Kansas MCA Defense Lawyers Business Debt Relief



MCA Defense Lawyers Provide Expert Guidance on Business Debt Relief

Getting behind on business debts can feel overwhelming and scary. Between merchant cash advances (MCAs), loans, lines of credit, and other financial obligations, it’s easy for companies to accumulate more debt than they can reasonably manage. If you’re struggling with business debt, know that you have options – and the expert MCA defense lawyers at Delancey Street are here to help.

How We Can Help With Your Business Debt Situation

Our legal team has extensive experience dealing with all types of business debt, including complex MCA agreements. We take an empathetic, customized approach to every client’s unique situation.Here are some of the ways we can help if you’re facing business debt challenges:

  • Review finances for clarity – We’ll conduct an in-depth analysis of your business finances to fully understand what debts are owed and identify options. This allows us to provide tailored advice for your specific circumstances.
  • Renegotiate terms – If an MCA or other agreement is too burdensome, we can often renegotiate the terms with the lender to make it more manageable. This may involve reducing payments, extending the payback period, or changing the payment structure.
  • Dispute unfair agreements – Some MCAs and other deals contain unfair or even illegal terms. We can dispute those agreements and fight to get them voided or changed to be more reasonable.
  • Defend against aggressive collections – Lenders often hire aggressive third-party debt collectors. We can intervene to stop harassment and intimidation tactics.
  • Explore debt relief options – If debts are truly unmanageable, we can advise on options like debt settlement or restructuring. Bankruptcy is sometimes on the table as well.

The key is – no matter how stressful your business debt situation is, take a breath. You have options and we can help guide you.

Common Questions and Challenges Around Business Debt Relief

Navigating business debt relief can be confusing. Here are answers to some of the most common questions we get:How are business debts different from personal debts?Business debts are solely tied to the company, not the business owner. However, for small businesses, owners often have to sign a personal guarantee, muddying the waters. An experienced business lawyer can help strategize based on your unique scenario.For example, if you personally guaranteed a business loan, the lender can pursue your personal assets – not just the company’s – if you default. A good lawyer could help limit that exposure.What are the pros and cons of declaring business bankruptcy?The main “pro” of bankruptcy is it can eliminate some debts entirely and stop aggressive collections. The “con” is it devastates your business credit rating. For some companies bankruptcy is necessary; others may have less damaging options. We advise on the best path forward for your small business.Can I be sued personally over my business debts?If you signed a personal guarantee, yes – lenders can sue you personally for those business debts. They can try to seize personal assets like your house, car, or bank accounts to satisfy the debt.An experienced attorney can review your agreements to clarify your exact exposure and defend appropriately if lenders overreach.Are there laws or protections around business debt collection?Yes! Debt collectors have to follow federal and state laws that prohibit harassment, deception, privacy violations, and other unfair practices. If collectors cross lines, we can send cease and desist letters or sue for statutory damages.Specific laws like the Fair Debt Collection Practices Act, Telephone Consumer Protection Act, and others offer protections you can leverage as a small business owner.What defense strategies are available when disputing an MCA?

  • If key terms weren’t adequately disclosed, that may invalidate the agreement
  • We scrutinize the fine print for illegal provisions that can alter contracts
  • If collectors use unfair practices, we can invoke consumer protection laws
  • In some cases, arbitration provides a favorable venue for dispute resolution
  • We also leverage procedural technicalities that can get unfavorable judgments reversed

The strategy depends on the specifics of your case. With our deep expertise fighting these instruments, we utilize every argument possible to put clients in the best position.

Unraveling the Complex Web of MCA Agreements

To understand how our lawyers can help with MCA debt, it helps to understand how these instruments work in the first place.What is an MCA? How is it different from a loan?A merchant cash advance (MCA) provides a lump sum of capital to a business in exchange for a share of future sales. It is not technically a loan, though it functions similarly in practice.The key differences are:

  • No set repayment terms – With an MCA, there is no set monthly payment or maturity date. The business pays back a percentage of daily credit card sales until the full amount is repaid (plus fees).
  • Quick approval – Because MCAs don’t require a strong credit history or collateral, almost any business can get approved quickly. This makes them tempting but dangerous.
  • Higher costs – The equivalent interest rates are a lot higher than business loans, often exceeding 100% APR when fees accumulate.

