California Business Debt Settlement and Merchant Cash Advance Lawyers
Struggling with business debt in California? You may be able to settle your debts or get relief through legal options. Our business debt settlement attorneys can help.We are not a law firm, but we work with experienced lawyers as part of our comprehensive debt relief services. If you own a California business that is facing financial hardship from debts like merchant cash advances or business loans, contact us to learn more about your options.
How Business Debt Settlement Works
Business debt settlement, also called business debt negotiation, is a legal process to resolve business debts for less than what is owed. It involves negotiating with creditors and leveraging various laws and defenses to try to settle debts.Here is a basic overview of how business debt settlement works:
- A business facing unmanageable debts contacts a debt settlement company
- The debt settlement company analyzes the business’s financial situation
- They negotiate with creditors on the business’s behalf to settle debts, often for 30-50% less than what is owed
- The business makes monthly payments into an account to save up for settlement offers
- Once there is enough money to make a satisfactory offer, the debt settlement company presents it to the creditor
- If the creditor accepts, the debt is considered settled in full and no further payment is required on it
Settling business debt can resolve financial issues and provide relief, allowing businesses to continue operating. However, it also comes with drawbacks like potential tax implications and credit score damage.An experienced business debt settlement lawyer can advise you on the pros, cons, defenses, and laws around debt settlement in your specific situation. They can also negotiate effectively on your behalf.
Legal Defenses Against Merchant Cash Advance Lawsuits
Merchant cash advances (MCAs) are a common way for businesses to get quick financing by borrowing against future sales. However, their high rates and aggressive collection tactics can cause financial issues.If you took out a merchant cash advance and are now facing threats of legal action, there may be defenses available:Usury defenses – MCAs often charge very high effective interest rates, violating state usury laws that cap interest charges. California‘s usury law caps rates at around 10%. Usury may provide grounds to invalidate debts or get charges reduced.Unconscionability – If an MCA agreement contains unfair, deceptive, or abusive terms, it may be ruled unconscionable and unenforceable by courts. Things like excessive rates or giving up all legal rights could potentially make an agreement unconscionable.Breach of contract – If the MCA company did not fulfill promises made, like providing a specific amount of financing, it may give grounds for a breach of contract claim against them.Violations of lending laws – MCA companies claim to be purchasing future sales, not making loans. But if funds were actually provided as loans, violations of lending laws like TILA or state lending regulations may invalidate the debt.Other procedural or technical defenses – Mistakes in legal procedures or paperwork issues may also provide opportunities to fight back against threats of legal action over merchant cash advances.While MCAs can seem intimidating, an experienced lawyer can analyze the agreement to spot potential violations and legal defenses. Contact a business lawyer to discuss your options.
Seeking Legal Relief Through Bankruptcy
For businesses facing truly unmanageable debts, filing for bankruptcy may provide legal protection and relief. Here are some key things to know:
Chapter 7 bankruptcy – This liquidates eligible assets to pay creditors. Remaining dischargeable debts are wiped out, allowing you to start fresh. However, you must stop operating the business.
Chapter 11 bankruptcy – Often called reorganization bankruptcy, Chapter 11 lets you continue operating while working out a court-approved repayment plan. It can give breathing room to get finances back on track.
Chapter 13 bankruptcy – Intended for sole proprietors with regular income. Allows you to keep operating while repaying debts under a 3-5 year court-ordered plan.Bankruptcy can stop collections, lawsuits, garnishments, and foreclosures. It can also discharge personal guarantees on business debts. Each type of bankruptcy has different pros, cons and qualification requirements.Consult an experienced bankruptcy attorney to discuss whether it could be a good solution for your business‘s debts. They can provide legal advice tailored to your unique situation.
Our Business Debt Relief Services
If your California business is overwhelmed by debts for merchant cash advances, business loans, or other financial products, we may be able to help.We provide comprehensive business debt relief services, including:
- Business debt settlement and negotiation
- Working with experienced lawyers on your behalf
- Bankruptcy assistance if appropriate
- Ongoing advice and support throughout the process
Our dedicated experts fully analyze your business’s financial situation. We then leverage relevant laws, build legal arguments, and negotiate firmly with creditors to seek the best possible relief outcomes.We have extensive experience helping business owners resolve financial issues through settlement or bankruptcy. Contact us for a free consultation to discuss your situation. Call 212-210-1851 or visit our website at https://www.delanceystreet.com.
