San Jose Merchant Cash Advance Lawyers Can Help With Business Debt Relief
Running a small business is tough, especially when it comes to managing cash flow and expenses. That’s why many business owners turn to merchant cash advances (MCAs) to get quick capital injections. But MCA loans come with major downsides – extremely high interest rates and aggressive collection tactics if you fall behind.If you’re struggling with business debt from an MCA loan in the San Jose area, working with an experienced merchant cash advance lawyer can help protect your interests. Keep reading to learn more about how attorneys assist with MCA issues and provide broader business debt relief services.
How Merchant Cash Advances Work
Merchant cash advances provide businesses with lump sum payments in exchange for a percentage of future credit card sales. The business then repays the advance through daily or weekly debits from their credit card receipts.Unlike small business loans, MCAs don’t have fixed monthly payments. The amount due fluctuates based on sales volume. This flexible structure helps businesses through temporary slow periods. However, it also means you repay much more than the original advance when all is said and done.In addition to paying back the full advance amount, businesses pay fees and interest equivalent to 60-300% APR – similar to payday loan rates. And if your revenue dips too low to cover the payments, the snowballing interest will bury your business fast.
-Falling Behind on Payments Brings Big Risks
While MCA loans provide quick access to capital, they also come with major downsides if your business struggles to repay them:
- Aggressive collections – MCA lenders will harass you with constant calls and threats of legal action. This added stress compounds cash flow problems.
- Lawsuits and judgments – If you default, the lender can sue your business and easily win a judgement to seize assets.
- Wage garnishment – If you personally guaranteed the MCA, the lender can garnish your wages after getting a judgment.
- Bank levies – Lenders use bank levies to freeze and seize funds from your business bank accounts.
- Confessions of judgement – The MCA contract may contain a confession of judgement clause, allowing lenders to shortcut the legal process if you default.
Facing legal action from an MCA lender can spiral your business into bankruptcy. The next section explores how a lawyer can help.
How San Jose Merchant Cash Advance Lawyers Can Help
If you’re struggling with MCA debt, partnering with an experienced business debt relief lawyer can make all the difference. Attorneys have the legal knowledge and negotiating skills to defend your interests. Key ways they assist include:
Negotiating Settlements
The number one goal is to settle your outstanding MCA balance for less than you currently owe. An attorney negotiates with the lender, often getting lawsuits dropped contingent on a settlement. This protects your assets and stops the snowballing interest payments.
-Defending Against Lawsuits
If the MCA lender sues your business for nonpayment, the attorney handles the court defense. They fight back against unfair default judgments and confessions of judgement. The lawyer also countersues if the lender violates debt collection laws.
Restructuring Payments
If you can’t afford the current repayment schedule but want to avoid default, the lawyer tries negotiating altered payment terms – for example, fixed monthly payments at a lower percentage of sales.
Asserting Your Rights
Experienced debt relief lawyers identify potential violations of state and federal debt collection laws. If the MCA contract contains illegal provisions or the lender uses unlawful tactics, your rights provide leverage to negotiate a favorable settlement.
Improving Cash Flow
Beyond debt settlement, the attorney provides overall business advice to improve cash flow management so you can build reserves and get out of MCA debt for good.
Beware MCA Consolidation Offers
When struggling with MCA debt, you may get offers to “consolidate” what you owe into a single loan product. Use extreme caution with these!The new loan often comes from an affiliate of your original MCA lender. They bait you with promises of lower daily payments, but charge big fees upfront and keep you trapped paying interest for longer.An attorney can advise if consolidation makes sense or further locks you into unaffordable debt payments. In most cases, consolidation provides minimal relief while costing much more overall.
-How Business Debt Relief Lawyers Assist with Other Debts
While merchant cash advances carry particular risks, attorneys also provide more general services to help businesses resolve broader debt problems, such as:
- Negotiating payment plans or discounted lump sum settlements of business credit card balances
- Working out new repayment terms for delinquent SBA loans
- Renegotiating business equipment leases when payments become unaffordable
- Settling commercial real estate loan deficiencies after foreclosure
- Creating affordable payment plans for unpaid payroll taxes
- Guiding business owners through personal Chapter 7 or Chapter 13 bankruptcy if necessary
Reputable business debt relief law firms have experience across this wide spectrum of creditor debt issues. They offer knowledgeable guidance tailored to your unique situation.
What to Look for in a Business Debt Relief Attorney
If you decide legal help is needed for your San Jose business to resolve merchant cash advance or other debts, make sure to choose an attorney with relevant experience, such as:
-- MCA lawsuit defense – They must have represented other businesses sued by MCA lenders and understand confession of judgement risks.
- Debt settlement skills – Their negotiation track record is critical – ask about typical settlement discounts they secure.
- Debt collection law expertise – They need mastery of state and federal consumer protection statutes to assert your rights.
- Bankruptcy knowledge – Even if bankruptcy isn’t the right fit, they should understand pros/cons to advise properly.
- Business cash flow analysis – Can they diagnose broader challenges and provide guidance beyond just debt relief?
Also verify what legal fee structures they offer. Most business debt relief attorneys work on a contingency fee basis. This means the lawyer only collects their fee as a percentage of debt savings they negotiate for you.So if they don’t succeed in reducing what you owe, you pay nothing extra for their services. This gives them incentive to get the maximum settlement.
Get Legal Support to Protect Your San Jose Business
Merchant cash advances promise convenient capital for small businesses, but also carry big risks if your sales revenues decline. Thousands of dollars in quick financing can turn into a mountain of debt with 300% interest rates and aggressive collections tactics.If you face legal threats from an MCA lender or struggle to make daily repayment debits, partnering with an experienced San Jose merchant cash advance lawyer can help safeguard your business assets. Attorneys adept at debt settlement negotiations work to:
- Reduce or eliminate what you owe to resolve outstanding balances
- Halt harassment from collectors
- Defend against lawsuits and judgments
- Recover seized assets or garnished wages
Beyond defending against merchant cash advance issues, business debt relief lawyers also provide guidance with other creditor debts that strain cash flow – from credit cards and equipment leases to commercial real estate loans.Don’t wait until missing payments snowball into a dire situation. Consult an attorney experienced with MCA loans and small business debts for advice and legal support. Protecting your hard-earned business is well worth the investment.