Why are MCAs so risky for borrowers?While MCAs provide fast cash, they come at a steep long-term cost. Tucked away in dense contracts are provisions that overwhelmingly favor the lender:

  • Mandatory daily repayments that siphon 15-35% of credit card sales
  • Personal guarantee and confession of judgment terms
  • Waived legal rights and class action prohibitions
  • Arbitration clauses that tilt outcomes in lender’s favor

How do lenders collect on MCAs?As soon as an MCA is signed, lenders can:

  • Take a percentage of daily credit card sales
  • Freeze or take money from linked bank accounts
  • Use personal guarantee to seize personal assets
  • File confession of judgment to force repayment
  • Report nonpayment to credit bureaus, damaging owner’s personal credit

They often engage aggressive debt collectors and sue business owners personally for repayment.

Why hire a lawyer to dispute an MCA?Navigating the MCA web is complex; doing it alone can have devastating consequences. Just some reasons to get legal help:

  • Identify prohibited terms or violations that can invalidate agreements
  • Stop collections activities like bank levies or credit damage
  • Renegotiate more reasonable repayment terms
  • Defend against personal judgment or guarantee enforcement
  • File counterclaims if collectors use illegal practices
  • Have an advocate to negotiate settlements or payment plans

Don’t face predatory lenders alone. Lean on a legal team that knows how to unravel unfair MCAs.

MCA Case Study: Unpacking a Common Situation

To make things less abstract, let’s walk through a hypothetical scenario that illustrates how our lawyers can help:John owns a small restaurant in Arizona that has struggled during COVID. When payroll and food costs mounted, he took out a $200,000 merchant cash advance to stay afloat.The MCA agreement requires John to pay back $280,000 total – the $200k plus $80k in fees – by allowing the lender to take 25% of daily credit card sales.At first, John thought the MCA would be manageable. But as inflation, staffing challenges, and the lingering pandemic cut into sales, he found himself falling behind on daily payments.The MCA lender began imposing late fees, siphoning 35% of each credit card transaction. They also froze his business checking account periodically when payments came up short.Frustrated John reached out to the lenders to negotiate lower payments, but they refused. Instead, they filed a confession of judgment against John personally for the full $280k.John was now facing escalating late fees on the MCA, plus a looming court judgment against him individually. That’s when he contacted our lawyers for help.

How Our Attorneys Helped John

Our legal team sprang into action with a multi-pronged approach:

1. Reviewed the MCA agreement

  • Identified prohibited terms, like waiving all future claims against the lender
  • Noted required disclosures were not adequately provided
  • Confession of judgment flagrantly violated Arizona law

2. Sent strongly worded letters

  • Informed lenders their practices violated state and federal law
  • Demanded they cease illegal collections activities immediately
  • Invoked consumer protection laws like the FDCPA and others

3. Negotiated with lenders

  • Leveraged evidence of legal violations to negotiate
  • Had illegal confession of judgment withdrawn
  • Worked out affordable long-term payment plan for John

While every situation is unique, this case study offers just a glimpse of how much leverage skilled legal counsel provides. Don’t face predatory MCA lenders alone.

Key Takeaways: How Our Attorneys Can Help Your Business

Dealing with mounting business debts make owners feel powerless and overwhelmed. But you have more options than you realize, and our lawyers can strategize the best path based on your specific situation.Delancey Street has extensive experience helping small business owners navigate complex debt issues. If you’re facing collections, unfair agreements, or other struggles, our empathetic team is here to help.To recap – some of the key ways our attorneys can guide you towards business debt relief:

  • Cut through complexity – Make sense of confusing debt agreements and obligations.
  • Renegotiate terms – Work with lenders to reduce burdensome payments.
  • Dispute violations – Invalidate illegal or prohibited contract provisions.
  • Halt collections – Stop harassment and intimidation tactics.
  • Explore options – Debt settlement, restructuring, bankruptcy if needed.

You have more options than you think. Don’t face business debt collectors alone – lean on experienced legal counsel. Relief may be closer than you realize.

About the Attorneys at Delancey Street

The lawyers at Delancey Street have over 20 years combined experience dealing with complex debt instruments like merchant cash advances (MCAs).We have successfully fought major banks, predatory lenders, and aggressive debt collectors across Arizona. Our track record includes:

  • Getting unfair loan or MCA terms invalidated
  • Stopping illegal collections practices
  • Negotiating reduced settlements on behalf of clients
  • Defending business owners against personal judgments
  • Forcing refunds of unlawful fees & interest charges



What do you think?

What to read next