San Diego Merchant Cash Advance Legal Help – Attorneys Provide Debt Settlement
Merchant cash advances (MCAs) can seem like an easy way for small businesses to get quick cash, but they often come with predatory terms and aggressive collection tactics when borrowers fall behind on payments. If your San Diego business took out an MCA and is now facing legal threats, don’t panic – experienced attorneys can help protect your assets and negotiate settlements.
How San Diego MCA Lenders Operate
Merchant cash advance companies aren’t technically lenders. Instead of issuing loans, they “purchase” a percentage of your future credit card sales through a process called factoring. You get a lump sum upfront, but have to pay it back at sky-high interest rates often exceeding 100% APR.The transaction masquerades as a purchase instead of a loan to avoid California lending laws. This loophole leaves borrowers vulnerable when lenders engage in unethical behavior like:
-- Misrepresenting terms to trick business owners
- Charging excessive interest rates
- Aggressive collection tactics like harassing calls
- Freezing bank accounts to seize repayments
While possibly legal, these practices are despised by courts and regulators. Experienced attorneys leverage violations to defend borrowers.
What Happens When You Default on an MCA
If you miss merchant cash advance payments, lenders often sue for breach of contract and demand immediate repayment of the remaining balance. Many MCA agreements contain “confessions of judgment” allowing lenders to obtain default judgements without even notifying borrowers.Lenders can then legally seize assets, freeze bank accounts, or force you to close up shop. They may also damage relationships by contacting vendors and customers about debts.In short – defaulting on an MCA can quickly spiral out of control if you don’t have experienced legal counsel on your side. Don’t wait until it’s too late.
San Diego MCA Defense Attorneys Can Help
The good news? San Diego has no shortage of qualified attorneys ready to protect your interests against predatory MCA tactics. They leverage several key defenses:Unconscionability ClaimsIf an agreement contains unfair, deceptive, or outrageous terms, courts may rule it “unconscionable” and invalidate sections – or the entire contract. Attorneys highlight unbalanced terms in MCA deals like interest rates exceeding 100% APR.Usury Law ViolationsAlthough MCAs claim to be cash advances and not loans, courts increasingly rule they are in fact loans subject to state lending laws. California’s usury law prohibits interest rates over 10% without special licenses that MCA lenders lack. This can nullify interest charges.RICO ViolationsIn multiple landmark federal cases, MCA companies were found guilty of racketeering through systemic contractual fraud and extortionate collection practices. Such racketeering violations open MCA lenders to severe civil and criminal penalties – especially when multiple injured parties file claims.Negotiating Discounted Repayment SettlementsFaced with potential lawsuits and regulatory sanctions, many MCA lenders will negotiate settlements allowing borrowers to repay less than they owe. Experienced lawyers start settlement talks by highlighting legal exposures – an effective bargaining chip. Settlement discounts of 20% to 50% are common.
Act Now to Protect Your San Diego Business
If an MCA lender threatens your livelihood over missed payments, don’t wait to seek legal help. San Diego attorneys can quickly file court motions to halt collections while leveraging violations to invalidate contracts or negotiate reduced settlements.Don’t let predatory lenders harm your business relationships or seize assets without a fight. Schedule a free consultation with an attorney today before it’s too late. With the right legal strategy, you can settle debts at deep discounts or even walk away from abusive MCA agreements. Fight back and take control of your financial future!
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