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Fort Wayne MCA Defense Lawyers Provide Expert Business Debt Relief
Getting behind on business debt payments can feel overwhelming for companies and business owners. From merchant cash advances (MCAs) to loans and credit cards, multiple debts with high interest rates put extreme financial strain on a business. Fortunately, the defense lawyers at Delancey Street have extensive experience helping companies in Fort Wayne, Indiana negotiate settlements, restructure terms, defend against lawsuits, and develop strategies to get out from crippling business debt.
The Heavy Weight of Mounting Business Debt
Seeing those credit card bills and collection notices pile up in your inbox every day feels like a punch in the gut. You dread answering the phone because it always seems to be another creditor demanding money you don’t have. The nonstop pressure gives you headaches and makes it hard to sleep at night.You started this business with such optimism and passion, never imagining things would turn so difficult. How did all this debt creep up on you? The economy took a turn, your best employees moved on, and legal issues kept piling expenses on top of the daily costs of running a company. You thought taking out that big merchant cash advance or credit line would keep things afloat for awhile, but now the crushing interest payments take up any extra cash you scrape together.
The Vicious Debt Cycle Drags the Business Down
Making the minimum payments on all the business debts eats up so much money that there’s barely anything left to operate the company. You have to keep taking out new loans at outrageous interest rates just to cover payroll and keep the lights on. You’re trapped in a vicious cycle where the debt piles up faster than revenue comes in.You can’t even think clearly anymore with the constant stress. Customer complaints are increasing while service declines. Key employees jump ship. Your own health suffers from lack of sleep and mounting anxiety. This downward spiral has to stop before the business fails completely.
Business Debt Relief Lawyers Lend a Helping Hand
Fortunately, the knowledgeable MCA defense lawyers at Delancey Street specialize in getting companies out from under crushing business debt. Their legal team can negotiate with your creditors, restructure loan terms in your favor, craft settlements that reduce what you owe, defend against lawsuits, and develop smart long-term strategies so you can stop drowning in interest payments and get your business back on track.
Specific Solutions Tailored to Your Situation
The lawyers at Delancey Street don’t take a one-size-fits-all approach. They conduct an in-depth analysis of your company’s finances to fully understand cash flow, assets, revenue streams, debts owed, interest rates and other key factors. This allows them to offer business debt relief solutions tailored to your specific situation.For example, they may be able to negotiate with merchant cash advance providers to reduce the amount owed. Often these funders purchased your MCA at deep discounts, so the lawyers can frequently work out settlements for 20 to 50 percent less than the full balance. That can save you hundreds of thousands of dollars.With unsecured debts like credit cards, the lawyers can often negotiate for much lower lump-sum settlements. And they work with your secured lenders to restructure payment programs that free up cash flow.
Defending Against Lawsuits
When creditors and collection agencies turn to lawsuits, the knowledgeable lawyers at Delancey Street defend company owners and put a halt to the legal threats. They fight flawed court filings, counter sue for damages when appropriate, and force plaintiffs to substantiate claims. Often this hard-nosed approach leads to much more favorable settlements compared to the initial demands.
Smart Long-Term Strategies
While providing immediate debt relief is crucial, the ultimate goal is setting up sustainable systems so you can operate your business profitably. The lawyers and financial experts at Delancey Street make this a key component of their services.For example, they can help you implement lean operations, reduce overhead, renegotiate lease terms, outsource certain functions, and take other strategic steps to structurally lower costs. They also provide access to ethical sources of growth funding as needed at reasonable rates.Ongoing advisory services ensure you don’t accumulate unhealthy debt levels again. It’s a customized blueprint to run your company efficiently and profitably so you can stop worrying about creditors and get back to growing your business.
Unraveling the Web of MCA Obligations
Merchant cash advances provide a convenient source of funding for companies facing cash flow crunches. But they come at very high long-term costs if the balance due isn’t repaid quickly. Unwinding all the complex legal and financial obligations in these contracts takes specialized legal expertise.
