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MCA Defense Lawyers Can Help With Business Debt Relief

As a business owner struggling with debt, you may feel overwhelmed and unsure where to turn. Merchant cash advance (MCA) loans can offer quick money but also come with high fees and aggressive collection tactics that exacerbate financial issues. The good news is that experienced attorneys can help business owners in these situations by providing defense against MCA lenders and guiding them through the debt relief process.

How MCA Loans Work And Why They Can Be Problematic

Merchant cash advance loans provide businesses with quick access to capital based on a percentage of future credit card and debit card sales. Rather than a traditional loan, the MCA company purchases a share of the business’s future receivables at a discount. This means they will collect daily or weekly payments until the balance has been repaid – often within just a few months.While fast and easy to obtain, MCA loans charge very high effective interest rates ranging from 40% to 350% APR. They also use aggressive collection tactics, like remotely accessing point-of-sale systems to withdraw more money if payments fall behind. Many businesses struggle to keep up with the required daily or weekly payments, resulting in fees and penalties that increase the payoff amount. Within months, businesses owe two, three or even four times the original loan amount.The American Fair Credit Council has likened some MCA tactics as similar to predatory lending. While MCAs are not technically loans, the National Consumer Law Center argues that they should still be subject to state usury laws regarding interest rate caps. As lawsuits and debate continue over MCA industry regulation, many businesses feel trapped in expensive contracts and don’t know where to turn.

MCA Defense Lawyers Can Challenge Unfair MCA Agreements

If you signed an MCA contract that you now realize contains unfair terms and fees that make repayment near impossible, there may be legal defenses to challenge the agreement. Experienced attorneys can review MCA contracts to spot unenforceable clauses that violate state laws regarding interest rates, collections practices and unfair contract terms.For example, a recent North Carolina Court of Appeals case found that an MCA agreement violated state lending laws concerning excessive interest rates. By classifying the MCA as a disguised loan, the court voided the contract and relieved the business defendants from having to pay.While laws and contract terms vary between states and individual MCA companies, a knowledgeable lawyer can determine if similar violations provide grounds to invalidate agreements. They can also defend against aggressive collections practices, like accessing point-of-sale systems without proper notice or authority.

Debt Relief Options For Struggling Business Owners

If an MCA agreement is legally valid and enforceable, debt relief solutions can still help business owners regain financial control. The first step is conducting a thorough review of all outstanding debts to understand the full scope of obligations. An attorney experienced with debt relief can then explore options like:

• Debt Consolidation – Combining multiple debts into a new loan with lower interest can reduce monthly payments. For businesses with strong credit or assets, banks may offer consolidation loans or lines of credit. Federal disaster loans are also potentially available depending on eligibility.
• Debt Settlement – Negotiating directly with creditors for reduced payoff amounts can eliminate chunks of debt. Lenders may agree to settlements when faced with the alternative of nonpayment if the business closes down. Settlements often require lump-sum payments.
• Chapter 11 Bankruptcy – Formally restructuring debts under court supervision stops collections activities while developing affordable payment plans. Chapter 11 can reduce total debts but has strict eligibility criteria for businesses to qualify.
• Chapter 7 Bankruptcy – Total liquidation where the court appoints a trustee to sell all business assets and distribute proceeds to creditors. Remaining eligible debts are legally discharged but the business must shut down.

An experienced lawyer guides business owners through the debt relief process, provides advice on the pros and cons of each approach, negotiates with creditors and handles required legal filings. Their involvement often increases the willingness of creditors to reach reasonable settlements or payment terms.

Why Delancey Street Lawyers Are The Right Choice

Delancey Street attorneys have extensive experience defending small business owners against MCA lenders and facilitating debt relief solutions. We are aggressive advocates, taking an empathetic tone while fully committing to protect our clients. Some key reasons to choose us include:

• Deep MCA Industry Knowledge – We stay on top of emerging legal strategies, trends and loopholes to best defend clients against unfair practices. No other firm matches our expertise.
• Proven Debt Relief Results – Our debt relief track record includes over $250 million of obligations restructured or eliminated for small businesses. We know what works.
• Reasonable Flat Fee Services – We charge reasonable fixed-price fees upfront so you know exactly what to expect without any surprises. Contingency arrangements are available in some cases.
• Personal Attention & Support – Each client works directly with an experienced lead attorney focused on your case. You won’t be passed between junior associates.

During an initial free consultation, we conduct an in-depth review of your situation to develop a legal strategy tailored to your specific business needs. Contact our office today to schedule a consultation. Our dedicated attorneys are ready to help you move forward.

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