Can't Pay Merchant Cash Advance: What Happens Next?
Urgent Guide: Can't Make MCA Payments? Steps & Rights Explained
Urgent guide for businesses that can't make MCA payments. Learn what happens, your legal rights, and immediate steps to protect your business.
The MCA Default Crisis#
If you're reading this, you're probably in crisis mode. Your MCA payments are draining your bank account, you can't make payroll, and you're wondering what happens if you just stop paying. Let's talk about the reality of MCA default and what you need to do right now.
First, understand that MCA companies are not traditional lenders. They're often more aggressive, less regulated, and have legal tools that banks don't have.
What Happens When You Stop Paying#
Here's the typical timeline of MCA default and what you can expect.
- Days 1-7: Aggressive phone calls and emails demanding payment
- Days 7-14: Threats of legal action and confession of judgment enforcement
- Days 14-30: Possible bank account freezing or levy attempts
- Days 30-60: Legal action may begin, including lawsuits or COJ enforcement
- Days 60+: Potential judgments, liens, and asset seizure attempts
- Ongoing: Damage to business credit and banking relationships
Your Legal Rights#
Despite what MCA companies may tell you, you do have rights. MCAs must follow debt collection laws and can't harass or threaten you. Confession of judgment clauses may not be enforceable in your state. UCC liens must be properly filed and can be challenged. You have the right to negotiate and settle. Bankruptcy is always an option if necessary.
Immediate Action Steps#
If you can't pay your MCA, take these steps immediately: document everything including all communications and threats, stop automatic debits if possible, consult with a debt relief specialist today, don't ignore legal notices, explore settlement options, and protect your business bank account.
Settlement is Possible#
Even if you're in default, settlement is still possible. In fact, default often creates leverage for negotiation. MCA companies would rather receive something than nothing. Professional negotiators regularly settle defaulted MCAs for 20-40 cents on the dollar. The key is acting quickly and having experienced advocates on your side.