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Albuquerque Merchant Cash Advance Lawyers and Business Debt Relief

Merchant cash advances can seem like an easy way for small businesses to get quick cash, but they often come with predatory terms and sky-high interest rates that can sink a business. If you’re an Albuquerque business owner who took out a merchant cash advance and is now facing crushing debt, don’t panic – help is available. There are experienced Albuquerque merchant cash advance lawyers who can help you negotiate a settlement or file for bankruptcy to eliminate or reduce your debts.

How Merchant Cash Advances Work

A merchant cash advance (MCA) isn’t really a loan, it’s the sale of a business’s future credit card receivables at a steep discount. Here’s how it works:An MCA company gives a business, let’s say $100,000 upfront in exchange for the rights to collect a percentage of the business’s credit card sales – usually 10-20% – until the MCA company has recouped the $100,000 plus a very high fee or interest rate. This can take years and end up costing the business 2-3 times the original advance amount.Unlike a term loan, there’s no set monthly payment or maturity date. The longer it takes for the MCA company to get repaid, the more the business pays in fees and interest. Merchant cash advances can have annual percentage rates of 60-350% – much higher than even most credit cards!

The Trouble With Merchant Cash Advances

Merchant cash advances appeal to small businesses because they’re quick and easy to get. Unlike bank loans, there’s little paperwork or qualifications beyond having a certain amount of monthly credit card sales, usually $5,000 or more.Because MCAs aren’t technically loans, lenders aren’t required to check a business’s credit or make sure the business can afford the payments. This has led many small businesses to get in over their heads without realizing how crushing the debt will become.Here are some common issues Albuquerque businesses run into with merchant cash advances:

  • Deceptively easy applications – Lenders downplay costs and make MCAs sound like easy money, when the reality is much different.
  • Predatory terms – Extremely high interest rates and fees that balloon over time. Some MCA contracts don’t even disclose the annual percentage rate (APR).
  • Daily payments – Instead of monthly payments, MCA companies take a percentage of daily credit card sales. This can drain a struggling business’s cash flow.
  • Aggressive collections – MCA companies can freeze business bank accounts or sue if payments fall behind. Some even contact customers demanding payment.

If your Albuquerque business is facing any of these issues with a merchant cash advance, don’t wait to get help. An experienced merchant cash advance lawyer can review your contract for unlawful terms and represent you in negotiations or legal action against the lender.

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Options For Relief From Merchant Cash Advance Debt

The good news is that all hope isn’t lost if your business is drowning in merchant cash advance debt. Here are a few options an Albuquerque MCA lawyer can help you pursue:

Debt Settlement

If the fees and payments have become unmanageable, an attorney can negotiate a lump sum settlement for less than you owe. This can relieve the pressure of daily payments and high interest dragging out the debt for years. Settlement terms depend on factors like:

  • How long the MCA has been outstanding
  • Total amount owed
  • The business’s current financial state

A good settlement can reduce the debt by 40-60%, allowing the business to pay it off in a few months rather than years.

Chapter 7 or Chapter 11 Bankruptcy

For some overburdened small businesses, bankruptcy may be the most viable path to eliminating MCA debt and getting a fresh start. Chapter 7 bankruptcy fully discharges qualifying business debts, while Chapter 11 bankruptcy allows a business to restructure debts and repay them over 3-5 years.Bankruptcy stops collections activity and can wipe out the entire MCA balance and related fees. However, it also negatively impacts business credit for years. An attorney can advise if bankruptcy makes sense based on the severity of your situation.

Unconscionability Claims

Some merchant cash advance contracts contain unlawful terms that courts deem “unconscionable” – so unfair and one-sided they’re legally void. Common unconscionable MCA terms include:

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  • Excessively high fees or interest rates
  • Confusing language obscuring the true costs
  • Aggressive repayment terms unrelated to the business’s ability to pay

If an attorney can demonstrate your MCA contract contains unconscionable clauses, the court may void the entire agreement or certain provisions. This depends on state laws and the discretion of the judge.

Consult An Experienced Merchant Cash Advance Attorney

The complexity of merchant cash advance contracts and laws governing them make trying to fight an MCA company yourself an uphill battle. An experienced attorney knows how to apply pressure at the right points – whether negotiating a settlement or challenging the agreement’s legality.Here’s how an Albuquerque merchant cash advance lawyer can help:

  • Review the MCA agreement – Identify unlawful terms or violations that could invalidate part or all of the contract.
  • Send demand letters – Formally request the MCA company settle the debt for a lower lump sum or monthly payments.
  • File lawsuits – If negotiations fail, sue for damages related to predatory lending practices or contract disputes.
  • Defend against collections – Assert counterclaims to stop harassment and intimidation tactics against the business.
  • Manage bankruptcy – Coordinate filing and handle all legal aspects of discharging MCA debt.

Don’t keep struggling under the weight of merchant cash advance debt. Get a free case review from an experienced Albuquerque MCA attorney today. With the right legal strategy, you can settle or eliminate your debt and move your business forward again.

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