How Merchant Cash Advances Work
With an MCA, a funding company provides a lump sum payment to a business in exchange for a percentage of future credit card sales and/or account receivables. There’s no set total repayment amount – the funder collects daily payments until they recover their investment plus fees and interest.Rates typically equate to 50-200% APR when all the fees are calculated. And the contracts usually have no fixed end date, so the payments continue indefinitely until the full balance is repaid. This open-ended nature means you can end up paying exorbitant multiples of the original funding amount.
Aggressive Collections and Legal Tactics
When cash flow slows and businesses can’t maintain the high daily payments, many MCA funders use aggressive collections tactics like harassing phone calls and lawsuits. Some misrepresent the contracts as loans and seek judgments for the full original funding amounts plus ridiculous penalties – even though the business already paid them back the amount loaned.
Complex Legal Protections Under MCA Contracts
The MCA agreements include many complex provisions that favor the funders. For business owners struggling to make the payments, unraveling all the legal intricacies of the contracts is virtually impossible without specialized legal help.In particular, the lawyers at Delancey Street can often prove the following key violations to invalidate certain contract clauses or even overturn the entire MCA agreement:
- Deceptive or illegal interest rates – In analyzing the fees structures and actual annualized loan rates, usury ceiling violations are common. This makes the contract null and void.
- Overreaching security interests – The lawyers pore through the documentation to identify violations of state laws regarding collateral for secured loans. This can eliminate liens the funders try to place on company assets.
- Unconscionable conduct – Under legal doctrines protecting against unfair business practices, the lawyers can often prove funders engaged in bad faith conduct, failed to properly underwrite before issuing the MCA, hid key loan terms, changed payment parameters without proper notice, and misled the merchant about their rights. This can invalidate the agreement.
- Unjust enrichment – Another legal principle lets courts rescind contracts that unjustly enriched the funder because of inadequate consideration (the amount they initially provided). Given the exorbitant multiples of the original MCA amount that businesses end up repaying, lawyers can often prove unjust enrichment.
Negotiating Favorable MCA Settlements
The lawyers at Delancey Street are extremely effective negotiators. For struggling business owners, they routinely negotiate merchant cash advance settlements that reduce outstanding balances by 20 to 50 percent. This delivers major financial relief compared to making the full payments.
Settlements Benefit Both Parties
MCA funders purchase portfolios of merchant agreements at deep discounts off the face values – often paying just 4-7 cents per dollar of the balances owed. So they have already made nice profits. And delinquent accounts they can’t collect on at all are total losses.This means funders have strong incentive to accept reasonable settlement offers rather than risk getting zero returns. The lawyers make well-structured offers backed by detailed financial records proving the company’s inability to pay. Seeing their prospects for recovering the full amount are slim, funders usually accept discounted settlements. This lets them lock in a decent ROI and redeploy capital into new contracts.
What Settlement Agreements Include
There are two primary options – lump-sum settlements or periodic payment settlements stretching out 12-24 months. The business provides full transparency into its finances, and typically agrees to the following key conditions:
- No additional funding – To prevent the debt from ballooning again and defaulting on the settlement.
- Payment priority – The funder gets top payment priority ahead of other creditors.
- Collateral – If the business fails to meet the new payment terms, funders have more collateral rights to secure assets.
- Confidentiality – The settlement terms remain private to avoid revealing vulnerabilities to other creditors during negotiations.
- Mutual releases – Upon final payout, the funder terminates all liens and legal claims against the business.
This shields the business from future legal threats and collections harassment. They gain much-needed breathing room to focus on reviving profitable operations.
Defending Against MCA Lawsuits
When amicable settlement talks fail and funders file lawsuits, the knowledgeable lawyers at Delancey Street aggressively defend business owners against monetary judgments and asset seizures. Their thorough understanding of MCA contracts provides many angles to fight back effectively in court.
Outlining Counterclaims
In analyzing the original MCA agreements, lawyers often find violations regarding deceptive interest rates, inadequate fee disclosures, illegal liens on collateral, and unfair contract terms.On clients’ behalf, the lawyers file counterclaims outlining these violations and providing supporting documentation. Judges frequently agree the plaintiffs engaged in predatory and bad faith conduct. This gives the lawyers leverage to negotiate much better settlements or even get cases dismissed.
