BOSTON MCA DEFENSE LAWYERS

Fighting For Your Rights, Every Step Of The Way And Saving Your Business

Are you a business owner in Boston, who is struggling with a merchant cash advance (MCA)? Do you worry about potential legal problems that might happen because of unpaid MCA debt that now goes to collections? We’re DelanceyStreet.com, a top tier business debt relief company based out of NYC, who is helping business owners nationwide. Today, we want to share important legal information about MCA defense, and what to expect if your MCA lender tries to take legal action. Many businesses in Boston take an MCA to get out of the slow season, but sometimes that can destroy your business.

WHAT IS A MERCHANT CASH ADVANCE?

A merchant cash advance (MCA) is not a loan. An MCA is a type of financing that was created by alternative lenders who wanted to give you an advance on your future credit card sales. Why does this matter? Because the rules for MCAs can be different from typical bank loans, and missing payments might lead to legal challenges.

POSSIBLE PENALTIES AND CRIMES WHEN YOU DEFAULT ON AN MCA

Could You Face Criminal Charges?

Most MCA financial cases are civil matters, meaning you could be sued for a breach of contract if you fail to pay. This is a civil issue, not criminal. But that doesn’t mean it can’t get criminal. Still, there are times when a lender might claim that a MCA borrower committed fraud. Fraud that was proven in court can lead to fines or jail time. If an MCA lender believes you hid your financials or submitted fake bank information, then the lender might ask law enforcement to investigate. This can result in a criminal inquiry.

Penalties that were assessed in MCA cases can include:

• Financial Judgments
  A judge who finds you liable can order you to pay money. This money might include the principal, interest, legal fees, and other punitive costs.
• Property Liens
  Property that was used as collateral might be liquidated if you cannot pay the judgment.
• Damaged Credit
  Credit scores can drop. This can limit your future borrowing options. If you personally guaranteed the MCA, it can result in your credit score suffering.

Criminal liability is rare in MCA disputes, but if prosecutors find lies or deception or fake bank statements, you could face charges that might result in hefty fines or even prison time. To learn more about consumer fraud and the laws protecting borrowers, you can visit the Federal Trade Commission (FTC) website at https://www.ftc.gov/. Even though this site focuses heavily on consumer topics, it offers great information on fraudulent practices that could also apply in business disputes.

EXAMPLES OF EVIDENCE THAT MIGHT BE USED AGAINST YOU IF YOU COMMIT A CRIME

• Emails that were sent between you and the lender. These emails may show promises or omissions of facts. If the lender claims you misled them, these emails might be used in court to prove the lenders case.
  Consequence: A judge who sees clear contradictions might rule in the lender’s favor.
• Financial Statements that were incomplete. If your profit-and-loss statements don’t match what you told the lender, it can raise suspicions. The lender might suspect you lied to them, or gave them fake documents.
  Consequence: You may end up facing accusations of hiding assets or lying.
• Applications that were falsified. A false statement can be used to show deception.
  Consequence: Fraud allegations might increase penalties and lead to criminal investigations.

WHAT DO MCA LENDERS THINK WHEN YOU DEFAULT OR ARE ABOUT TO DEFAULT?

Lenders who offer MCAs often feel they are being cheated if they don’t get their payments on time – they assume you’re just trying to play the system. The lender made an assessment, based on your word, you could repay the loan. If you default in the first 30 days, they’ll suspect you had no intention of repaying the MCA in the first place. Lenders that provided funding based on your sales might argue that you agreed to specific terms and that you had an obligation to keep making daily or weekly payments. They might say they’re only protecting their business interests.

From their point of view, a business owner who took an MCA, and who violates the agreement is in default, and the lender might want to file a lawsuit quickly. They may seek a confession of judgment if one was signed, which can let them enter a judgment against you without a long court process.

WHAT DO WE THINK?

We at DelanceyStreet.com understand that small business owners, who were trying to stay in business, might need a financial lifeline at times. Sometimes, you sign an MCA to keep your business doors open and need an immediate infusion of money. You might never intend to skip payments or commit fraud. We know life happens, and we want to defend you by discussing your options, explaining your rights, and helping negotiate a better outcome.

STRATEGIES FOR DEFENSE

1. Check the Contract
   A contract that was poorly written can include terms that are not enforceable.
   Consequence: When the contract is unclear, a judge could interpret the terms in your favor.

2. Prove Lack of Fraud
   If you show that you gave accurate information to the lender, it can refute the lenders case.
   Consequence: The lender will have a harder time proving that a crime was committed.

3. Show Coercion or Misrepresentation
   If the lender who sold you the MCA used aggressive or misleading tactics, we could argue the contract is void.
   Consequence: You might reduce your total debt or even have the MCA agreement canceled.

4. Negotiate a Settlement
   Many lenders who realize you cannot pay will consider lowering the debt if you offer a lump-sum payment or structured plan.
   Consequence: You can preserve your business, and the lender can still collect some of the money owed.

5. Invoke State Protections
   Massachusetts law offers protections for unfair or deceptive practices. For more information, see the Massachusetts Attorney General’s Office site at https://www.mass.gov/orgs/office-of-attorney-general-maura-healey.
   Consequence: If the lender violated consumer protection laws, it could weaken their claims.

FAQ: FREQUENTLY ASKED QUESTIONS

1. Is an MCA a crime?
   Having an MCA is not a crime. Failing to pay the MCA can be a breach of contract, but criminal charges might follow if there is proven fraud. Most MCA default cases do not go that far.

2. What should I do if I am sued?
   Call an MCA attorney right away. Evidence that was prepared early can help us build the best defense. Consequence: If you wait, lenders can get a default judgment, which can lead to wage garnishments or property liens.

3. Could my personal assets be at risk?
   If you signed a personal guarantee, assets that belong to you personally may be in jeopardy. Consequence: You might lose personal savings or property.

4. Does bankruptcy eliminate MCA debt?
   Sometimes, yes. But an MCA lender who believes there was fraud might oppose the discharge. Consequence: You could still end up repaying debt in certain situations.

WHY WORK WITH DELANCEYSTREET.COM?

We have experience negotiating debt settlements with MCA lenders, and we understand how to protect clients from lawsuits or predatory practices. We have experience working virtually every single MCA lender. We know their personality, how they operate, what they do, etc. Our team that was dedicated to defending you can file the right motions, talk to the opposing counsel, and help you settle or fight in court. We pride ourselves on focusing on small businesses that were threatened by unfair debt obligations. Because we’re a top tier business debt relief company, we’re skilled at finding solutions that really work.