlements may lower balances, interest rates, or repayment timeframe.

5. Restructuring Agreements

Where settlements prove successful, lawyers document new agreements reflecting reduced payoffs. This provides businesses longer runways to repay debts and avoid bankruptcy.