IF YOU’RE LOOKING FOR A BUSINESS DEBT SETTLEMENT COMPANY, VISIT DELANCEY STREET. CLICK HERE NOW.

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MCA Defense Lawyers Provide Expert Assistance with Merchant Cash Advance Debt

Merchant cash advances (MCAs) can provide quick access to capital for small businesses. However, the terms of MCA agreements are often predatory, with exorbitant interest rates and aggressive collection tactics. If your business is struggling with MCA debt, specialized legal defense may be needed.

How MCAs Work and Why They Can Be Problematic

A merchant cash advance provides a business with a lump sum of capital in exchange for a percentage of future credit card sales. It is not technically a loan, so MCA companies can bypass state laws capping interest rates. However, the equivalent annualized interest rate often exceeds 100%.While MCAs provide fast money with minimal eligibility requirements, the payback can quickly become unmanageable. Many companies soon find themselves owing two to three times the original advance amount. The MCA company may then resort to daily debits from the merchant’s bank account or litigation to recoup the debt.

Common Abusive MCA Company Tactics

MCA companies often engage in unethical tactics to pressure merchants into signing unfavorable contracts and to maximize collections. Some common issues include:

• Misrepresenting or obscuring key terms of the agreement
• Charging exorbitant interest rates equivalent to over 100% APR
• Requiring personal guarantees making business owners personally liable
• Aggressive, harassing collections activity
• Attempting to garnish accounts or assets without proper legal basis

Merchants may feel intimidated and unsure of their rights when an MCA company plays hardball. The right legal advice can help business owners stand up to bullying.

How an MCA Defense Attorney Can Help

Defending against MCA debt recovery involves scrutinizing the original agreement for deficiencies and predatory terms. An attorney can also halt collections activity that violates state and federal law. An MCA defense lawyer may be able to:

• Negotiate a settlement for a fraction of the claimed amount
• Invalidate all or part of the agreement due to unlawful terms
• Block access to merchant accounts and levies against personal assets
• Counter sue for violations of lending laws or harassment
• Seek damages for the MCA company’s wrongful conduct

With an attorney’s assistance, it is possible to resolve MCA debt on much more favorable and affordable terms.

Key Defenses Against MCA Companies

MCA companies often overreach in their collection attempts, providing useful angles for legal counter attacks. An attorney can review the agreement to spot contractual deficiencies. Some potential defenses include:

• Usury violations – Interest rates over state limits may invalidate the contract
• Deceptive practices – Misrepresentations could void all or part of the debt
• Breach of contract – Collecting more than the terms allow is actionable

• Improper debt collection tactics – Harassment violates federal and state law
• No personal guarantee – Owners cannot be held personally liable absent a valid PG

• Arbitration clause – Seeking assets without arbitrating first may be unlawful

The MCA agreement may have other weaknesses providing leverage to invalidate the debt or stop collections activity.

Steps to Address an MCA Company Lawsuit

If an MCA company has already commenced litigation, prompt legal action is advised. An attorney can remove the case to federal court if the MCA company’s state court choice seems unfavorable.The attorney can also petition the court to halt any interim collections activity pending resolution. This can stop account levies or attempts to freeze assets.Initial legal priorities typically include:

• Remove to federal court (if complaint filed in state court)
• File an answer denying allegations
• Send cease and desist letter regarding collections
• Petition for injunctive relief to stop collections activity

• Assert counterclaims for usury, fraud, harassment, etc.

• Launch discovery process to obtain company documents

An aggressive posture combining defense and offense is generally advisable when sued by a predatory MCA company.

The Benefit of Experienced Legal Representation

Navigating a business debt dispute without an attorney is extremely difficult, especially when the opposing party utilizes unethical tactics. MCA companies exploit lack of legal knowledge and intimidate business owners into accepting unreasonable repayment terms.The benefits of working with an MCA defense lawyer include:

• Recognizing improper conduct that violates law
• Leveling the playing field against seasoned collections attorneys
• Forcing the MCA company to prove and justify their claims
• Understanding complex contractual terms
• Presenting air tight arguments and evidence to the court
• Negotiating the most favorable possible resolution

Do not wait to engage specialized legal counsel if your business is struggling with potentially predatory MCA debt. The sooner you initiate a defense, the more leverage can be obtained. A skilled attorney can likely negotiate a fair settlement or defeat the MCA company’s claims altogether. Fight back and stand up for your business interests.

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IF YOU’RE LOOKING FOR A BUSINESS DEBT SETTLEMENT COMPANY, VISIT DELANCEY STREET. CLICK HERE NOW.

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