Utah Merchant Cash Advance Legal Help – Attorneys Provide Debt Settlement
Merchant cash advances (MCAs) can provide quick financing for small businesses, but they also come with risks. If your Utah business took out an MCA and is now facing legal action, you need experienced legal help. This article explains your options for resolving MCA debt lawsuits in Utah.
What is a Merchant Cash Advance?
A merchant cash advance provides a business with a lump sum of capital in exchange for a percentage of future credit card sales. It’s not technically a loan under Utah law. Instead, MCA companies argue it’s more like selling part of your future receivables.But make no mistake – MCAs carry extremely high effective interest rates, often over 100% APR when calculated like a loan. The daily or weekly payments can quickly become unmanageable.
-Utah MCA Lawsuits on the Rise
In recent years, Utah has seen a surge in MCA lawsuits as small business owners struggle to keep up with payments. MCA companies rely heavily on confession of judgment (COJ) clauses that allow them to obtain a judgment without notice.Lenders then aggressively collect by garnishing bank accounts or forcing sales of the business. But experienced attorneys can often get these cases dismissed or dramatically reduced.
4 Defenses Against Utah MCA Lawsuits
If you’re facing an MCA collections lawsuit in Utah, here are some potential defenses to explore with an attorney:
1. Violations of Utah’s Commercial Financing Disclosure Act
In 2023, Utah implemented new regulations around MCA disclosures and registration. Failure to follow these rules can invalidate the agreement or reduce what’s owed. An attorney can review compliance.
2. Unconscionable or Confusing Contract Terms
MCA agreements often contain confusing legalese and terms that unreasonably favor the lender. Courts can rule these provisions unenforceable.
-3. Improper Use of Confession of Judgment
If the MCA company failed to follow proper procedures when obtaining a confession of judgment, the court can throw it out.
4. Inability to Pay
Courts understand that small business owners can experience drastic changes in circumstances. In some cases attorneys can argue that enforcing the full judgment would be unfair.
Work With a Utah MCA Debt Attorney
The most important step is to seek help from an attorney experienced with Utah MCA lawsuits as soon as possible. They can review your case for potential violations and build a defense strategy.Here are a few top law firms in Utah that regularly handle these cases