Welcome to Delancey Street. We are a nationwide business debt settlement company based out of New York City. We work with a network of attorneys nationwide, including New York City and New York State, to help people who are struggling with MCA debt.
If you are searching up for a New York MCA debt relief lawyer, it’s likely something is already going wrong. The daily debits have taken more of your deposit than the business can spare, or maybe a judgment already hit your bank account. You think that you need a debt relief lawyer in New York. Thankfully, you’ve landed on Delancey Street, a New York business debt settlement company that specializes in merchant cash advance debt.
We are not your lawyer, and this is not legal advice, but we negotiate with these funders constantly, and we can tell you what actually moves a number when it comes to a settlement offer or getting a restructuring done.
Three different jobs an MCA debt relief lawyer covers
What does the phrase MCA debt relief lawyer actually cover? First and foremost, it covers three different jobs.
- The first being litigation defense, answering a complaint, vacating a judgment, fighting a bank restraint, handling a personal guarantee.
- Second, negotiation, such as restructuring or settling balances with funders.
- Third, and often an understated component of their job, which is regulatory pressure, building usury, disclosure, or unfair practice arguments to change the funder’s math.
Those are all different skills, and depending on where your business is, not all of them are necessary. A litigator who has never negotiated a payoff can get you a correct legal answer, but also a bad business outcome. A negotiator with no litigation backstop loses leverage the day a lender files a lawsuit. It’s important that you understand which of the three you actually need and which of the three the firm actually does.
True purchase of receivables or a disguised loan
The whole fight really comes down to one question. Almost every New York State MCA dispute turns on whether the deal is a true purchase of receivables or a disguised loan. That decides whether the usury laws apply at all.
New York State’s laws have set a working framework through the LG Funding versus United Senior Properties of Olof case. Courts have asked whether the agreement has a real reconciliation clause, whether it has a finite term, and whether the funder has any recourse if you, the business owner, go bankrupt. But having said that, this is guidance, not a checklist. But the principle is simple: a loan exists when repayment is absolute. A purchase exists when the funder carries a real risk of never being paid.
Why the reconciliation language matters
If you took an MCA, then what you allegedly took was a purchase of your future receivables, not a loan. And that’s why the reconciliation language matters. If the funder may adjust payments at its sole discretion, a court can read that as no adjustment right at all. If bankruptcy triggers default and accelerates the balance, the funder has protected itself from the risk it claimed to have taken.
New York’s usury caps
Now, what happens if a court characterizes the deal as a loan? Well, then New York’s usury caps apply. Civil usury sits at 16%, whereas criminal usury sits at 25%. Corporations generally cannot raise civil usury, but New York courts have allowed them to assert criminal usury. That’s a leverage point because a criminally usurious loan can be unenforceable, not just reduced. If you’ve done the math, typical factor rates annualized over a short term are easily over 100% APR. What a litigator, such as a New York defense, MCA defense lawyer, may do is fight to get it recharacterized, not just fight about the math.
The Richmond Capital judgment
One case that might be important to you is the Richmond Capital judgment and what it does and does not do. The New York Attorney General sued Richmond Capital Group, RAM Capital Funding, Viceroy Capital Funding, and their principals over thousands of advances. Courts treated them as just usurious loans in disguise. The announced judgment exceeded over $70 million, and the first department affirmed the core findings.
But here’s the honest read: that case had a huge record and a state agency behind it. It does not mean, though, that every funder’s paperwork will fail. It does give you authority that a New York court will look past the label and it will see if the MCA you took was a loan or actually an advance of future receivables.
The Fair Business Practices Act
Another factor to consider is the Fair Business Practices Act. The New York State Governor signed the Fair Business Practices Act in 2025, and it rewrote General Business Law 349, adding unfair and abusive acts to the existing ban on deceptive acts, and it dropped the consumer-oriented requirement and expressly focused on harm to small businesses and nonprofits.
Now let’s skip the headlines. Only the Attorney General can enforce the unfair and abusive prohibitions. The private right of action under Section 349 is still limited to deceptive acts, so you should be very skeptical if someone says the Act will save your company and the Act will allow you to sue a funder for being abusive. A funder only faces a credible threat if the attorney general has been referred the case.
