Are you facing problems with a merchant cash advance (MCA) that was supposed to help your business grow, but ended up creating more debt than you can manage? Maybe you’re getting calls from lenders who want immediate payment, or you suspect that something about your MCA agreement was unfair. Regardless of your specific situation, you might be asking this important question: When should you hire a merchant cash advance attorney?

Below, we’ll explore this topic in a clear, easy-to-read format. We’ll share legal information that was borrowed from publicly available resources, and we’ll show how an attorney can help you protect your business, and even protect you personally. Remember, we are DelanceyStreet.com, a top tier business debt relief company based out of NYC that helps clients nationwide. We have an entire team that was assembled to help businesses find solutions, and that means we understand how merchant cash advance loans work, and how to negotiate with lenders.

UNDERSTANDING THE BASIC RISKS OF A MERCHANT CASH ADVANCE
A merchant cash advance is a form of funding that was designed to give you a lump sum of money in exchange for a portion of your future credit card sales. This might sound simple, but there are hidden risks that can lead to expensive problems. An MCA that was structured with a high factor rate or unfavorable daily repayment terms might trap you in a cycle of debt. That debt can lead to serious cash flow issues, which can cause you to miss payments and even risk default.

Once you default on an MCA, you may face:

• Collection actions that can include daily phone calls from creditors
• Legal threats that can include lawsuits and judgments
• Damage to your credit score that might stop you from getting other financing

When lenders aren’t paid, they often move quickly. They may file a lawsuit in order to seize your business assets. A lender who was misled by false paperwork or inaccurate financial statements can also seek extra monetary damages. If you do nothing, your business might fail, and that can harm you personally.

FLOW CHART OF COMMON MERCHANT CASH ADVANCE ISSUES
Situation -> Cause -> Consequence

1. Mounting Daily Repayments -> An MCA that was taken with a very high factor rate -> Long-term debt that you cannot escape
2. Default on a Payment -> Missed daily or weekly withdrawal -> Lawsuit that can include a confession of judgment
3. Potential Fraud Allegations -> Incorrect financials that were submitted on your MCA application -> Criminal charges that can lead to fines or even imprisonment

Criminal charges that are proven in court will result in permanent damage to your finances, and possibly to your freedom. That is why early help from a lawyer is crucial.

WHY LEGAL SUPPORT IS CRITICAL FOR YOUR BUSINESS
“Evidence that was illegally obtained will be thrown out.” This means that if a creditor tries to sue you by presenting false documents or by using unethical methods, the court can refuse to accept that evidence. However, you need an attorney who understands these rules, or else the evidence might slip through. If the court never notices the issue, you could lose your case, and that means you might end up owing even more money.

Attorneys who have experience with MCAs can help by:

• Identifying if your agreement had illegal terms
• Checking whether the collection attempts violated consumer protection laws
• Using your available defenses, so you have a stronger negotiating position

A merchant cash advance attorney who knows the ins and outs of this world can also guide you on what to do if your lender threatens a confession of judgment. A COJ is a legal document that you may have signed when you took out the MCA. It says that if you default, the lender can get a judgment against you without a typical lawsuit. This can lead to immediate bank account freezes or property seizures. A properly trained attorney can file the right motions, which help you fight back.

POTENTIAL PENALTIES, CRIMES, AND PUNISHMENT
Sometimes, business owners who fail to meet MCA obligations face more than just civil lawsuits. If a lender believes that a borrower intentionally lied on an application, or if there was any kind of fraud, that borrower can be reported to law enforcement.

Under 18 U.S. Code § 1343, which deals with wire fraud, a person who was found guilty of misrepresenting finances for financial gain can face large fines or possibly prison time. That outcome can ruin a reputation and cause a business owner to lose everything. If you suspect that your lender might accuse you of wrongdoing, speak to a merchant cash advance attorney right away. An attorney who is experienced in both civil and criminal matters will be able to guide you on:

1. How to respond to threats
2. How to avoid making self-incriminating statements
3. What to do if you’re questioned by investigators

Remember: Even if you made an honest mistake, you could still be tangled in a messy legal battle. Being proactive is the key. An attorney who has experience in this area will contact the lender, gather all relevant evidence, and try to demonstrate that there was no criminal intent. Waiting too long can lead to severe penalties, which can include default judgments or even arrest in the worst cases.

