Nudelman INC Lawsuit: Defenses Worth Raising in Your Answer

If Nudelman INC, the funder that does business as Sure Thing Funding, has sued your company over a merchant cash advance, you should immediately contact a law firm with experience in the field of merchant cash advance litigation. Your Answer should identify affirmative defenses, like statute of limitations, payment, accord and satisfaction, release, waiver, estoppel, fraud, failure of consideration, as well as challenges to whether the cash advance is really a loan. Your Answer should include every line of defense you have, but if you want your Answer to have any credibility, your lawyer should identify the particular, detailed facts that back up each defense.

In New Jersey’s courts, Special Civil Part cases have a 35-day life cycle, counted from service. Federal court cases have a 21-day life cycle, generally. No matter how little or how much money is involved, none of it counts if you are late with an answer.

An oral agreement to hold off answering the Complaint is not worth the paper it’s not written on. If the agreement is written, signed by everyone, and filed with the court before the 35 days run out, the parties can write their own rules.

The Special Civil Part also demands that small businesses (other than individuals operating without corporate or LLC shielding) file their answers through lawyers, if the dollar figure is over $5,000.

Your contract may also have terms the courts are obliged to respect. One common term is an arbitration clause. That kind of clause can be waived. The same goes for a “venue-selection” clause or a “forum-selection” clause. If you do not raise a venue objection at the start, it will be lost.

Each Defense Be Set Out Specifically and Separately

In any answer, each defense, like anything a Complaint must list, should be identified precisely, not generically, with a separate paragraph for each. New Jersey Rule 4:5-4 also demands that each defense be set out specifically and separately. As for the statute of limitations, if the first missed payment is six years old (New Jersey’s general contract limitations period), the whole case might not be enforceable. If there really was a default, you should keep a careful record of the date. Pay attention, too, to when Nudelman says it happened. Check a calendar.

Payments and setoffs. The court will want to know the date of each alleged missed payment. You need to show the court every payment, whether it was taken from you or you sent a check. The more specific the facts the better. Be sure that Nudelman’s claimed receipts are for the same time periods as yours. Be sure the debits were not double debits. Make sure Nudelman deducted all the payments. “Setoff” can also reduce the claimed debt. Setoff is a complicated legal concept that shows the debt actually is lower because the claimant (here, Nudelman) owes you money. Did you ask Nudelman to adjust the daily payment down to match the actual receipts? Did they refuse? Set out the story, the dates, the times, the agents, exactly.

A “prior material breach” means, basically, that it was the other side’s fault first. So if Nudelman skipped a step it needed to take before suing (like a notice and cure letter), you can say that in an answer. What did the funder do in dealing with other “defaults”? Chasing current payments, waiving late fees, accepting late payments, may all be seen as “course of conduct” or waiver, or estoppel.

In the merchant cash advance arena, the funders’ name for the deal makes the argument that they are buying future receivables, not lending money, attractive. (You do not have to agree this description is accurate, by the way.) Your argument, well presented, may persuade the judge that a purported purchase of future receivables was really a loan with an illegal interest rate. The argument over whether a cash advance is really a loan or not is based on your circumstances and the agreement. There is no way to know without reviewing the contract, but if there are facts to defend on, get them on the record.

Fees add up, and they add up fast. The court will generally honor a contractual clause on fees. But that means Nudelman can only claim fees the clause and law allow. The clause might not cover what Nudelman claims, or it might mean that you also get a claim for fees. The demand for fees that would dwarf the principal may well be met with a demand to prove that such fees are really reasonable.

The federal Fair Debt Collection Practices Act (the FDCPA) makes lots of collection tactics illegal. It’s an emotional answer for a commercial defendant, but unless the debt at stake was for personal, family or household purposes, the debt probably isn’t covered by the FDCPA.

A prima facie case in a merchant cash advance case must contain a valid, signed contract, a material breach, and damages. Be sure Nudelman makes its case. If Nudelman is not the original party, it has to prove its claim was assigned to it. The burden is on Nudelman to produce documentary evidence, not just recitations, that the purported agreement signed by you or someone on your behalf is real. The larger the debt, the more effort is worthwhile to match the payment with the software debits. Read the Complaint and look for internal inconsistencies. If the dollar claims do not seem to make sense, say so.

Confession of Judgment

The confession of judgment clause in your agreement allows the merchant cash advance company to get a court judgment without suing you. New York CPLR 3218(a)(1) limits the effect of a confession of judgment, stating that a confession of judgment affidavit signed by you personally must state the county where you live, and must contain an affidavit specifying the amount owed and authorization to enter judgment.

Nudelman can only file a New York confession of judgment in the county where the confession of judgment says you were living when you signed it, or where you were living when it was filed. The venue rules are strict: a private funder can’t file anywhere else. A government agency enforcing the law may file in any county, but a private party may not. For a company, “home” is any county where the business operates. If you do not live in New York, or maintain a business there, no New York county is correct.

An affidavit is not a judgment, but when the party named in it files it with the clerk of the Supreme Court in the county designated as its residence in the affidavit, it becomes a court judgment that can be enforced like any other. The 3-year time to file it runs from the date the confession of judgment was signed. Check your affidavit for the year the affidavit was signed (you probably signed this back when you signed the agreement). Review it carefully for mistakes: it could be in the wrong court, for the wrong dollar amount, or signed by the wrong person.

In March 2024, the New York Attorney General sued Yellowstone Capital, claiming it had filed confessions of judgment in New York courts for years, including against borrowers outside New York, and used them to take money from bank accounts. A confession of judgment in the wrong county may be invalid.

The New York Attorney General’s Yellowstone settlement vacated certain unpaid Yellowstone judgments, but the claim filing deadline was January 9, 2026, and long gone. It does nothing for a judgment for Nudelman. Check to see if Nudelman’s paperwork is right. Did Nudelman file the affidavit in the right county? Is it properly signed?

Personal Guaranty

A personal guaranty, a promise to pay another’s debt, has to be in writing, and has to identify the people whose debt is guaranteed. The writing has to be signed by the guarantor personally or by someone acting for the guarantor. According to New Jersey’s Supreme Court, in Extech Building Materials v. E&N (2025), this rule is strictly applied. Tell the court what, if anything, you did sign.

Does the guaranty cover this debt? Rely on the full paper trail to look for renewal terms, since the claim may or may not be covered by the guaranty. If there is a guaranty, is it signed by you, in the capacity stated? How long does the guaranty run, and what keeps it in place? Read carefully for a guaranty renewal or termination.

Counterclaims can, if the facts are there, turn the tables completely. A counterclaim lets you get some money back. If the funder is violating the cash advance contract, write it in the answer. But your counterclaim must have substance. If it does not, don’t make one up. Improperly pled counterclaims invite court sanction motions. An improper counterclaim invites the judge to let the funder see your financial records.

To run a business, you have to keep money in the bank and you have to pay people. After a judgment, a court officer can take your money or personal property. Most of these cases end in a negotiated payoff, and the defenses you file decide the discount. If you do not file, you don’t have the defenses to negotiate with. Every fact that reduces Nudelman’s claim reduces the payoff.

Some funders are amenable to settlement on a reduced lump sum. Payment plans have to be negotiated, and those negotiations vary from funder to funder. A payment plan comes with a Stipulated Judgment, held in abeyance. Bankruptcy always has to be part of the consideration, but review its timing carefully: there is a difference between bankruptcy right before the settlement and bankruptcy right after the settlement.

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.