Unfreeze Bank Account MCA

Your account is frozen. Payroll is due in three days. The funder is sitting on the other end of an email chain with a balance demand. The question is not whether to act; it is which path moves the freeze the fastest and at the lowest cost.

There are essentially two paths, and they are often run in parallel. Choosing the right primary path depends on the strength of the underlying judgment, the cash position of the business, and the funder’s posture.

Path 1: Negotiate a Release

The fastest path is almost always a negotiated release. The funder served the restraint to create leverage; settlement removes the reason for the restraint. The deal typically looks like this:

• Funder agrees to accept a reduced settlement (commonly 30 to 50 percent of the alleged balance for older judgments, 50 to 70 percent for fresher ones).
• Settlement amount is funded into escrow or paid directly to the funder’s counsel.
• Funder simultaneously files a satisfaction of judgment and releases the restraining notice to the bank.
• Bank releases the freeze within one to three business days.

Our senior advisors run this negotiation regularly. The work involves verifying the actual balance, mapping the funder’s posture, presenting the settlement offer with documentation, and managing the closing logistics so the release is simultaneous with payment.

Path 2: Challenge the Judgment

If the underlying judgment is vulnerable, an independent attorney from our referral network can file a motion to vacate. Successful vacatur removes the legal basis for the restraint, the bank releases the freeze, and the underlying litigation reopens on dramatically better footing for the merchant.

Common vacatur grounds include defective service of process, lack of personal jurisdiction, improper venue, and excusable default coupled with a meritorious defense. New York’s CPLR § 5015 codifies the standard vacatur grounds; most states follow a similar framework.

Vacatur is slower than settlement. The motion takes days to draft, the funder gets time to respond, the court schedules a hearing. Realistic timeline is two to six weeks. But when the judgment is genuinely vulnerable, the post-vacatur negotiation produces far better settlements, or in some cases dismissal of the entire claim.

Path 3: Source Exemptions

State law often exempts certain categories of funds from restraint. Wages of the proprietor, certain government benefit deposits, and trust funds for employees may be exempt under state exemption statutes.

An independent attorney can review the deposits in the restrained account and, where exemptions apply, move to release the exempt portion even if the rest of the restraint stands. This rarely solves the whole problem but can free up enough cash to cover payroll while the larger resolution proceeds.

What You Need to Get Ready

Before any of these paths move efficiently, gather the documentation:

• The court docket and full engagement file from the underlying lawsuit.
• The original MCA agreement.
• Bank statements showing what was deducted by the funder over the life of the advance.
• The restraining notice and any communication from your bank about the restraint.
• Records establishing your business operating address and where you were served (or not served) with the original summons.

Time to Resolution by Path

Realistic timelines, from our experience running these matters: negotiated settlement and release takes 3 to 10 business days from start of negotiation. Uncontested vacatur runs 3 to 6 weeks. Contested vacatur runs 6 to 16 weeks. Exemption release for a portion of funds takes 5 to 15 business days.

Most of our clients get the restraint lifted within two weeks through some combination of these paths. The faster timeline almost always involves a negotiated settlement, with the vacatur threat as the leverage that improves the settlement number.

What Happens After the Release

Once the freeze is off, the work is not done. The underlying obligation, the UCC filing, any related judgments, and the funder relationship all need to be wound down or restructured. Our senior advisors map the full restructuring across all funders in your stack so you do not solve one freeze just to face another in 60 days. The legal track, vacatur motions, satisfaction-of-judgment filings, UCC-3 terminations, runs through independent counsel from our network.

Delancey Street is a business debt-relief company, not a law firm. When a matter requires legal work, we refer you to an independent attorney from our referral network; the attorney–client relationship is between you and that attorney.

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