Missouri MCA Defense Lawyers
Missouri business owners who’ve taken out merchant cash advances (MCAs) often find themselves trapped by predatory lenders, and that’s where an MCA defense lawyer steps in. The lenders think they have all the power – but they don’t. You’ve got rights, and we’re here to protect them. MCAs are like quicksand. They lure you in with the promise of fast cash but bury you under insane interest rates and daily deductions. Missouri MCA laws don’t allow lenders to do whatever they want, but they’ll try to trick you into believing otherwise. The biggest misconception business owners have is that because they signed a contract with an MCA lender, they’re automatically bound to every unfair term. That’s not true. Missouri law recognizes substantive unconscionability – meaning that, if a contract is extremely unfair, it can be struck down.
The Power of Substantive Unconscionability
Let me tell you about substantive unconscionability. In Missouri, courts look at whether the terms of the contract are so unreasonably favorable to one party that they become unenforceable. This is huge in MCA defense cases. Take Gateway ex rel. Jacoby v. Blue Ridge Bank (2020), where a Missouri court struck down terms of a financial contract because it placed all the risk on one party. MCA contracts often do this – forcing businesses into impossible repayment terms. And guess what? That’s not legal. Missouri’s merchandise practice laws also give business owners a fighting chance. MCA lenders often misrepresent the terms of the agreement or hide fees. Under RSMo Section 407.025, that’s illegal. Misrepresentation and fraud invalidate contracts. We use that.
Fraud and Misrepresentation in MCA Contracts
MCA lenders will argue the contracts are ironclad. They’ll say, “You signed it. Too bad.” But Missouri courts have repeatedly upheld the principle that fraud or misrepresentation during contract formation makes it void. Remember the law: RSMo Section 432.050. Another key defense is proving the lender violated Missouri’s lending laws. MCA lenders often disguise their loans as “purchases of receivables” to avoid being regulated like traditional lenders. But Missouri courts see through this. It’s just a loan dressed up in fancy language. Missouri courts have ruled on the importance of substance over form. It’s not about what the lender calls the deal; it’s about what it really is. In re Peyton (2021) saw a Missouri business owner win a case because the court recognized that the MCA was actually a loan.
Missouri Usury Laws: A Key Defense
And if the MCA is a loan, lenders may be violating Missouri’s usury laws. Missouri caps interest rates at 9% per year for loans. Yet MCAs charge astronomical fees, often disguised as “fees” or “charges.” MCA defense attorneys use this cap to argue for a partial victory. Speaking of fees, the Uniform Commercial Code (UCC) can also work in your favor. Many MCAs involve UCC liens on your business assets, but if the lender didn’t properly file or notify you, those liens can be invalid. Ever heard of Revised Article 9 of the UCC? The UCC helps us challenge MCA liens. Under UCC Section 9-203, a lender must meet strict requirements for a lien to be valid, including proper filing and notification. Without this? Your assets could be freed from their grip.
Fighting Confessions of Judgment in Missouri
MCA lenders are infamous for issuing confessions of judgment (COJs), where they try to force you to agree they can collect any time without notice. But Missouri courts often find these COJs are unconstitutional – depriving you of your right to due process. A major case to note is Fleming v. Missouri Dept. of Revenue (2019), where Missouri courts reaffirmed that due process is non-negotiable. COJs attempt to bypass due process – and that’s a violation of the U.S. Constitution. Missouri business owners can fight this. MCA lenders will threaten to shut your business down with COJs. But Missouri courts have consistently held that even if you signed a COJ, they won’t enforce it if it violates your constitutional rights. Always remember, contracts don’t override your basic rights.
Bad Faith and Misconduct in MCA Lending
One of the most effective defenses is showing that the lender acted in bad faith. Missouri’s laws protect against predatory lending practices, and MCA lenders often act deceptively, especially in the way they present terms. Bad faith is a powerful argument. In Missouri, acting in bad faith can void a contract under RSMo Section 400.1-203, which requires every contract to be executed in good faith. If we can prove the lender hid information or used deceitful practices, the contract might be invalid. What’s bad faith? Hiding fees, inflating charges, or failing to disclose how repayments will cripple your business. In MCA defense cases, it’s common to expose how lenders took advantage of the borrower’s financial stress. Missouri courts don’t tolerate that.
Exposing Garnishment Violations in MCA Cases
When MCA lenders garnish your accounts, they often overstep their bounds. Garnishments have strict rules, and if a lender takes more than they’re entitled to, that’s grounds for legal action. We’ve seen Missouri courts push back on these aggressive tactics. The key is challenging every single aspect of the MCA contract. MCA defense lawyers fight on all fronts – we question the fairness of the contract, attack fraudulent misrepresentations, and tear apart procedural issues like improper lien filings. Lenders will often argue that they’re just following the contract, but Missouri courts demand fairness. Contracts that are oppressive or put all the burden on one side get thrown out. We use legal principles to push back hard.
My Experience in Defeating MCA Lenders
I once had a client who was told by their MCA lender that they had no way out. But after challenging the lender’s hidden fees and unfair repayment terms, we were able to negotiate a significantly reduced settlement. This isn’t just a victory – it’s proof that you can fight back. Missouri courts also rely on restraint of trade arguments. If an MCA contract restricts your ability to do business or grow, that can be considered unlawful. It’s a complex area of law, but in certain cases, these restrictions are ruled unenforceable. Let’s talk about discharge by performance. Missouri law says that when one party fulfills their contractual duties, the contract is discharged. If your MCA lender tries to keep collecting after you’ve met your obligations, that’s illegal under RSMo Section 400.2-209.