Nevada MCA Defense Lawyers
Business owners: Struggling with a Merchant Cash Advance (MCA)? You’re not alone. These agreements can drain your cash flow, making it hard to keep the lights on. MCA defense lawyers are here to fight for YOU. Let’s break down what they do. What’s an MCA? An MCA isn’t a loan. Instead, it’s a purchase of future receivables—basically, they get a cut of your future sales. Sounds straightforward, right? But these deals are often written to favor funders, making it a trap for many.
These MCA contracts often take a percentage of your daily or weekly sales, meaning if your business slows down, you could be on the hook for payments that are impossible to make. That’s where defense lawyers step in! If your business cash flow dips, lawyers can renegotiate the payment terms, pausing payments or lowering the amount you owe each week. They use laws like the UCC (Uniform Commercial Code) to protect your rights. UCC filings let funders seize assets—lawyers stop that!
COJ Traps and State-Specific Laws
Confessions of Judgment (COJ) are another trap. A COJ is when a business agrees that a lender can get a judgment against them without going to court. It’s illegal in NY against out-of-state businesses. MCA defense lawyers know how to get COJs thrown out! Citing NY Law: In 2019, New York banned COJs for out-of-state businesses. New York Senate Bill S6395 prohibits lenders from using COJs to bypass the legal process. MCA defense lawyers use this law to protect businesses across state lines!
Not all states ban COJs. States like California, Colorado, and Ohio still allow them. This is why it’s important to hire a lawyer who knows state-specific laws. Your location matters! What if your bank accounts are frozen? MCA funders often file UCC liens to freeze your receivables. If you’re hit with a UCC lien, you might not be able to pay bills or employees. Lawyers can get these liens lifted.
Citing UCC law, MCA defense lawyers argue that if the MCA provider didn’t follow proper procedure, the lien is invalid. They’ll check if the funder filed correctly—if not, they’ll get it removed! What’s a UCC lien? It allows a creditor to claim your business assets if you default on the agreement. In states like Delaware and Pennsylvania, UCC liens are a common enforcement tactic. Defense lawyers fight these every day.
Misrepresentation and Contract Challenges
MCA lawyers will challenge the legality of your MCA contract. If the funder misrepresented terms or you were misled about repayment, your lawyer could invalidate the entire contract. That’s a huge win for you! MCA misrepresentation: Lawyers can argue that if a broker misled you about future loans or repayment, you might not be liable for the full amount. Courts side with businesses when funders use predatory practices.
MCA lawyers can also negotiate settlements. Even if your case doesn’t go to court, they can lower the total amount you owe through mediation. This can save your business thousands! One common strategy is to restructure the MCA. Instead of daily or weekly payments, your lawyer can negotiate for monthly payments that align with your cash flow. This keeps your business afloat. Another key point: If your lawyer finds that the MCA funder violated state usury laws, you could owe nothing. Some states have strict caps on interest rates. If the MCA violates those, the contract might be void.
In California, for example, there are strict caps on interest rates for certain types of advances. If your lawyer proves the MCA violated those, you might not have to pay a dime.
Litigation and Defense Strategies
If you’re sued by an MCA company, don’t panic. MCA defense lawyers are experts in litigation. They know how to stall the case, challenge the contract’s legality, and even get judgments vacated if they were improperly filed. Vacating a judgment: If a funder won a judgment against you through a COJ or default judgment, your lawyer can argue that you weren’t properly served. If successful, this can get the judgment thrown out.
Bankruptcy isn’t always the answer. While MCAs can be discharged in bankruptcy, lawyers often avoid this route by renegotiating terms. Bankruptcy should be a last resort. A skilled lawyer will exhaust all other options first. MCA defense lawyers also hold brokers accountable. Many MCA brokers lie, promising traditional loans after you’ve paid for a month. That almost never happens. Your lawyer can sue brokers for misrepresentation and get you damages.
If a broker misled you, your lawyer will sue them for damages. Brokers are held to fiduciary duty in some states, meaning they must act in your best interest. When they don’t, you can win big. MCA defense lawyers are familiar with breach of contract cases. If your MCA provider didn’t hold up their end of the deal—such as by charging fees you didn’t agree to—your lawyer can fight that in court.
Confession of Judgment Loopholes and Default Judgments
Confession of Judgment loopholes: If the COJ was filed in a state that doesn’t allow them, your lawyer can get it thrown out. Lawyers often find funders abusing this loophole to fast-track judgments. Citing New York’s 2019 ban on COJs, lawyers challenge these judgments aggressively. If a COJ was filed against you from an out-of-state lender, your lawyer can have it vacated.
In states like Utah, where COJs are still allowed, MCA defense lawyers can challenge the funder’s filing methods. If the court finds even a small technicality, the COJ can be overturned. Default judgments are another hurdle. If you missed court dates or weren’t properly served, lawyers can argue that you weren’t given proper notice. Many judgments have been vacated for this reason.
MCA defense lawyers specialize in contract rescission. If the terms of your MCA were unfair or illegal, they can have the entire contract undone. This is a powerful tool to free your business. You have rights under federal law, too. The Truth in Lending Act (TILA) protects businesses from unclear or deceptive financial terms. If your lawyer can prove violations of TILA, your MCA could be void.
Final Thoughts
MCA agreements are written to favor the funder, but a good defense lawyer can turn the tables. Whether it’s by challenging the contract or negotiating settlements, these lawyers fight for your business. If you’re struggling with an MCA, don’t wait. The sooner you get a lawyer involved, the better your chances of a favorable outcome. Your business depends on it.