If you’re struggling with merchant cash advance (MCA) debt, speaking with an attorney can be a helpful and important step toward regaining control of your finances. But walking into that first conversation unprepared could mean wasted time and missed opportunities to strengthen your case.
To make the most of your consultation, you need to be prepared. Here’s everything you need to know so you can approach your conversation with confidence and a clear strategy.
Preparing for Your Initial Consultation
You may wonder what to expect out of your consultation with an MCA attorney. Each attorney is different, but there are certain topics you’ll likely cover and questions you’ll want to ask.
Gathering Essential Documents
Before your meeting, you should gather some paperwork to help give your attorney a better idea of your circumstances. Bring the following documents to provide a complete picture of your financial situation and MCA contract:
- The MCA agreement: Include all pages, terms, and conditions.
- Payment records: Proof of payments made so far, including bank statements or payment receipts.
- Correspondence with the MCA provider: Emails, letters, or notices related to the advance.
- Business financial records: This should include recent profit and loss statements, balance sheets, and/or cash flow statements.
- Bank statements: At least 6-12 months of business bank account statements to show payment deductions and financial activity.
- Default or demand letters: Any communications from the MCA provider about non-payment or default.
- Legal documents: If applicable, have documentation around lawsuits, judgments, or liens related to the MCA, as well as any notices from collections agencies.
- Other loan agreements: If applicable, bring agreements for other loans or advances to show your overall debt obligations.
Understanding Your Financial Situation with Your MCA
The MCA debt attorney will likely ask detailed questions to assess your case. Be prepared to discuss:
- Why you took out the MCA: Share the reasons for obtaining the advance and whether it was tied to specific business needs.
- Challenges with repayment: Explain why you’re struggling with payments and any external factors, like an economic downturn or sudden drop in revenue.
- Communication with the MCA provider: Detail any discussions or settlement offers made so far.
- Your business’s financial health: Provide a clear overview of your current cash flow, liabilities, and assets.
Key Questions to Ask Your Attorney
When meeting with an attorney about your merchant cash advance, asking the right questions will help you better understand your situation and options. Here’s a list of important questions to consider:
Questions About the Merchant Cash Advance Agreement
- Are the terms of my MCA agreement legally enforceable? In other words, does it comply with state and federal laws, or are there potential violations?
- Is my MCA considered a loan or a true sale of future receivables? How does this distinction affect your legal rights or obligations?
- Are there clauses in the agreement I should be particularly concerned about? These can include a confession of judgment (COJ) or personal guarantees.
Questions About Financial Relief Options with your MCA
- Can you negotiate with the MCA provider on my behalf? Follow up by asking what strategies could effectively reduce or restructure the debt.
- What happens if I can’t repay the MCA?
- Can I stop the MCA provider from debiting my bank account?
- Are there alternatives to paying the MCA in full? Other options may include settlements, payment plans, or challenging the validity of the debt.
Questions About Legal Protections
- Can the MCA provider freeze my business accounts or place liens on my assets? If so, how can you protect your accounts and property?
- Am I personally liable for this debt? If there’s a personal guarantee, how does it affect you and your assets?
- How can I prevent further harm to my business from this MCA? That can include avoiding additional fees, penalties, or lawsuits.
Questions About Litigation and Legal Strategy
- What are the chances of successfully defending against the MCA provider in court?
- What should I do if the MCA provider has already filed a lawsuit?
- Is bankruptcy an option for resolving this debt? Plus, how would it affect your business and personal finances?
- What’s the potential timeline for resolving this issue?
Questions About Costs and Representation
- What will it cost to hire you, and what are your fees? It’s important to know whether the MCA attorney charges hourly, a flat fee, or on contingency for certain outcomes.
- What are the potential costs of resolving this MCA debt? This may include court fees, settlements, or additional legal expenses.
- Can you estimate the total cost of your legal services based on my case?
Closing and Follow-Up Questions
- What is the next step I should take after this meeting?
- Will you provide a written summary of our plan or recommendations?
- How often will we communicate, and what updates can I expect during the process?
- What should I do if the MCA provider contacts me again?
What to Expect During the Conversation
During your meeting with an MCA debt relief attorney, you’ll discuss your business’s financial situation and the specifics of your merchant cash advance. Be ready to share details about your business’s cash flow, revenue, expenses, and the strain caused by MCA payments. Bring all relevant documentation, including the MCA agreement, payment records, and correspondence with the provider, so the attorney can assess your obligations and identify any problematic terms in the agreement.
Expect to talk about your relationship with the MCA provider, including any collection efforts or legal actions they’ve taken. The attorney will explain your rights, assess risks like potential lawsuits or account freezes, and recommend strategies to protect your business and personal assets. Depending on your situation, options may include renegotiating terms, settling the debt, or filing for bankruptcy.
You’ll also discuss costs and timelines for legal representation and establish a plan for moving forward. Be prepared to ask questions about the enforceability of the MCA, how to stop aggressive collection tactics, and long-term strategies for financial stability. This conversation will help you and your attorney set clear goals and develop an actionable plan tailored to your circumstances.
Follow-Up Steps After the Conversation
After your initial conversation with the debt relief attorney, you should take several steps to follow up and move toward resolving your MCA issues. Here’s a list of actions to prioritize:
1. Gather and Provide Additional Documentation
If the MCA debt relief attorney requests more details or specific documents, ensure you collect and share them promptly. Examples include:
- Updated financial statements.
- Additional correspondence from the MCA provider.
- Legal notices or filings, if applicable.
2. Follow the MCA Attorney’s Immediate Recommendations
Act on any immediate steps outlined by the attorney, such as:
- Stopping unauthorized payments (e.g., revoking ACH authorization).
- Avoiding new debt obligations while the matter is being addressed.
- Preparing for potential communication or negotiations with the MCA provider.
3. Stay Organized
It’s important to keep detailed records of all interactions with the MCA provider, your attorney, and any third parties. Maintain copies of all written correspondence, and if you speak with anyone over the phone, be sure to note their name, position, and contact information.
4. Communicate Regularly with Your MCA Attorney
Be sure to stay in touch to receive updates on progress or changes in your case. You should also share any new developments immediately, such as additional collection efforts or settlement offers.
Contact Tayne Law for MCA Debt Help
MCA debt can feel overwhelming, but the right legal guidance can help you find the right solution. Taking the time to prepare now will empower you to make informed decisions and move toward a resolution with confidence.
If you’re on the fence about hiring legal help for your MCA matters, contact us for a no-obligation phone consultation to review your MCA matters. Tayne Law has assisted business owners and individuals with their debt problems for over two decades and helped business people just like you. We can assess your situation and answer your questions about how our services could benefit you. All conversations are confidential, and we never share your information or outsource any aspect of our services. So call us at (866) 890-7337 or fill out our short contact form.