Forcing Plaintiffs to Prove Their Claims
The Fort Wayne lawyers also capitalize on plaintiffs’ lack of proper documentation to substantiate legal allegations and damages claims.For example, with no fixed repayment amounts in MCA contracts, plaintiffs often assert arbitrary sums owed. But they seldom provide adequate accounting trails showing the total advances paid out and the entire payment history month-by-month.By demanding plaintiffs substantiate their shaky claims with concrete financial records, the lawyers can frequently poke major holes that lead to much lower court judgments.
Other Key Legal Defenses
Some additional arguments the lawyers at Delancey Street wield to defend clients against MCA lawsuits include:
- Improper pleadings – Plaintiffs often fail to follow proper legal protocols regarding notifications, evidence preservation and court filings procedures. Citing these violations can get cases thrown out.
- Faulty assignment history – Plaintiffs sometimes can’t prove they properly acquired the MCA contract through a fully intact sequence of ownership transfers from the original funder. Missing links weaken their standing.
- Unclean hands – If plaintiffs utilized illegal collections tactics or misrepresented repayment histories, this doctrine can overcome otherwise valid claims. Judges may dismiss cases rather than “reward” unethical plaintiffs.
- Excessive penalties – Courts often reduce punitive damages that far outweigh actual losses sustained by plaintiffs. Given how much merchants already repaid on MCAs, multi-million dollar judgments sought often get slashed.
Other Business Debt Relief Options
In addition to negotiating MCA settlements and fending off lawsuits, the Fort Wayne business debt relief lawyers at Delancey Street utilize a variety of other strategies to alleviate debt burdens and stabilize company finances.
Settling Credit Card Balances
With extensive experience negotiating credit card debt, the lawyers routinely settle card balances for 20 to 50 percent less than what’s owed. This requires structuring affordable lump-sum or periodic payment offers backed by financial records that demonstrate inability to pay full amounts. Getting creditors to write off half the debt can save tens of thousands of dollars.
Restructuring & Consolidating Loans
By consolidating multiple loans into a single facility with longer tenure and lower payments, cash flow improves immediately. The lawyers handle all the paperwork and negotiations with lenders to make the process smooth and efficient. This works well for business term loans, SBA loans and commercial real estate financing.
Pursuing Credit Damage Claims
When creditors or funders illegally access business accounts without consent or misreport information to credit bureaus, their violations open them up to lawsuits. The lawyers at Delancey Street file credible legal threats and claims demanding financial damages that more than offset what clients owe. Fearing drawn-out litigation, offenders usually settle on favorable terms.
Shielding Personal Assets
For small business owners who personally guarantee company debt, the lawyers work to structure agreements that clearly separate business assets used as collateral from owners’ personal holdings like houses. This prevents creditors from placing liens on or seizing personal property if the company defaults.
Ongoing Advisory Services
The lawyers don’t just resolve immediate debts and lawsuits. They provide long-term advisory services to ensure clients avoid unhealthy debt levels that could jeopardize the business again. This includes assessing financing options for growth, creating budgets and cash flow projections, reviewing contracts, and monitoring credit. They also connect clients to trustworthy sources of funding as needed.
Summing up the Benefits of Business Debt Relief Lawyers
With extensive experience across all facets of business debt resolution, the team of MCA defense lawyers at Delancey Street provides struggling companies comprehensive solutions and ongoing support including:
- Negotiating discounted lump-sum settlements on MCAs, credit cards and other debts owed
- Restructuring loan payments, interest rates and terms with secured lenders
- Defending against lawsuits and asset seizures while recouping damages from plaintiffs
- Ensuring proper accountings and documentation to validate amounts owed
- Shielding owners’ personal assets from creditors
- Advising on budgets, cash flow and financing options to prevent future debt crises
- Connecting clients to ethical funding sources at reasonable rates