Confession of judgments and UCC liens
Another thing to consider, if you’re looking for a New York MCA defense lawyer, is the confession of judgments and UCC liens. Now, confession of judgments after 2019 that are signed by non-New York residents are no longer enforceable here, and the confessions must name the county where the defendant resides. That killed the old practice of filing thousands of confessions in a few New York counties against businesses all over the United States. Older judgments still sit on records and have to be attacked directly.
Most funders now use New York forum clauses and expedited procedures which skip normal discovery. What that really means is that if you are served, the calendar is very short and you have to move quickly. The worst thing you can do is not respond to a lawsuit. Typically speaking, you have 20 to 30 days to respond to a lawsuit and protect yourself.
UCC liens
Then there are UCC liens. Funders typically file financing statements and sometimes will tell your processor or customers to send receivables to them if you’ve defaulted on an MCA contract. Check when your agreement allows that. Many only allow it after a defined default. Typically notice is sent earlier when you’ve breached the agreement, and you’ll know that the MCA lender is about to start reaching out to your clients in order to divert receivables to themselves. This can cost you customers and create reputational liability.
Disclosure laws are not a magic wand
When contemplating what to do next, realize that disclosure laws are useful and all of the other court cases we mentioned above are very useful, but they are not a magic wand. While there is a supervisory regime in place, that does not mean that your balance is erased. There is value in these court cases, and a missing or wrong APR disclosure is a fact you can use in negotiation, but by no means is it going to help you resolve the debt you’ve taken on in any definitive way.
When lawyers are the right answer
Lawyers are the right answer when you have been sued, restrained, or hit with a judgment, but these are an expensive answer when you are still current and just can’t carry the payment.
Your own contract is the first tool
Pre-default, your own contract is the first tool. The reconciliation clause exists because the funders need it to argue that the deal is a purchase. But if you’ve tried invoking the reconciliation clause many times and have documented it with bank records and credit card processor statements, and the lenders have simply refused, then this is the first step.
At Delancey Street, we often recommend that what you should do is first make it so that you reached out to lenders through the reconciliation clause and documented it thoroughly. One phone call is not enough. You must send numerous emails with the full financial statements, send it through normal mail, email, whatever you must do. Try to establish a point of contact and try to get a firm rejection from them, despite overwhelming evidence that you do in fact qualify for reconciliation.
If the lenders refuse, then that weakens their argument and in that reality, practically speaking, puts them in legal default of the contract that they signed. It weakens their argument that you are in default. That is the idea behind our reconciliation shield program.
Stopping payments and default remedies
If you are already behind, weigh the tradeoff before anyone tells you to stop paying. Stopping payments will trigger default remedies like UCC action, personal guarantee claims, and lawsuits. Sometimes it is still the better path because a funder collecting in full has no reason to negotiate. But make a decision with a plan, not a reflex.
Don’t stack another advance
Most importantly, don’t stack another advance to make things worse. Often many brokers will ask you to take a consolidation MCA, stressing that it’ll improve your cash flow. In reality, you’re just taking one more blanket MCA to pay off the others, but with a shorter term and a more expensive factor rate.
MCA lenders do not prefer litigation
MCA lenders do not prefer litigation. It increases their risk as well because now they’re paying for lawyer fees, and in addition, it puts a question mark on when they’ll actually receive their capital back. MCA lenders are not in the business of sitting on debt for long periods of time. MCA lenders make money by constantly deploying capital and finding new borrowers. It is not improbable to have an MCA lender settle for less today because they know they can redistribute that capital to other MCAs that they are funding at 100 to 200 APR.
The choice to hire a lawyer or a debt settlement company
The choice to hire a lawyer or a debt settlement company is one that you have to take seriously. Don’t reflexively think that a lawyer is who you need. Often many attorneys are general practitioners or have no business debt settlement experience. Most have not spoken to an MCA lender at all and have no rapport with them or a point of contact.
If you’re considering hiring an MCA defense lawyer, we highly recommend you speak to a company like Delancey Street, who can help you understand where in the cycle you are and whether a lawyer is needed at this point or if there are pre-litigation remedies available to you to help settle this debt amicably.
At Delancey Street, we have worked with almost every lender in the industry and have immense experience handling all aspects of a situation with an MCA lender. Schedule a risk-free consultation today with us.
