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MCA Defense Lawyers Offer Hope For Businesses Struggling With Debt

Running a small business is extremely difficult, especially when it comes to finances. Many business owners turn to merchant cash advances (MCAs) to quickly access funds when traditional loans aren’t an option. However, MCAs often have predatory terms and can trap owners in a vicious debt cycle.If you find yourself struggling to repay an MCA, working with a knowledgeable MCA defense lawyer can provide critical relief. This article will explore common legal and financial solutions attorneys use to help business owners regain control of their finances.

How Merchant Cash Advances Work

Merchant cash advances provide businesses with fast access to capital in exchange for a percentage of future credit card sales. They seem easy at first, but have some major downsides:

  • Deceptively High Interest Rates – While not technically loans, MCAs carry interest rates exceeding 100% when fees are calculated.
  • Harsh Default Terms – Missing a few daily payments can trigger default. MCA companies can then raid bank accounts and put liens on assets.
  • Forced Arbitration – MCA contracts often have arbitration clauses, limiting legal options.
  • Difficult Early Repayment – Most MCAs lack an early payoff option without substantial fees.

As profits get swallowed paying high daily percentages, many owners find themselves trapped and overwhelmed. An experienced attorney can help fight back against predatory MCA tactics.

Negotiating Relief Through Settlements

The first step is attempting to negotiate a settlement. An attorney will review the agreement to find potential leverage for reducing the amount owed. Settlements provide immediate financial relief by:

  • Lowering the payoff balance
  • Establishing affordable payment plans
  • Removing defaults from credit reports
  • Halting aggressive collections and harassment

Settlements allow owners to move forward without the constant burden of crushing MCA debt.

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Leveling the Playing Field Through Litigation

If settlement talks fail, litigation may be an option. MCA companies often have arbitration clauses in contracts, but courts have increasingly ruled these unenforceable. An attorney can file lawsuits to:

  • Challenge unfair contract terms
  • Assert usury claims if interest rates violate state laws
  • Allege deceptive marketing and lending practices
  • Invalidate entire agreements under certain conditions

Suing levels the playing field and forces MCA companies to defend their practices. Favorable legal outcomes provide financial relief through awarded damages or by unwinding predatory agreements.

Exploring Bankruptcy Options

For extreme situations, Chapter 7 or Chapter 11 bankruptcy may eliminate MCA obligations:

  • Chapter 7 – Liquidates eligible assets to pay creditors, discharging remaining debts. Personal guarantees may still need repayment.
  • Chapter 11 – Allows reorganization and development of a repayment plan under court supervision.

While damaging for credit scores, bankruptcy grants a clean slate free from constant MCA debt collection harassment.

Finding the Right Attorney For Your Situation

As you search for legal help, keep the following tips in mind:

  • Seek extensive MCA-specific experience – General legal knowledge often isn’t enough.
  • Understand their negotiation record and strategy.
  • Compare law firms’ expertise with various legal solutions.
  • Get fee details in writing – Most work on contingency fees.

With an experienced MCA attorney as an ally, you can take back control of your finances. Instead of living in constant fear of merchant cash advance harassment, you can focus on business growth knowing your lawyer has your back.Don’t wait – the sooner you start exploring options, the faster you’ll find debt relief. Consult with a qualified attorney right away.

Common Legal Defenses Against Merchant Cash Advances

When facing a merchant cash advance lawsuit or aggressive collections, having an attorney in your corner levels the playing field. There are various legal arguments at their disposal to challenge predatory contracts.

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If agreement terms unreasonably favor the MCA company, courts can rule the contract unconscionable. This makes parts or the entire contract unenforceable. Grounds include:

  • Deceptively high cost terms
  • Misleading statements about consequences of default
  • Illegal or unethical conduct

Usury Violations

Though MCAs aren’t loans, calculating an equivalent interest rate based on fees helps determine usury violations. If rates exceed state maximums, courts may void agreements.

RICO Claims

The federal Racketeer Influenced and Corrupt Organizations (RICO) Act provides treble damages and attorneys fees for victims of certain “racketeering” activities. Plaintiffs have asserted MCA companies engage in RICO predicate acts through usury law violations and extortionate collection practices.

TILA Violations

The Truth in Lending Act (TILA) protects consumers in financial transactions through mandatory disclosures. Plaintiffs have argued insufficient disclosures render MCA contracts void.

What To Expect In MCA Litigation

Fighting merchant cash advance companies in court is complex, but understanding the key phases helps set expectations.

Pleadings Stage

The early case pleadings frame legal arguments. Plaintiffs assert claims in the complaint, while defendants respond with motions to dismiss. Attorneys on both sides battle over proper interpretations of the law.


During discovery, the parties exchange relevant documents and information through tools like interrogatories, requests for production, depositions, and more. Discovery reveals critical evidence to support each side’s position.

Dispositive Motions

Near the end of discovery, either party can file motions arguing the evidence compels a judgment in their favor without a trial. For MCA cases, plaintiffs may argue sufficient facts show usury violations or RICO claims, for example.

Settlement Talks

At any stage, the parties can pursue settlement negotiations to avoid further litigation costs and uncertainty. Experienced attorneys have a good sense of potential outcomes to help craft deals.


If no dispositive motions or settlements end the case, it proceeds to trial. Both sides present arguments, witnesses, and evidence to the judge or jury, who then determine a binding verdict.

See also  Los Angeles Merchant Cash Advance Lawyers and Business Debt Relief

Alternatives To Litigation

Fighting merchant cash advance companies in court can be time-consuming and expensive. Plus, there’s uncertainty over who might ultimately win. Understanding all options is important:

Debt Consolidation

Debt consolidation combines multiple debts into a single new loan, usually with lower interest rates. This simplifies payments into one monthly bill. While it doesn’t reduce overall debt, it helps manage cash flow.

Debt Management Plans

Debt management plans let credit counseling agencies negotiate with creditors to make paying off debts more affordable. This helps avoid default while working toward being debt-free.

Debt Settlement

Debt settlement involves negotiating an agreement for creditors to accept a discounted lump sum payment to consider accounts settled. This requires saving enough to make the payment while avoiding further default.

Beware Of Debt Relief Scams

When struggling financially, businesses may be attracted to dubious debt relief promises. Be very cautious of:

  • Companies charging large upfront fees
  • Guarantees they can eliminate most debts
  • Requests to stop communicating with creditors

Legitimate professionals will explain available options truthfully without unrealistic expectations or demands. They focus on sustainable plans protecting you and your business interests.

Consult An Attorney Before It’s Too Late

Facing MCA debt can be an extremely challenging and stressful situation. But experienced legal counsel makes a big difference – providing expertise, advocacy, and most importantly – hope. Don’t wait to seek help. An attorney can assess your situation and rapidly respond to lawsuits while aggressively pursuing the best possible financial outcome. With the right lawyer on your team, you can look ahead to brighter days, unburdened by constant merchant cash advance harassment.



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