Are you a business owner who was worried about daily MCA deductions? If so, you might be wondering whether it’s time to call an MCA attorney. If you’ve ever felt like your merchant cash advance is causing you to sink deeper into debt, you aren’t alone. DelanceyStreet.com is a top tier business debt relief company that was founded to help people just like you, and part of our mission is to explain legal rights when it comes to MCA agreements. This article is written for a high school reading level, so you can get the facts without needing a law degree.

What Is a Merchant Cash Advance (MCA)?
A merchant cash advance is a type of financing that was originally used by businesses who needed a quick lifeline. In exchange for a lump sum of money, the MCA provider takes a percentage of your daily or weekly credit card sales. This can be helpful if you need fast cash, but it can also become a serious headache when payments pile up. Often, business owners feel trapped by high fees, complicated paperwork, and endless calls from lenders.

Early Signs You May Need an MCA Attorney
Do you see default notices in your mailbox? Are you juggling multiple merchant cash advances at once? If you feel like your cash flow is being strangled, it might be the right time to speak to an attorney who was experienced in dealing with lenders. An attorney who was skilled in MCA negotiations can help you review your contract and see if there are any unfair terms. If you keep missing payments, and you’re frightened about potential legal action, you might need advice on how to avoid a worst-case scenario.

Common Pitfalls That Demand Legal Help

1. COJ (Confession of Judgment): A confession of judgment is a tool that allows a lender to get a judgment against you if you fail to meet the terms of your MCA. This is the type of clause that was extremely dangerous because the lender may not have to file a regular lawsuit against you before seizing funds.
2. Stiff Penalties: If you breach your MCA agreement, there are late fees, added interest, and even penalties that can double what you originally owed. Over time, you might feel like it’s impossible to keep up.
3. Accusations of Misrepresentation: A lender who was accusing you of lying on your application might threaten to file criminal or civil charges. Some creditors might claim you committed fraud, which can come with serious punishments if proven.

Crimes and Punishments Linked to MCA Defaults
Business owners, who were honest, rarely face criminal charges simply for defaulting on an MCA. However, if the lender thinks you provided false details about your revenue, used fake collateral, or took additional MCAs without disclosure (also known as “stacking”), you could face accusations of fraud. Fraud that was proven in court can lead to heavy fines, restitution orders, and, in extreme cases, jail time. Furthermore, a confession of judgment can allow the lender to freeze your accounts or seize assets. When your business can’t pay employees, that can cause more legal trouble and possibly lead to labor violations.

Official Government Resources
If you’re worried about potential fraud or want to know more about your rights, you can visit the Federal Trade Commission (FTC) at https://www.ftc.gov/ to see how they handle cases of unfair business practices. You might also want to check SBA.gov at https://www.sba.gov/ for guidance on managing business debt, or look at IRS.gov at https://www.irs.gov/ if you’re worried about tax implications tied to any forgiven debt.

Strategies for Legal Defense
You might be asking, “Can I really fight back if an MCA provider is demanding more money than I expected?” The answer is often yes. Here are a few strategies that an MCA attorney who was focused on business debt might use:

1. Challenging the Agreement
   If there is language that was misleading or if the MCA provider violated local or federal laws, an attorney can argue that the contract should be re-examined or even voided. Evidence that was illegally obtained by a lender might be thrown out in court. Evidence that was thrown out can lead to a weaker claim against you, which might reduce your total debt.

2. Negotiating a Reduced Balance
   Many lenders want to avoid the hassle of a lengthy court fight. An attorney who was knowledgeable about merchant cash advances can speak directly to the MCA provider and show that your business truly needs relief. This might allow you to pay a smaller portion of what you owe, which can help you stay afloat. Paying less money is a huge plus, but keep in mind that some lenders will try to tack on additional fees.

3. Arguing Unfair Collection Practices
   The Fair Debt Collection Practices Act (FDCPA) does not always apply to commercial debt, but it can apply to personal guarantees or certain abusive collection tactics. An attorney who was up to date with the latest legal developments may discover that the creditor crossed a line. If so, there could be grounds for a counterclaim or a settlement.

