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MCA Defense Lawyers Can Help With Business Debt Settlement

As a business owner struggling with merchant cash advance (MCA) debt, you may feel overwhelmed and unsure where to turn. MCA loans can quickly spiral out of control, leaving you facing aggressive collection calls, threats of litigation, and damage to your business‘s finances. However, there are experienced attorneys who can help – MCA defense lawyers specialize in protecting business owners from predatory lending practices. With an MCA defense lawyer on your side, you can explore options like debt settlement to resolve your financial obligations without sacrificing your livelihood.

How MCA Loans Work And How They Can Go Wrong

Merchant cash advances provide businesses with quick access to capital by essentially selling a portion of their future sales. Here’s a brief overview of how MCA loans work:

• The MCA company gives the business owner an upfront lump sum payment in exchange for a percentage of their future credit card and debit card sales.
• Instead of fixed monthly payments like a bank loan, the business owner repays the advance through daily payments which vary based on their daily sales volume. These payments are automatically withdrawn from their merchant account.
• The total repayment amount includes the original advance plus a factor rate that can range from 1.10 to 1.50. This means for every $100 borrowed, the business pays back $110 to $150.

While this flexibility and easy access to funds is appealing, MCA loans also come with considerable risks:

• Exorbitantly high effective interest rates often exceeding 100% APR
• Overly aggressive collections from MCA companies
• Threats of litigation or confession of judgement
• Potential to spiral into unmanageable debt

Many business owners sign MCA contracts without fully grasping these risks or understanding the terms. Before long, daily payments consume more and more of their sales revenue, eventually becoming unsustainable.This is where an MCA defense attorney can help mitigate the damage.

MCA Defense Lawyers Can Assess Your Case And Explore Options

If you’re struggling to keep up with overwhelming MCA debt, the first step is consulting an attorney experienced in this unique area. An MCA lawyer can:

• Review your loan contracts in depth – Since MCA companies often fail to fully disclose terms or rely on deceptive language, a lawyer can look for potential violations to fight back against.
• Analyze the validity of the debts – In some cases, an MCA defense attorney finds grounds to contest the enforceability of the agreements. This could include identifying improper procedures, unsupported default claims, or usury violations.
• Assess any threats against you – If the MCA company has taken aggressive actions like filing a lawsuit or threatening to seize assets, a lawyer can advise you on the best response.
• Discuss debt settlement – If debts are valid, settlement may be the most pragmatic option. An attorney serves as an intermediary in negotiations.

With an experienced MCA lawyer guiding you, you can make informed decisions on resolving debts without compromising your business.

Debt Settlement – An Alternative Path to Debt Resolution

If MCA debts are determined to be legally valid and enforceable, debt settlement may offer the most practical route to resolution. Debt settlement involves negotiating directly with creditors to pay a lump-sum that is less than the total amount owed. This avoids drawn-out legal battles and eases financial pressures on the business.Here is an overview of the debt settlement process when facilitated by an MCA defense attorney:

Consultation and Case Review

• The attorney thoroughly reviews the specifics of your situation including debts owed, contract terms, collection actions against you, and the financial standing of your business.

Settlement Strategy

• Based on case details, the attorney devises a debt settlement strategy that is realistic for your business’s finances. This includes settlement timelines and target lump sum amounts.

Negotiations

• Your attorney reaches out to MCA creditors and acts as an intermediary in negotiations. The goal is settling debts at an affordable percentage of total amounts owed.

Settlement Agreement

• When acceptable settlement terms are reached, detailed agreements are drawn up defining new payment obligations and releasing you from further liabilities.

Payment

• After contracts are signed, you pay the negotiated lump-sum settlement amount by an agreed-upon date. This resolves your MCA debts.

With an experienced debt settlement lawyer negotiating these agreements, you can resolve even severe MCA debt without crippling your business.

Why Legal Guidance Is Essential For Navigating MCA Debt

Attempting to communicate or settle directly with MCA companies rarely goes well. These alternative lenders often rely on ruthlessly aggressive tactics to extract maximum payments. Without legal counsel, business owners struggle to protect themselves.

Predatory Lending Practices

MCA companies face frequent accusations of predatory business practices that take advantage of small businesses. This includes:

• Charging extremely high factor rates and APRs sometimes over 200%
• Failing to adequately explain repayment terms and obligations
• Making unsubstantiated default claims
• Threatening litigation and asset seizures

Aggressive Collections

When businesses fall behind on payments, MCA lenders often employ relentless collections harassment like:

• Barrages of phone calls and emails
• Lawsuits and arbitration claims based on confusing contract language
• Freezing merchant accounts or seizing business assets

Power Imbalances

MCA companies have teams of aggressive lawyers versed in complex contract law. Small business owners rarely have the expertise to defend themselves. This imbalance of power and resources heavily favors the MCA firms.With so many factors working against you, trying to negotiate with MCA creditors rarely succeeds without legal backup.

How An Attorney Helps Even The Playing Field

The right lawyer levels the playing field when battling MCA companies by:

• Interpreting complex contracts – They identify deceptive terms and potential violations.

• Assessing legal options – They determine if grounds exist to contest the debt’s validity.
• Negotiating from experience – Attorneys regularly spar with MCA firms and understand their tactics.
• Speaking the language – Lawyers are fluent in complex legal concepts surrounding MCA lending.
• Providing emotional support – They help manage stress and uncertainty throughout the process.

Most importantly, MCA defense lawyers bring leverage to the negotiating table. The threat of potential litigation against the MCA company carries far more weight coming from a law office. This makes creditors more likely to offer reasonable settlement terms.

What To Expect When Working With An MCA Defense Attorney

If you decide to move forward with legal representation, here is an overview of what typically occurs:

Initial Consultation

The first meeting allows the attorney to review your situation, assess options, explain what to expect, and establish payment expectations. This is also an opportunity to get references and evaluate the lawyer’s experience.

Contract Review

The lawyer thoroughly examines all MCA agreements involved and looks for potential violations or unenforceable terms.

Strategy Session

After reviewing case specifics, the attorney outlines the recommended approach to either contesting the debt or negotiating settlement.

Settlement Negotiations

If settling debts, the attorney contacts MCA creditors, highlights leverage points, advocates for the most favorable terms possible, and keeps you updated on progress.

Resolution

The attorney finalizes agreements with MCA companies, confirming release of liabilities after you make the negotiated payments. At this point, the debts are resolved completely.While each case follows its own trajectory, you can generally expect resolution of MCA debts through settlement within 6 months when assisted by a competent lawyer.

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