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Last Updated on: 14th September 2023, 12:40 am
Navigating Merchant Cash Advances in North Carolina
Merchant cash advances (MCAs) are popular with small businesses in North Carolina. But what happens when you fall behind on payments? This article explores how merchant cash advance attorneys in North Carolina can help.
The MCA Landscape in North Carolina
North Carolina doesn’t regulate or license MCA companies. This leaves merchants vulnerable to predatory lenders. According to a 2022 report by Opportunity Fund, North Carolina had over 1,300 MCA companies operating in the state. Most were based out-of-state.
The lack of oversight means MCA providers in NC often get away with:
- Charging excessively high rates and fees
- Misrepresenting the true cost of the advance
- Requiring unreasonable repayment amounts
- Using aggressive collection tactics
Many NC business owners who get an MCA end up owing two to four times what they received. If your business hits a rough patch, you can end up falling way behind.
How Can a North Carolina MCA Attorney Help?
If you’re underwater on your merchant cash advance, don’t go it alone. Hiring an experienced North Carolina MCA lawyer levels the playing field. Here are some ways they can help:
- Review your agreement for prohibited terms or violations of NC laws
- Negotiate a settlement or payment plan with the MCA provider
- Defend against lawsuits and collection efforts
- Have the MCA invalidated if unlawful terms are found
- Reduce the balance owed through legal arguments
- File bankruptcy to discharge part or all of the debt
The right attorney understands MCA company tactics in North Carolina. They know where providers cross the line and how to challenge them legally.
Finding the Right NC MCA Attorney
It’s important to choose an attorney experienced with merchant cash advances. Here are some questions to ask during your search:
- How many years have you handled MCA cases in North Carolina?
- Are you familiar with NC state laws regarding MCAs?
- What strategies have you used to successfully challenge MCA companies?
- Can you provide references from past NC MCA clients?
- Will you review my agreement for violations at no cost?
Look for lawyers that offer free consultations and case reviews. Make sure you understand their fees before retaining them.
Common MCA Violations in North Carolina
When reviewing your MCA agreement, your attorney will look for these common violations:
- Rates and fees higher than North Carolina’s legal limits
- Failing to register as a lender with the NC Commissioner of Banks
- Requiring unreasonable daily repayment amounts
- Including illegal terms like personal guarantees or confessions of judgement
- Using deceptive language like calling it a “purchase agreement”
If prohibited terms are found, that gives your lawyer leverage to invalidate the agreement. Any lawsuits or collections against you could be dismissed.
Negotiation Strategies in North Carolina
Your attorney will first try negotiating with the MCA provider to reach a settlement. Common negotiation tactics in NC include:
- Offering a lump sum payment for less than you owe
- Proposing a reduced payoff amount as satisfaction of the debt
- Asking for lower daily payments based on your current sales
- Trying to convert the MCA to fixed monthly payments
- Threatening legal action if they won’t negotiate reasonably
Having an attorney involved shows the MCA company you mean business. Many will agree to settle to avoid litigation.
North Carolina MCA Defenses
If a settlement can’t be reached, your lawyer can defend you from any lawsuits filed. Possible defenses include:
- The agreement violates North Carolina lending laws
- The MCA company failed to register properly with the state
- The fees, rates, and repayment terms are unlawful
- Fraud, misrepresentation, or nondisclosure of terms
- Unconscionability of the agreement terms
Your attorney will craft the strongest defense based on violations found in your MCA contract. The goal is to invalidate the agreement or have the case dismissed.
Should You File Bankruptcy?
If you owe multiple MCAs or other debts you can’t pay, bankruptcy may be an option. Filing Chapter 7 or Chapter 13 can discharge part or all of your merchant cash advance debt. Your attorney will advise if bankruptcy makes sense for your situation.
Act Fast to Protect Your Rights
If you received a merchant cash advance in North Carolina and are struggling with payments, take action now. The sooner you consult a knowledgeable MCA attorney, the more leverage you’ll have. Don’t wait until you receive threats of lawsuits or other collection efforts. An experienced lawyer can negotiate a settlement and defend your rights under North Carolina laws.