Midnight Advance Filed Suit: 7 Questions to Answer Before You Respond

If a company named Midnight Advance Capital LLC files a lawsuit against your business, the first answer may be good news. Midnight Advance is covered by the New York Attorney General’s settlement against Yellowstone Capital, which canceled their debts and dismissed their pending lawsuits. But still read the court papers, confirm that the lawsuit you have in hand was filed by one of those companies, don’t ignore the deadlines on the papers, and get a lawyer to look.

1. Who is actually suing

First read the caption at the top of the first page. Get the company name exactly right, to be sure that it’s the same company the New York attorney general’s office says it settled. If your plaintiff is Delta Bridge Funding or Cloudfund, the lawsuit is not covered by the settlement, at least as of January 2025. Delta Bridge took over Yellowstone’s business in 2021. Also check what you actually received: a demand letter, an email from a collection agency, a lawsuit, and a judgment are each different stages that require different responses.

2. Is the debt already canceled

If the plaintiff is Midnight Advance Capital LLC, the debt is canceled under the settlement. The New York Attorney General obtained a $1.065 billion settlement that canceled about $534 million in debts owed to Yellowstone and related companies. The settlement canceled their entire debt portfolio, personal guarantees included. It also dismissed pending lawsuits that Yellowstone had filed to collect those debts. And the settlement permanently banned the individual officers of the companies that settled from working in the cash advance industry.

3. Are they still coming after you

If you think the lawsuit is covered, the Attorney General’s website invites complaints if they’re still pursuing you. Keep the summons and complaint, all exhibits, envelopes and emails related to it, in a safe place with your other important records. