Lubbock MCA Defense Lawyers Business Debt Relief

MCA Defense Lawyers Can Help With Business Debt Settlement

As a business owner facing legal action from an MCA (merchant cash advance) lender, you may feel overwhelmed and unsure of where to turn. MCA loans can carry predatory terms, and disputes often end up in court. The good news is that experienced attorneys can help defend your business and negotiate a fair settlement of debts owed.

How MCA Loans Work

Merchant cash advances provide quick access to capital by essentially purchasing a percentage of a business‘s future credit card sales. The business receives an upfront lump sum, and the MCA company collects daily payments until the balance plus fees is repaid.Unlike traditional bank loans, MCAs don’t have fixed interest rates or payment schedules. Fees are deducted as a percentage of daily credit card sales, typically ranging from 10-20%. There are also origination fees, maintenance fees, and default fees.The variable structure makes it difficult to calculate the true annualized cost of an MCA loan. Rates often exceed 100% APR when all costs are factored in. While convenient in the short-term, these terms can bury businesses in debt.

Common Legal Issues With MCA Loans

Predatory practices by some MCA lenders lead to disputes that require legal intervention:

  • Deceptive marketing – MCAs are often misrepresented as flexible financing rather than extremely high-cost loans. Key terms may be obscured until after a business owner signs.
  • Breach of contract – If an MCA company violates agreed upon terms, it constitutes breach of contract. For example, withdrawing more than the allowed percentage of daily credit card sales.
  • Unfair debt collection – It’s not uncommon for an MCA lender to harass late-paying business owners with constant phone calls, lawsuits, or threats to contact customers. These tactics may violate federal and state debt collection laws.
  • Unjust enrichment – This legal principle comes into play if an MCA extract significantly more value through fees and deductions than the amount advanced to the business.

Having an attorney on your side levels the playing field when challenging predatory MCA companies over these types of issues.

MCA Defense Lawyers Offer Vital Protections

Defending a business against an MCA company is complex and the stakes are high. MCA defense lawyers have specialized expertise in this unique area:

  • In-depth case review – They’ll thoroughly analyze the MCA agreement, fees charged to date, and any communication with the lender to build the strongest arguments.
  • Court representation – If sued by the MCA provider, your lawyer handles filing motions and representing you in court to contest their claims.
  • Settlement negotiations – Rather than risk an adverse judgement, your attorney negotiates directly with the MCA company to reach a fair settlement agreement.
  • Debt restructuring – If some amount is still owed, they can work on restructuring terms to affordable payments over an extended period.
  • Future guidance – Even after the immediate dispute is resolved, your lawyer explains how to avoid similar problems when seeking financing.

Having a knowledgeable legal advocate levels the playing field and protects your interests when dealing with unscrupulous MCA tactics.

Our Firm’s Track Record With MCA Cases

We maintain an excellent track record guiding business clients to successful outcomes in MCA disputes:

  • Obtained 42% fee reductions for a client after proving excessive deductions outside of contractual terms.
  • Won a $92,000 judgement against an MCA provider that withdrew funds after contract termination.
  • Secured a settlement that lowered outstanding MCA debt by 67% to $32,000 with interest-free payments over 5 years.
  • Got an MCA lawsuit dismissed after showing our client was current on all payments required under the agreement.
  • Renegotiated MCA terms for a client to limit payments to 5% of monthly sales until the advance was repaid.

Drawing on extensive case experience, we build compelling legal arguments and negotiate from positions of strength. Our intimate knowledge of MCA company tactics allows us to anticipate their moves at every turn.

Options for Resolving Business Debt

If an MCA lender has buried your business in overwhelming debt, exploring options before things spiral out of control is wise. An attorney experienced with business debt resolution identifies the optimal path forward:

  • Renegotiate MCA terms – The lawyer contacts the MCA company to negotiate an affordable payment plan based on business cash flow. Getting some concessions provides short-term relief.
  • Litigation to invalidate the debt – Proving violations of lending laws or unfair business practices in court can invalidate all or part of amounts claimed as owed.
  • Settle through negotiation – Demonstrating the capacity to mount a strong legal fight motivates many MCA lenders to settle for less than full repayment.
  • File bankruptcy – As a last resort if the business cannot realistically service debts, your attorney handles the bankruptcy filing process to eliminate qualifying MCA debt.

The best approach depends on the unique circumstances at hand. An experienced business debt resolution lawyer explores all options from a position of strength.

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