script type="application/ld+json"> { "@context": "", "@type": "Product", "name": "Delancey Street", "aggregateRating": { "@type": "AggregateRating", "ratingValue": "5", "reviewCount": "10" } } 4 Options to Address Merchant Cash Advance Harassment | Delancey Street

4 Options to Address Merchant Cash Advance Harassment

Merchant cash advance companies are notoriously aggressive collecting payments. If your business falls behind, you may face persistent harassment from MCA debt collectors over phone, email, mail or even at your home and office. They rely on high-pressure tactics to demand immediate repayment rather than addressing the root inability to pay.When MCA harassment causes extreme stress, it becomes difficult to run daily operations. But there are ways to stop mistreatment while pursuing debt relief. Consider these 4 options:

1. Send a Cease and Desist Letter

Write a formal letter demanding collectors stop all communication tactics classified as harassment under the Fair Debt Collection Practices Act. Specify channels like phone, email, mail and in-person visits.Note that the MCA company reserves right to continue appropriate collection efforts like withdrawing directly from your merchant account. But clearly assert unacceptable harassment must end immediately. Send the letter certified mail with return receipt to have delivery confirmation.

2. Lodge Complaints with Regulators

If pressing collectors directly does not resolve harassment, submit complaints documenting mistreatment to regulators like:

  • State attorney general office
  • Federal Trade Commission (FTC)
  • Consumer Financial Protection Bureau (CFPB)

Regulatory complaints create a paper trail of inappropriate collection conduct. If MCA harassment involves illegal threats or deceit, regulators may sanction or fine the company. This motivates improving compliance.

3. Change Bank Accounts

Because MCA companies can access business bank accounts and merchant processors, open new accounts to temporarily halt withdrawals while pursuing debt relief. Cease use of old accounts so payments stall.Be discreet redirecting revenue streams since this technically breaches MCA contracts. Consult attorneys to ensure compliance with appropriate legal processes when diverting business funds. The goal is blocking access to stop harassment while seeking solutions.

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4. Explore Legal Options

An attorney can assess if MCA harassment violates consumer protection laws regarding deceptive practices or emotional distress. Violations enable demanding written assurance of halting collection misconduct. If harassment continues, a civil suit is possible seeking injunctive relief plus monetary damages.Threatening legal action often motivates rapid policy changes from MCA companies. If they realize court judgments may undermine entire business models, most reassess aggressive tactics to mitigate legal risks.The path depends on each business’ specific situation and applicable state laws. Discussing options with qualified legal counsel is key to addressing merchant cash advance harassment.

Using Bankruptcy to Eliminate Merchant Cash Advance Debt

Filing bankruptcy often provides the cleanest path to eliminating unmanageable merchant cash advance debt while allowing your business to rebuild. Below is an overview of how the bankruptcy process discharges MCA obligations.

How Bankruptcy Eliminates Debt

Business bankruptcy uses federal court protection to discharge debts and create breathing room from collections. The court essentially overrides private contracts like those governing merchant cash advances.Specifics vary by chapter type, but in general bankruptcy:

  • Immediately halts harassment from creditors and debt collectors
  • Prevents lawsuits against your business for outstanding debts
  • Discharges personal liability to repay MCA obligations
  • Allows keeping business open under approved restructuring plans
  • Wipes relevant debts like MCAs from business balance sheet

Bankruptcy law views this as necessary to rehabilitate viable businesses by eliminating unpayable financial burdens. While damaging credit, it provides opportunity to normalize operations.

Qualifying Business Types

Nearly all formally registered businesses qualify to file bankruptcy. Structures like sole proprietorships, partnerships, corporations, LLCs and others all fit eligibility.Filing requirements involve relatively simple paperwork outlining business details, ownership, debts and assets. Our advisors readily handle documentation and court submissions.

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