WHEN EXACTLY SHOULD YOU HIRE AN ATTORNEY?
Hire an attorney if any of the following points apply to you:

• You are receiving legal threats or lawsuit notices: Lawsuits that involve merchant cash advance defaults can proceed quickly, especially when a COJ is involved.
• You signed a personal guarantee: A personal guarantee that was part of an MCA agreement might put your home or personal assets at risk.
• You suspect fraud or unethical tactics: Some MCA providers violate consumer protection laws. If you see strange fees, or if the interest calculations seem higher than promised, you may have a valid claim.
• You want to negotiate debt relief: Attorneys who handle MCA negotiations can reduce what you owe, or lengthen your repayment plan.

We at DelanceyStreet.com are ready to assist. Our team is used to dealing with creditors who are aggressive, and we know how to handle complicated situations. We can help you figure out what your best strategy is, so you won’t be stuck panicking.

HOW WE DEFEND YOU: STRATEGIES WE USE
An MCA attorney who understands your rights can use different defenses or strategies. Below are some typical moves that might be relevant to your case:

1. Contract Review: An attorney will look at every line of your MCA contract, to see if it was unfair or illegal. If a clause that was buried in the agreement breaks a state or federal law, that part could be thrown out. When a contract clause is thrown out, you save money. You might also get a better settlement deal, which means your monthly payment goes down.

2. Negotiation and Settlement: Many lenders want something rather than nothing. If your attorney who was hired to protect your rights shows that you can only pay so much, a lender might reduce the total amount owed. This can let you avoid lawsuits, protect your assets, and preserve your credit.

3. Litigation and Court Representation: If the lender sues you, your lawyer can argue on your behalf in court. Evidence that was misunderstood by the lender can be refuted or clarified. If the lender used flawed methods to collect or prove your debt, that evidence could be suppressed. Once that evidence is suppressed, the lender’s claim might lose strength.

4. Confession of Judgment Defense: When you’re about to face a COJ, your attorney can show that the lender’s confession of judgment form was incorrectly executed or was not valid in your jurisdiction. If the COJ is invalidated, you can reclaim a fair chance to fight your case.

5. Criminal Defense Approach: If you’re accused of committing fraud, an attorney who has criminal law experience can help protect you from the worst punishments. Fraud charges that are proven in court can mean jail time, but an attorney can often show the prosecution why there was no criminal intent or enough evidence to convict.

REFERENCES TO GOVERNMENT WEBSITES
It’s always wise to do additional research. You can read about unfair or deceptive acts by visiting the Federal Trade Commission (FTC) at https://www.ftc.gov. If you have complaints about financial products, you can also explore the Consumer Financial Protection Bureau (CFPB) at https://www.consumerfinance.gov. These government agencies that were established to protect consumers can provide guidance on your rights, so you can understand the best path forward.

CALLING OUT POTENTIAL LEGAL CONSEQUENCES
Some business owners, who feel cornered, make the mistake of adding more MCAs on top of existing ones. This is called stacking. The consequence of stacking can be a never-ending cycle of debt, so big that you risk losing your entire business. A judge who notices that you kept taking more advances might be less sympathetic if the lender accuses you of recklessness or fraudulent intent. That is why you need professional advice. A single poor choice can lead to deeper legal troubles.

Consider another scenario: Evidence that was forged in your MCA application can lead to severe criminal charges. That is punishable by fines that can cripple your finances, plus potential prison time. The consequences are life-changing. With the help of an attorney, you can show the court that the mistake was not an act of fraud. Even if there was confusion, you want an expert on your side to communicate the correct facts.

HOW TO PROTECT YOURSELF
Below are some practical tips that might help you stay safe in an MCA situation:

• Keep Good Records: Organize emails, contracts, and bank statements that show the details of your merchant cash advance. A lender who sees that you have everything in writing might be less likely to push false claims.
• Communicate Early: If you can’t make a payment, contact the lender and try to work out a new arrangement. Lenders who see that you’re proactive might offer a payment plan. This helps you avoid lawsuits.
• Consult a Professional: Contact a business debt relief company that was built to handle these problems. We at DelanceyStreet.com provide merchant cash advance negotiation, business debt settlement, and more. We work closely with attorneys who were trained in financial law.

IF YOU’RE NOT SURE, GET A FREE CONSULTATION
We know that you might be unsure whether you really need a merchant cash advance attorney. We usually tell people: the earlier you seek help, the stronger your position will be. An attorney or a skilled negotiator who understands the specific rules about MCAs can identify potential violations, push for a favorable settlement, or defend you in court.

We can help you by providing:

• Immediate evaluation of your MCA contract
• Clarification of any personal guarantees
• Assessment of whether a confession of judgment is in play
• Negotiation strategies that aim to reduce the total you owe