4. Protecting Personal Assets
   Many MCA lenders require a personal guarantee. This is a clause that was designed to make you personally liable if the business fails to pay. If you risk losing your home or personal savings, an MCA attorney can try to negotiate terms that protect your assets. This can be the difference between keeping your family financially safe and suffering a disastrous meltdown.

Flowchart: Do You Need an MCA Attorney?

Picture this like a short roadmap, showing how trouble with MCAs might spiral:

Step 1 -> You Miss a Payment
Consequence: Lender that was providing the MCA might add late fees, or threaten to file a confession of judgment.

Step 2 -> You Receive Default Notices
Consequence: Additional interest that was charged can stack quickly, causing your balance to skyrocket.

Step 3 -> Creditor Takes Legal Action
Consequence: Court fees, potential liens, or seizures of business assets can occur. At this point, your personal finances may also be at risk.

Step 4 -> Accusations of Fraud
Consequence: Criminal charges that were proven can lead to fines and possible jail time, in addition to damage to your business reputation.

When you see yourself sliding down this flowchart, you should consider speaking to an MCA attorney immediately.

Why Choose DelanceyStreet.com
At DelanceyStreet.com, we have an entire team who was devoted to helping business owners with MCA issues. We get it if you’re worried about going out of business. We have attorneys and negotiators who know how to create a plan that will reduce your debt, stretch out your payment schedule, and keep your business alive.

Open Communication
We believe that creditors want to hear from you. A lender that was left in the dark might assume the worst. When you join our program, we communicate with your lender right away. If you show that your business can’t pay the total amount, they’re often willing to negotiate.

Technical Knowledge
A merchant cash advance agreement that was written in legalese can be hard to understand. Our team will dissect the small print, identify potential traps, and let you know if you can push for better terms. We’ll also watch out for hidden clauses that might let a lender freeze your accounts overnight.

Lowering Penalties
When you have fees that were stacking up, you may need someone who knows how to cut those costs. We’re not afraid to negotiate with big lenders, and we aim to get your penalties reduced or eliminated. When your fees are cut, more of your money can go back into your business operations.

Potential Crimes and the Penalties
If a lender suspects you submitted false documents, you may face fraud allegations. Fraud that was proven can lead to large fines, a damaged credit record, or even prison in severe cases. It’s crucial to have an attorney who can show that you acted in good faith, or that you had no idea a document was inaccurate. Evidence that was coerced by a lender might be thrown out in court. Throwing out crucial evidence can weaken the criminal case against you, which means you might avoid heavy penalties or jail time.

Practical Steps Before You Contact an Attorney

1. Gather Your Contracts
   Have the documents that were emailed or sent via DocuSign. Check for any references to personal guarantees or COJ clauses.

2. Organize Communication Records
   Save emails, texts, or call logs that show what your lender told you about fees. If there is a contradictory statement that was sent, your attorney will want to see it.

3. Check Your Cash Flow
   Review your bank statements to see if you can afford any lump-sum settlement. A debt settlement that involves one big payment might convince a lender to negotiate.

4. Visit Government Websites
   Go to the Federal Trade Commission at https://www.ftc.gov/ or ConsumerFinance.gov at https://www.consumerfinance.gov/ to see how regulators handle shady lending practices. If a lender that was harassing you violates federal regulations, it strengthens your defense.

How We Defend You

1. Reviewing the Paper Trail
   Our attorneys look at how the MCA was set up, and whether the provider disclosed everything properly. If there was shady behavior, we flag it as a negotiation point.

2. Challenging Illegal Clauses
   We challenge any confession of judgment terms that were included without proper warnings. Some states have strict rules about COJs, and lenders can’t always enforce them if they broke the law.

3. Creating a Payment Plan
   If you’re a good candidate for settlement or restructuring, we’ll propose a plan that lowers your monthly costs. This approach might preserve your business without resorting to bankruptcy.

4. Court Representation
   If you end up in court, our attorneys who were knowledgeable in both state and federal litigation can argue on your behalf. We use every legal tool available to protect your assets and keep you out of criminal trouble.