Massachusetts Business Debt Settlement and Merchant Cash Advance Lawyers
If you run a small business in Massachusetts and are struggling with debt, you may be considering debt settlement or merchant cash advances to find some financial relief. However, these options come with legal implications that business owners need to fully understand before moving forward.
That’s where working with a lawyer can help protect your interests. At Delancey Street, our attorneys have extensive experience with business debt issues and can advise you on the best path for your specific situation.
How Debt Settlement Works in Massachusetts
Debt settlement involves negotiating with creditors to pay off debts for less than the full amount owed. This can help provide urgent cash flow relief when a business is facing financial hardship.
However, Massachusetts has specific laws regarding debt settlement practices to protect both businesses and creditors. Key things to know:
- Debt settlement companies must be licensed in Massachusetts to operate legally
- Fees charged by settlement companies are capped at 15% of the debt amount
- Settlement amounts must be placed in a secure trust account
- Creditors can still sue for the full debt amount during settlement negotiations
Working with a business lawyer for debt settlements ensures you stay compliant with state regulations. They can also negotiate better deals and defend you if creditors take legal action.
Merchant Cash Advances Have Risks Too
A merchant cash advance provides a business with a lump sum of capital in exchange for a percentage of future credit card sales. This can help cover short-term cash flow issues.
However, merchant cash advances come with steep fees and strict repayment terms:
- Advances can cost over 90% APR in fees
- Daily repayments are taken automatically from credit card sales
- If sales drop, repayment amounts can increase dramatically
An experienced lawyer can review cash advance contracts to protect you from predatory terms. They can also help refinance or alter agreements if the repayment burden becomes unmanageable.
Turn to Our Team for Legal Support
At Delancey Street, our lawyers have helped countless Massachusetts business owners resolve debt issues through settlements, refinancing, bankruptcy protection and more.
We take an empathetic approach, fully exploring all options before making legal recommendations tailored to your unique situation. And we offer flexible payment arrangements to ease the financial burden.To discuss your business debt case in a free consultation, call us today at 212-210-1851 or request a callback using our simple online contact form. Our team is here to help.
Common Defenses in Debt Collection Lawsuits
If your Massachusetts business is sued by creditors or collection agencies over unpaid debts, working with a skilled lawyer is critical to protect your interests.
While each case has unique details, some potential defenses to explore include:
Statute of Limitations – Debts fall off your legal obligation after a set period of time. In Massachusetts, this ranges from 3-6 years depending on debt type. If the statute of limitations has expired, the suit may be invalid.
Identity Theft – If debts were fraudulently opened in your business name, you may not be responsible for repayment. Proving identity theft can get cases dismissed.
Improper Service – Debt collectors must properly notify you of a lawsuit for it to be valid. If papers were not served correctly, the suit could get thrown out.
Debts Discharged in Bankruptcy – Any debts cleared in a past bankruptcy cannot be re-sued for later. This is a strong defense to get cases dismissed immediately.
Unfair Collection Practices – Massachusetts has laws barring harassment, deception, and abuse by collectors. Proving violations can invalidate the lawsuit.
Incorrect Debt Amounts – Debt collectors often sue for incorrect balances with excessive fees/interest added. Make them prove what is actually owed.The right lawyer can assess if any of these defenses apply and fight to get unverified or unfair lawsuits dismissed. Don‘t let collectors intimidate you – stand up for your rights.
Negotiating Better Debt Settlements
If your Massachusetts business decides debt settlement is the best path forward, working with an experienced attorney provides immense value in the negotiation process.
They bring legal knowledge plus in-depth understanding of creditor psychology to get optimal deals that check all the boxes:Get debts reduced by 50% or more – Lawyers exploit every angle in creditor agreements and state laws to push for maximum debt reduction. A good settlement slashes balances at least in half.Favorable repayment terms – Attorneys negotiate extended repayment plans on settled debts with low interest rates and flexible payment options. This prevents further cash flow issues.Avoid legal action – Creditors often agree to not pursue lawsuits/judgments during settlement talks mediated by lawyers. This provides temporary legal protection.Stop collections harassment – As your legal representative, attorneys can require collectors to only communicate through them. This removes the harassment and stress.The bottom line is skilled lawyers bring leverage, legal expertise and creditor relationships to settle your business debts on the best possible terms. Don’t leave money on the table – hire strong counsel.
Refinancing Unfair Merchant Cash Advances
If your Massachusetts business took a merchant cash advance with outrageously high fees and rigid repayment terms, refinancing with better conditions can provide tremendous financial relief.
The process typically involves:
1. Reviewing the existing agreement – A lawyer will assess your cash advance contract to identify predatory clauses and ensure legal compliance. Knowing the exact terms gives leverage.
2. Freezing repayments – Attorneys send the funder formal legal notice to temporarily halt daily repayments during refinance talks. This pauses the bleeding.
3. Negotiating a new contract – Lawyers exploit flaws in the original agreement plus competitive pressures to get you a much better cash advance deal with reasonable rates/terms.
4. Settling the old contract – The attorney negotiates a discounted buyout of the initial cash advance agreement. This cuts your repayment burden substantially.Refinancing cash advances requires financial and legal sophistication few business owners have. But at Delancey Street, our lawyers specialize in helping Massachusetts businesses escape unfair lending agreements.
Using Bankruptcy to Wipe Business Debt Slates Clean
If negotiations with creditors fail and Massachusetts business debts become severely unmanageable, bankruptcy protection can provide a fresh financial start.
Our lawyers are highly experienced with the bankruptcy process and can advise if it aligns with your situation. Key things we consider:
Chapter 7 Bankruptcy – This fully liquidates eligible assets to pay creditors, then wipes remaining debts clean. Best for businesses with minimal property who need urgent relief.
Chapter 11 Bankruptcy – Allows restructuring debts under court protection while keeping the business open. Payment plans get negotiated with creditors.
Chapter 13 Bankruptcy – Like Chapter 11 but for small businesses with simpler debt structures. Direct repayment plans get set up through the courts.
Protecting Assets – Attorney guidance maximizes assets exempted from liquidation/repayment in bankruptcy using all available legal strategies.The bottom line is business bankruptcies immediately stop creditor harassment and debt collection efforts. And our lawyers make the process as smooth as possible to restore your financial health.
Don’t Face Legal Action Alone – We Can Help
Dealing with business debt lawsuits, settlements, and alternative financing brings immense stress for entrepreneurs. But you don‘t have to tackle these issues alone.
The attorneys at Delancey Street offer both legal guidance plus compassionate support. We become your trusted advisors, outlining options while setting realistic expectations. And we customize solutions that make the most financial sense for your unique situation.If your Massachusetts business is struggling with debt obligations, reach out today for a free case review. Call 212-210-1851 or contact us online and our legal team will respond promptly to discuss next steps.
