Empire Recovery Collection Lawsuit: 6 Rights You Still Have

If you received a surprise lawsuit from Empire Recovery, it will most likely be a real shock. Getting sued in general can really get your anxiety levels going, but now you have the added stress of trying to run a business while this is happening. You still have rights and may be able to fight the lawsuit or have it dismissed completely.

The federal Fair Debt Collection Practices Act protects you from abusive collection tactics. However, it covers only personal, family and household debts. In most cases it does not cover a business sued on a business debt. But even if your debt is in fact owed, you still have protections that come from the court rules instead.

1. Answer on time

The first thing you need to do is answer the lawsuit on time. In New York, when you are served with a lawsuit, the deadline for how long you have to respond will depend on how you were served. If you are served in person, then you have 20 days to file a response. If you are served in some other way, you have 30 days from the date that service was complete to file a response. If you miss the deadline, you will be in default, meaning the judge can enter a default judgment against you. That deadline is not very long, especially if you are a busy person.

2. Check the clock

In New York, a lawsuit to collect on a contract generally must be filed within 6 years, but a confession of judgment can only be filed in the county where you lived or did business, and within three years of signing the document. Check both deadlines, as you may have a defense based on both.

3. Raise usury

If the deal was really a loan, your state may give you a defense. For example, in New York, loan sharks can’t legally charge more than 25 percent interest a year. A New York court allowed a corporation to raise a defense of criminal usury. A criminally usurious loan is void from the start.

One catch to look for is that, to qualify as a loan, the arrangement must be one in which you definitely have to pay back the money, no matter what. Are there adjustments based on the sales level of your business? Is there a fixed term for the loan? What happens if you go bankrupt?

Recently in New York, a state appeals court upheld a $8,234,160.50 judgment against a business that sold $7.5 million of its future sales for $5 million. The company had already paid $210,000 to the funding group, but later debits had bounced; the funding group then sued in court. The court pointed out that because the contract let payments adjust according to the level of sales, there was no fixed term to the payments; also because there was no default in case of bankruptcy, the transaction was not a loan; therefore the arrangement was not subject to a usury defense.

In the same case, the two owners had also signed a personal guaranty of the contract, and they too were covered by the judgment. Their racketeering and usury claims were thrown out, because these defenses did not apply to the contract. Courts will look at the real character of a deal, rather than the label it’s given.

4. Undo a default

Have you already lost by default, meaning that you failed to file a response on time and the court entered a judgment against you? If so, in New York you may be able to vacate, or set aside, the judgment against you if you are able to show excusable default. You can do this within a year of when you were served with the judgment and notice of its entry; if you want to wait longer than a year, you can only do so if you are able to claim that there was some kind of fraud, misconduct, or lack of jurisdiction over you.

5. Pause the case

If the debt is too big to fight, filing bankruptcy automatically stops lawsuits over debts from before filing. If your business debt is large, but $3,424,000 or less, then you may be able to file a special kind of bankruptcy case called a Subchapter V case.

6. Watch the regulators

In January 2025, the New York Attorney General won a $1.065 billion judgment against merchant cash advance (MCA) provider Yellowstone Capital. This cancelled over $534 million of debt businesses owed, and courts vacated listed unpaid judgments, the last batch in December of 2025.

New York has also had a disclosure law since Aug. 2023 requiring MCA providers to give standard disclosures with offers to a business for an amount up to $2.5 million; the Attorney General in June of 2026 sued arbitration service Rapid Ruling, alleging that businesses were absent in 97 percent of cases.

These rights will only help you if you use them in time, so as soon as you are served with the lawsuit, don’t ignore the summons. Read your contract and mark the deadline for when you have to file a response.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.