How Much Can I Expect to Save Through Business Debt Settlement?
In MCA cases, settlements typically reduce the outstanding balance by forty to sixty percent. A merchant who owes $150,000 under an MCA agreement can reasonably expect to settle for $60,000 to $90,000. The precise figure depends on the contract’s vulnerabilities, the funder’s internal policies, and whether litigation has been commenced.
The Range and What Determines It
Contracts with unenforceable COJ clauses, breached reconciliation provisions, and misrepresented personal guarantees produce settlements at the higher end of the reduction range. Contracts with fewer identifiable vulnerabilities produce settlements closer to the lower end. The presence of an attorney-owned firm with specific MCA experience shifts the range in the merchant’s favor.
What Determines the Number
The funder’s assessment of litigation risk. A funder whose COJ clause is unenforceable and whose reconciliation obligations were not honored faces a weaker position than a funder whose contract is well-drafted and whose conduct was compliant. The funder’s internal settlement authority. Some funders authorize settlements at fifty percent as a matter of policy. Others resist until presented with specific contract deficiencies.
The savings are not speculative. They are the product of identifiable vulnerabilities in identifiable contracts. The contract determines the range. The attorney determines where in the range the settlement falls.
The contract’s weaknesses determine the savings. We can quantify them.
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Disclaimer: This content is for informational purposes only and does not constitute legal advice. Results vary based on individual circumstances. Past results do not guarantee future outcomes. If you are in legal distress, consult a licensed attorney.