Dealing with Merchant Cash Advance Issues in Wyoming

Merchant cash advances have exploded in popularity in recent years as a fast financing option for small businesses in Wyoming. But some merchant cash advance companies take advantage of business owners through absurdly high fees and shady practices. If you’re facing legal issues over a merchant cash advance agreement gone bad, here’s what you need to know.

How Do Merchant Cash Advances Work in Wyoming?

Merchant cash advance companies provide businesses with a lump sum of cash upfront in exchange for a cut of future credit card and debit card sales. You pay back the advance through daily or weekly payments until the total amount plus fees and interest is repaid.

Unlike a traditional small business loan, merchant cash advances aren’t classified as loans under Wyoming law. This allows some merchant cash advance companies to sidestep consumer protection laws regarding lending practices.

While merchant cash advances give businesses fast access to capital, the costs are often exorbitant. Interest rates frequently exceed 60% when all the fees are factored in. And if your business has a few slow weeks and can’t make the payments, your balance due can spiral out of control incredibly fast.

Common Merchant Cash Advance Problems in Wyoming

Many Wyoming business owners end up facing lawsuits and harassment from merchant cash advance companies. Here are some of the most common issues that arise:

• Outrageous interest rates and fees
• Aggressive collection tactics
• Lawsuits and even threats of criminal charges
• Harassing you, your staff, and even your customers
• Attempting to freeze your bank accounts or garnish wages
• Accusations of fraud against you

Most disturbing is that some merchant cash advance companies pursue false or inflated claims against business owners. Others break laws like usury rate caps.

Wyoming Laws Related to Lending and Merchant Cash Advances

There are a few Wyoming laws that apply to merchant cash advances and lending practices:

• Wyoming Statute §40-14-140(a)(iii) – Sets maximum interest rates and usury limits.
• Wyoming Statute §40-14-642 – Prohibits unfair and deceptive trade practices.
• Federal Truth in Lending Act – Requires disclosure of loan terms and costs.

Although merchant cash advance companies claim they aren’t lenders, Wyoming courts have sometimes found their practices constitute illegal lending. An experienced merchant cash advance attorney can help determine if a company violated Wyoming’s laws.

Defenses Against Abusive Merchant Cash Advances

If you’re facing a lawsuit from a merchant cash advance company, here are some potential defenses a skilled lawyer may use:

• The interest rates and fees exceed Wyoming’s usury limits
• The company engaged in illegal or deceptive practices
• The contract contains unfair terms that should make it void
• The company failed to make required disclosures
• The company wrongly tried to garnish protected accounts

In some cases, violations open the merchant cash advance company up to liability. Your attorney could potentially file a counterclaim or separate lawsuit against them.

Negotiating a Settlement for Relief

Instead of a long court battle, your lawyer may be able to negotiate a settlement for relief from the debt. This involves using your legal claims as leverage at the negotiating table. For example, your lawyer may be able to negotiate:

• A lower payoff amount
• Reduced monthly payments
• Lower interest rates and fees
• Waiving late fees and penalties
• A longer repayment term

Settling avoids litigation risk and offers immediate financial relief.

Using Bankruptcy to Eliminate Merchant Cash Advance Debt

For small business owners facing severe financial challenges, bankruptcy may be an option to discharge crushing merchant cash advance debt. Chapter 7 or Chapter 11 bankruptcy stops collections and can eliminate or restructure business debts.

Of course, bankruptcy also damages your business’s credit and reputation. An attorney well-versed in both merchant cash advances and bankruptcy law can provide guidance on the best path forward for your situation.

Finding the Right Attorney for Your Case

If you’re overwhelmed by merchant cash advance debt, it’s critical to find an attorney experienced in these types of cases. Warning signs of an attorney to avoid include:

• No experience with merchant cash advance cases
• Can’t explain potential strategies and defenses
• Pushes you to settle right away
• Makes unrealistic promises

Don’t go it alone against predatory merchant cash advance companies. The right attorney levels the playing field and fights to protect your rights under Wyoming law. There are ways out of the debt spiral – you just need experienced legal guidance. Relief starts with a simple conversation about your situation.