Jet Capital Funding Demand Letter or Lawsuit? 6 Differences That Matter

If you took a merchant cash advance from Jet Capital and have fallen behind, the first thing to understand is that a demand letter and a lawsuit are two different things. In plain terms, a demand letter is simply a letter, it is not a lawsuit. A lawsuit is a formal proceeding in a court that is filed by a plaintiff - a person or business owed money - against a defendant. Once you are sued, deadlines start running and you must pay attention and follow procedures. Failure to do so may result in a default judgment against you. The danger of a demand letter is that it can lead you to think you have more time than you do when a lawsuit is coming.

1. No court, no filing

Although a debt collector may threaten the immediate filing of a lawsuit, a demand letter does not come from a court and does not have a case number. Still, a demand letter may indicate that a lawsuit is about to follow. It costs money to file a New York case (a $190 index number fee, paid in advance) and you will be sued only if someone is willing to pay the fee. Note, too, that business debts that result from a merchant cash advance are not consumer debts and the Fair Debt Collection Practices Act, or FDCPA, generally does not cover you.

2. A clock starts running

If you ignore the letter entirely, the next thing you may hear from the creditor is from a process server. That is when you know a lawsuit has been filed. You will generally have 20 days from the date of service to answer. It can be 30 days instead, because the actual time depends on whether service was made by personal delivery or by a method called “nail and mail” in which copies are mailed as well as “nailed” to your front door. Miss it, and a default judgment can be entered against you.

3. Silence turns into a judgment

Answering a lawsuit in time is your way to tell Jet Capital - or any other company or debt collector - that you are alive, aware and listening. If you do not answer and a lawsuit seeks a fixed sum, the plaintiff may file a request with the clerk of the court without even seeing a judge. Default judgments may be vacated (annulled) if you can show to the court that the failure to respond was the result of “excusable default.” A request to vacate a default judgment can be made for up to one year after you receive notice of the entry of the judgment.

Another route, confession of judgment, is a device which skips the lawsuit step and leads directly to a judgment. But since August 30, 2019 New York law allows that only if a debtor resides in New York, meaning it can be used only against a business with a place of business in New York.

4. A judgment reaches your bank

Even after a judgment is entered, the creditor will still need to take action to collect. The creditor’s attorney can send a restraining notice to your bank. The restraining notices will freeze the funds in the judgment debtor’s bank accounts up to twice the amount of the judgment. The restraint on a judgment debtor’s bank accounts lasts for one year unless the judgment is paid or vacated. No demand letter can do that. The lesson of a demand letter from Jet Capital or any other creditor is that ignoring the problem is an active decision.

5. Settling a lawsuit binds you

A lawsuit can be settled if the creditor and the debtor agree to a settlement. Signing a settlement contract will legally bind you to the terms of the settlement. In 2026, a New York appeals court ruled on a case involving Diesel Funding. Build Retail was sued by Diesel Funding in August 2022 and agreed to a stipulation settling the case for $1,150,740.12. It made none of the payments. The judgment entered without notice was for $1,476,330.68, with 20% fees added. The court refused to undo it.

6. Use the contract’s own tools

Build Retail argued the MCA was a usurious loan, but the court rejected the theory. Because the amounts due under the agreement were flexible, changing with the merchant’s future sales, the court ruled this was not a loan, and therefore not subject to New York’s usury laws.

Under the agreement with Diesel Funding, Build Retail was entitled to a reconciliation. Build Retail never asked for the reconciliation its contract offered; so the court would not hear its claim that reconciliation was illusory. The lesson is, use it if the contract offers it.

Do you have a demand letter, a lawsuit or both? The goal is to resolve it before a default judgment can be entered.

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.