MCA Defense Lawyers Can Help With Business Debt Settlement

As a business owner facing financial hardship, you may feel overwhelmed trying to manage your debts. Merchant cash advances (MCAs) can provide quick access to capital, but their high rates and aggressive collection tactics can compound your problems. Working with experienced MCA defense lawyers provides the best chance to negotiate reasonable settlement terms so you can move forward.

How MCAs Work and Why Settlement is Needed

Merchant cash advances provide funding based on a percentage of future credit card sales. Unlike a loan, daily payments fluctuate based on sales volume. There is no set end date – you pay until the full amount plus fees is repaid. This open-ended structure means costs often spiral out of control.While MCAs market themselves as not being loans avoiding usury laws, their effective interest rates frequently exceed 100% APR. When you fall behind, collection harassment and lawsuits follow trying to seize business assets or personal guarantees.Settling outstanding MCA debts for less than owed is usually the most viable path forward for distressed business owners. However, collectors rarely agree to reasonable terms without legal advocacy.

How Defense Lawyers Force Settlement on Fair Terms

MCA creditors rely on bullying tactics, but fundamentally they prefer some payment over none. Experienced defense lawyers use legal leverage to bring them to the table. Common strategies include:

• Contesting personal guarantees due to improper disclosures or coercion
• Asserting violations of state laws against unfair/deceptive practices
• Threatening countersuits for overly aggressive collection activities
• Disputing underlying default through forensic accounting

Skilled negotiators pressure collectors to settle by posing credible legal and financial threats. Though outcomes vary case-by-case, settlements typically resolve 40-60% below total claimed obligations.

Key Benefits of Using Specialized Legal Help

Navigating complex MCA settlement negotiations requires expertise beyond typical business lawyers. Specialized defense firms offer significant advantages:

• Deep knowledge of MCA creditor behavior and pressure points
• Access to network of consultants including forensic accountants
• Familiarity with changing state/federal collection laws
• Experience managing interrelated business debts like payroll taxes

Reputable defense lawyers also contractually commit to reasonable fees aligned with settlement savings. Paying only if/when a favorable deal is reached.

What to Expect in the MCA Settlement Process

While each case follows a unique trajectory, the MCA settlement process generally involves:

1. Investigation and Strategy Development

Counsel thoroughly reviews the merchant cash advance agreement, business records, and collection history to map the situation and identify vulnerabilities. After gaining clarity on exposures, leverage points, and business goals, settlement strategy is honed.

2. Formal Settlement Demand

A detailed settlement offer is sent formally laying out disputed issues regarding the MCA’s validity and enforceability while providing financial analysis. The letter explains why claims should be resolved on significantly discounted terms compared to amounts sought.

3. Negotiations and Document Drafting

Settlement proposals go back-and-forth with creditors. As negotiations advance, counsel prepares a term sheet and settlement agreement stipulating resolution details, releases, and remedies if either party breaches.

4. Closure and Implementation

Once a written settlement is signed, creditors dismiss all legal actions. The business owner arranges payments per the deal’s schedule and timeline while focusing on recovery.Having an experienced defense lawyer drive talks to conclusion is key to securing MCA relief and moving on. We invite you to schedule a free consultation so we can start helping your business today.

Frequently Asked Questions

How long does the settlement process take?

The timeline varies widely based on the complexity of issues and creditor behavior, but often concludes within 4-8 weeks from formal retention of counsel. Simple agreements may resolve faster while difficult negotiations take longer.

What information do you need for a free consultation?

In order to provide specific advice during a free call, please have available copies of all MCA agreements, recent bank statements, tax returns, and collection notices received. We can still talk generally without these documents, but having them speeds meaningful guidance.

Who should I include in settlement talks?

If you guaranteed an MCA personally or have partners/shareholders, it is wise to include them in discussions. Early alignment prevents surprises and complications later. However, the final decision to settle rests with the business entity itself.

What are typical settlement percentages?

Outcomes vary widely, but for businesses with legitimate financial hardship defense lawyers often settle MCA debts for 40-60% below amounts sought. Some agreements go even lower when strong legal or evidentiary issues exist. We tailor strategy to your unique situation.

About Delancey Street Associates

Delancey Street Associates helps small business owners negotiate, settle, and restructure unsustainable debts accrued from merchant cash advances, business loans, payroll taxes, and other obligations. Our experienced team leverages legal tools and financial analysis to compel reasonable resolutions so you can return focus to your company’s growth and profitability.

Contact Our Defense Lawyers for a Free Consultation

To discuss your business’ situation in complete confidence with an MCA defense lawyer, schedule your free call today. An experienced member of our team will answer any questions and provide specific advice regarding your options. Take the first step and let us help negotiate your path to financial freedom!