The first person who took your money was the MCA funder. The second may be the company that promises to fix it.

MCA debt settlement is an unregulated space occupied by legitimate attorneys, competent financial advisors, and a population of operators whose business model depends on business owners in crisis making decisions under pressure. The legitimate practitioners and the fraudulent ones use the same vocabulary. They promise the same outcomes. They advertise on the same platforms. Distinguishing between them requires asking questions that the fraudulent operators hope you will not think to ask.

The New York Attorney General's investigation into Yellowstone Capital revealed, among other things, the case of Mark Csantaveri, who operated a purported debt settlement firm that stole $3.4 million from clients and gambled away over a million. His clients were business owners already drowning in MCA debt who paid Csantaveri to negotiate on their behalf. He did not negotiate. He took their money and disappeared into a casino.

This is the extreme case. The more common version is less dramatic and equally damaging: a company that collects monthly fees, instructs the merchant to stop paying funders, and fails to achieve any settlement, leaving the merchant in worse financial position than before engagement.

Five questions separate the legitimate from the predatory.

Is the Company an Attorney or a Law Firm?

MCA debt settlement involves legal analysis, contract review, litigation defense, and negotiation with parties who have attorneys on the other side. A non-attorney settlement company cannot file motions to vacate confessions of judgment, cannot assert usury defenses, cannot litigate counterclaims, and cannot represent the merchant in court.

A non-attorney company can negotiate. But negotiation without the credible threat of litigation is negotiation without leverage. The funder knows the difference.

If the company is not a law firm, ask who provides the legal work. If the answer is "we have attorneys on retainer" or "we work with a network of lawyers," the company is a middleman. You are paying the middleman's fee and the attorney's fee, and the middleman's contribution to the outcome is the introduction.

What Happens to Your Payments While the Company Negotiates?

Many debt settlement companies instruct clients to stop making MCA payments and instead deposit funds into an escrow or reserve account managed by the company. The theory is that the accumulated funds will be used for a lump-sum settlement offer.

The practice has two risks. The first is that the escrow account is not protected. If the company is not an attorney, the account may not be held in a client trust account subject to bar association oversight. The money may be commingled with the company's operating funds. The second risk is that while the merchant stops paying, the funders continue to accrue the accelerated balance, file judgments, and freeze bank accounts. The merchant's position deteriorates while the settlement company collects monthly fees.

The company collected twelve months of fees. The funder collected a judgment.

Ask where the funds are held, by whom, under what regulatory oversight, and what happens to the money if the engagement terminates. If the answers are vague, the funds are not safe.

What Is the Fee Structure?

Legitimate MCA attorneys typically charge a flat fee, a contingency percentage of the savings achieved, or a hybrid. The fee is disclosed in a written engagement agreement before work begins.

Illegitimate operators charge upfront fees (sometimes thousands of dollars) before any work is performed, monthly "maintenance" or "program" fees that continue regardless of progress, and percentages calculated on inflated savings figures that do not reflect actual outcomes.

Ask for the engagement agreement in writing. Ask what the total cost will be if the matter settles in six months. Ask what happens to fees already paid if the company fails to achieve a settlement. If the company cannot answer these questions clearly, it is not a professional operation.

Can the Company Show You Documented Outcomes?

Ask for case studies, settlement letters, or client references. Not testimonials on a website. Actual documentation that demonstrates the company negotiated a specific MCA balance to a specific settlement amount within a specific timeframe.

Legitimate attorneys can describe their outcomes in general terms (settlement ranges, typical timelines, types of defenses employed) without violating client confidentiality. They can provide references from former clients who have consented to be contacted. They can describe their experience with specific funders and specific legal theories.

A company that cannot describe its outcomes with any specificity has not achieved any.

What Is the Company's Position on Taking New MCAs During the Process?

DEFENSE TEAM SPOTLIGHT

Todd Spodek

Lead Attorney & Founder

Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.

NY Bar Admitted
Multi-State Licensed
Federal Courts

Meet the Full Team

This is the question that reveals the most about the company's alignment with your interests. A legitimate attorney will tell you, unequivocally, not to take on new MCA debt while existing obligations are being negotiated or litigated. New debt complicates negotiations, creates additional creditor claims, and may extinguish legal defenses that apply to the existing agreements.

A company that encourages you to take on a new MCA (including a "reverse consolidation" or a "payoff advance") while simultaneously claiming to negotiate your existing debt is not a settlement company. It is a broker that earns commissions on new advances while charging you fees for the illusion of debt relief.

If the company suggests, recommends, or facilitates a new MCA during the engagement, terminate the relationship.

The Second Mistake Is More Expensive Than the First

The MCA that put you in financial distress cost you money and operational capacity. Hiring the wrong settlement company costs you money, time, and the legal defenses that a competent attorney would have preserved.

An attorney who practices MCA defense and debt settlement will assess your agreements, identify your legal options, and provide a clear, written description of the engagement terms, the expected timeline, and the fee structure. The first consultation is free. The assessment that follows is the most important document you will read since the MCA contract itself.