How Much Does Business Debt Settlement Cost? Breaking Down the Fees
Attorney-owned MCA settlement firms typically charge fees based on one of two models: a percentage of the total debt enrolled, or a percentage of the savings achieved. The fee should be disclosed before engagement. It should be proportional to the complexity of the case and the reduction achieved.
The Fee Structure
Percentage-of-debt-enrolled models charge fifteen to twenty-five percent of the total obligation. On a $150,000 MCA balance, the fee would range from $22,500 to $37,500. Percentage-of-savings models charge twenty to thirty percent of the difference between the original obligation and the settled amount. If the $150,000 balance is settled for $75,000, the savings are $75,000, and the fee would range from $15,000 to $22,500.
What the Fee Covers
The fee covers the contract review, the identification of vulnerabilities, the negotiation with the funder’s counsel, the documentation of the settlement, and the release of UCC liens. If litigation has been commenced, the fee may include motion practice, jurisdictional challenges, and emergency motions to unfreeze accounts.
The fee is not the cost of settlement. It is the cost of representation. The cost of not retaining representation is the full balance, plus the funder’s legal fees, plus the time the business spent inoperative.
Any firm that charges fees before reviewing the contract, or that guarantees a specific outcome before identifying the contract’s vulnerabilities, is not describing a legal service.
The fee structure should be transparent before engagement. We can explain ours.
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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.