Illinois Merchant Cash Advance Attorney
Merchant cash advances have become very popular in Illinois as a way for small businesses to quickly access capital. However, many businesses have found themselves struggling with these high-cost loans. If you have concerns about your merchant cash advance agreement in Illinois, it’s important to understand your rights and options. Consulting with an experienced Illinois merchant cash advance attorney can help.
How Merchant Cash Advances Work in Illinois
With a merchant cash advance (MCA), a financing company provides a business with an upfront sum of money in exchange for a percentage of the business’s future credit card sales. There is no set repayment schedule – the business repays the advance as credit card sales come in.This flexibility can be appealing, but it also means the total repayment amount is variable and can end up being much higher than expected. Some common problems in Illinois include:
- Excessively high interest rates – some MCAs charge over 100% APR
- Misleading statements about total costs
- Aggressive collection tactics if the business falls behind
Many Illinois business owners who get an MCA end up paying back 2-3 times what they received. And if sales drop, repayment can become unsustainable.
Protections Under Illinois Law
Illinois has laws, like usury caps, that limit what lenders can charge for financing. However, MCA companies exploit loopholes claiming the cash advance is not actually a loan. This leaves Illinois business owners vulnerable as MCAs often:
- Charge rates exceeding Illinois’ civil usury cap
- Include unfair contract terms
- Use overly aggressive collection practices
So even though an MCA may be unlawful, companies rely on lack of regulation and borrower intimidation to continue collecting.
How an Illinois MCA Attorney Can Help
If you are struggling to repay a merchant cash advance in Illinois, contacting an attorney experienced with MCAs is critical. Here are some ways a knowledgeable lawyer can help:
- Review the MCA agreement – Analyze all terms, fees, rates and representations for violations of Illinois law.
- Negotiate with the MCA company – Work towards a settlement or payment plan on your behalf. Having legal counsel shows the MCA provider you are serious.
- Defend against lawsuits – Assert defenses and counterclaims if the MCA company files suit against your business.
- Invalidate the MCA contract – If unlawful terms are found, argue the agreement is void and unenforceable.
- Reduce the amount owed – Utilize various legal arguments to lower the balance. For example, disputing excessive fees or improper withdrawals.
- Explore bankruptcy options – Filing Chapter 7 or 13 may discharge part or all of the debt.
The right attorney levels the playing field against unscrupulous MCA companies operating in Illinois. They know where providers cross legal lines and how to challenge them on your behalf.
Finding the Right Illinois MCA Attorney
It’s important to choose an attorney with specific experience handling Illinois merchant cash advances. Here are some questions to ask during your search:
- How many years have you handled MCA cases in Illinois?
- What strategies have you used to successfully challenge MCA companies in IL?
- Are you familiar with Illinois laws and regulations regarding MCAs?
- Can you provide references from past Illinois MCA clients?
- Will you review my agreement for violations at no cost?
Also verify the attorney is licensed in Illinois and that no disciplinary issues are on record. Schedule consultations with a few lawyers to find one you are comfortable with.Act quickly if you have received threats of legal action on a merchant cash advance in Illinois. An experienced attorney can negotiate with the MCA provider before things escalate to litigation. They understand the tactics used in Illinois and how to counter them. With the right legal help, you can resolve your MCA debt on fair terms.
Negotiating MCA Settlements in Illinois
Your attorney will first try to negotiate a settlement or payment plan with the MCA company. Typical negotiation strategies in Illinois include:
- Proposing a lump sum payment for less than the full balance
- Offering a reduced payoff amount as full satisfaction of the debt
- Asking for lower daily repayment rates based on current sales
- Trying to convert the MCA to fixed monthly payments
The MCA provider has incentive to settle rather than face potential legal action. An experienced attorney knows how to negotiate effectively on your behalf. Many Illinois MCA cases settle through these negotiations.
Defending Against Illinois MCA Lawsuits
If unable to reach a settlement, your lawyer can defend against any lawsuit filed. Possible defenses under Illinois law include:
- The MCA contract violates Illinois lending or consumer protection laws
- The rates, fees or repayment terms are unlawful
- Non-disclosure or misrepresentation of key terms
- Unconscionability – the contract is unfair and one-sided
The attorney will craft the strongest defense based on issues uncovered during their contract review. The goal is to invalidate the agreement or have the case dismissed. This stops collections and eliminates the debt obligation.
Discharging MCA Debt Through Bankruptcy
For business owners with multiple debts beyond just a merchant cash advance, bankruptcy may be an option. Filing Chapter 7 or Chapter 13 can discharge part or all of the MCA debt. An attorney experienced in both MCAs and bankruptcy law can advise if this path makes sense.
Don’t Delay – Consult an Illinois MCA Attorney
If you are struggling to repay a merchant cash advance in Illinois, meet with a qualified attorney as soon as possible. They can negotiate with the MCA provider before your situation deteriorates. An experienced Illinois MCA lawyer will fight to protect your business and rights under Illinois law.