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Denver MCA Defense Lawyers Business Debt Relief

February 24, 20246 min read

IF YOU’RE LOOKING FOR A BUSINESS DEBT SETTLEMENT COMPANY, VISIT DELANCEY STREET. CLICK HERE NOW.

 

Denver MCA Defense Lawyers Offer Hope for Small Businesses in Debt

Small businesses are the backbone of the American economy, providing jobs and economic growth in communities across the country. However, running a small business is filled with challenges, and one major issue many entrepreneurs face is overwhelming business debt. When debts become unmanageable, it can feel like there are no good options. That’s where experienced Denver MCA defense lawyers can provide critical help.

The Risks of Merchant Cash Advances

A common way for small businesses to access quick financing is through merchant cash advances (MCAs). MCAs provide an upfront lump sum of capital in exchange for a percentage of future credit card sales as repayment. While MCAs are easy to qualify for, the costs are extremely high compared to other financing options.Factor rates used by MCA providers work similarly to interest rates on loans. However, with MCAs the factor rate applies to the full advanced amount regardless of how quickly you repay. Even if paid off in one month, you still owe the full factored sum. When translated into APR for comparison, a typical MCA will have rates exceeding 60% or more.In addition to sky-high rates, MCA contracts require daily or weekly repayments taken directly from credit card sales. This reduces working capital available to operate the business, creating cash flow issues for companies with tight margins. It also makes it very difficult to break the repayment cycle once started.

Areas they can provide legal assistance with MCA agreements include:

  • Settlement Negotiations – The attorneys have successfully negotiated hundreds of fair settlements with MCA providers on behalf of clients. This allows businesses to settle debts at a fraction of the owed amount.
  • Litigation – If settlement talks fail, the firm can file lawsuits against MCA lenders. They have an impressive track record prevailing in court against major industry players.
  • Structuring Payment Plans – The legal team works to structure repayment plans that free up working capital for clients to maintain operations. This avoids business shutdowns.
  • Defending Against UCC Liens – MCA lenders will often try placing liens to force repayment. The lawyers defend against improper liens to protect client assets.
  • Stopping Harassing Collections – Unscrupulous MCA collectors frequently harass small business owners struggling to repay debts. The firm sends cease and desist notices to halt harassment.

Common Legal Defenses Against Predatory MCAs

Denver MCA defense lawyers utilize a variety of legal arguments and defenses to protect merchant clients from predatory lending practices. Some of the most effective defenses include:

Unconscionability

  • MCA agreements with exorbitant rates/fees may be viewed as unjust and unenforceable by courts under unconscionability defenses. This can invalidate the contract.

Usury Violations

  • Interest rates above legal limits in states are considered usurious. Usury defenses can reduce owed amounts substantially or void the agreement.

Deceptive Trade Practices

  • Misrepresenting terms, not properly disclosing fees, or other deceptive acts violate trade practice laws. This may void the MCA contract.

Breach of Covenant of Good Faith

  • All contracts include an implied covenant of good faith requiring fair dealings. Bad faith actions like unreasonable fee stacking breach this covenant.

Leveraging these arguments requires thorough analysis of MCA agreements and complex contract law. It’s vital to have an experienced legal team in your corner.

Delancey Street – An Alternative to Hiring MCA Defense Lawyers

While MCA defense lawyers provide critical legal help, their services can be expensive. An alternative option for small business owners struggling with overwhelming debts is working with a dedicated debt relief company like Delancey Street.Delancey Street‘s team of financial experts and attorneys work on your behalf to negotiate settlements of business debts. Through extensive experience dealing with all types of business creditors, including MCA providers, they are able to settle debts for as little as 10-50% of balances owed.

See also  10 Questions to Ask Business Debt Settlement Companies

The Delancey Street debt relief process includes:

  • Free Consultation – They conduct an in-depth review of your finances to gain clarity on all debts owed. This allows them to provide settlement advice tailored to your specific situation.
  • Client Agreement – After settling on a strategy, they formally define services terms in a client agreement detailing the process, expectations, and fees involved.
  • Cease & Desist Notices – Delancey Street sends notices to creditors and collectors demanding they stop harassment and attempts to collect while finding a resolution.
  • Negotiations – Their team leverages their expertise to negotiate directly with creditors and MCA providers. The goal is settling debts at a steep discount.
  • New Payment Terms – They structure new, affordable payment plans with creditors allowing businesses to pay off reduced balances over time without accruing interest.
  • Ongoing Support – Even after settlements are reached, Delancey Street provides support responding to creditor inquiries and ensuring new agreements are fulfilled.

The Delancey Street approach allows small businesses to resolve unmanageable debts out of court quickly and cost effectively. This frees up capital to reinvest in growth rather than paying legal fees.

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