Baltimore Merchant Cash Advance Attorney: Your Guide to MCA Debt Relief
So you took out a merchant cash advance (MCA) to help your Baltimore business, and now you’re struggling to keep up with payments. Don‘t panic – you have options. Hiring an experienced Baltimore merchant cash advance attorney can help you find a solution, whether that’s negotiating a settlement, defending against a lawsuit, or pursuing legal action against a predatory lender. This article will explain everything you need to know about MCA debt relief and how a lawyer can help.
What is a Merchant Cash Advance?
A merchant cash advance provides businesses with quick access to capital in exchange for a percentage of future credit card sales. It works like this:
-- You receive an upfront lump sum payment, usually between $5,000-$500,000
- The MCA company takes a fixed percentage of your daily credit card receipts as repayment
- There’s no set repayment period – you pay back the advance as you make credit card sales
Unlike a small business loan, MCAs don‘t have fixed monthly payments or strict eligibility requirements. However, the equivalent APR is often exorbitantly high, sometimes exceeding 200%.
The Problem with Predatory MCA Lending
While MCAs provide fast financing for struggling businesses, they are largely unregulated. Many companies engage in predatory tactics, including:
- Misrepresenting repayment terms
- Charging excessive interest rates
- Aggressive collections and lawsuits
- Seizing assets through confessions of judgement
This can trap merchants in a cycle of debt. If you’re facing legal action from an MCA provider, don’t go it alone. Contact an attorney for help defending your rights.
Your Legal Options for MCA Debt Relief
If you‘re overwhelmed by MCA debt, a Baltimore merchant cash advance attorney can pursue multiple strategies to find a solution, such as:
-Renegotiating the MCA Contract
Your lawyer may be able to negotiate with the MCA company to lower your payments to an affordable amount. This avoids default or legal action.
Unconscionability Claims
If the terms of your MCA contract are unfairly one-sided, your attorney can argue they are “unconscionable” under Maryland law. This may invalidate all or part of the agreement.
Usury Violations
By calculating the effective APR, your lawyer may be able to prove your MCA‘s interest rate exceeds Maryland‘s usury cap. This can void the contract completely.
Debt Settlement
Your attorney can negotiate a lump-sum settlement to resolve your MCA debt for a fraction of what you owe. This provides immediate financial relief.
Bankruptcy
Filing for bankruptcy may discharge all or part of your MCA debt. Your lawyer can advise if this is the best option.
-Defending Lawsuits
If you‘re sued for nonpayment, your attorney can represent you in court and advocate for your best interests.
Countersuits & Claims
You may have grounds to pursue legal action against an unscrupulous MCA company for violations like fraud.
Beware of Confessions of Judgement
Many MCA contracts contain “confessions of judgement” or “COJs”. This gives lenders the right to seize your assets without notice if you default. COJs are banned in some states but still common in Maryland. Never sign one without understanding the risks and consulting a lawyer.
-Questions to Ask a Prospective MCA Attorney
If you decide to hire legal help for your MCA debt, here are some questions to ask prospective attorneys:
- Are you licensed to practice law in Maryland state courts?
- How much experience do you have handling MCA debt specifically?
- What are your fees and how are they structured? Are they reasonable?
- What strategies will you use to address my specific situation?
- If I’m sued, will you represent me in court?
- Can you provide references from past MCA debt relief clients?
Avoid any lawyer who guarantees they can completely erase your MCA debt. Reputable attorneys will discuss realistic outcomes based on your circumstances.
Baltimore Merchant Cash Advance Lawyers Can Help
Don’t let predatory MCA lending practices put your Baltimore business at risk. The experienced Maryland MCA debt relief attorneys at [Law Firm Name] are here to help. We understand the MCA industry and how to protect your rights. Contact us online or call [phone number] for a free consultation.
Frequently Asked Questions
What is a merchant cash advance (MCA)?
A merchant cash advance provides businesses with quick financing by purchasing a percentage of the company‘s future credit card sales. The business receives an upfront lump sum and repays it as a fixed percentage of daily credit card receipts. MCAs are advances, not loans, so they are largely unregulated.
How much does a merchant cash advance cost?
MCAs are very expensive compared to traditional small business loans. The equivalent APR often exceeds 100%, sometimes reaching over 200%. The total cost depends on the payback period. MCA companies take a fixed percentage of daily credit card sales, so the longer it takes you to repay, the more you pay in fees.
Why are MCAs risky for borrowers?
Since MCAs are unregulated, some providers use predatory tactics like misrepresenting terms, charging excessively high rates, aggressive collections, and lawsuits. Many MCA contracts contain “confessions of judgement” allowing lenders to seize assets without notice. This can trap borrowers in debt.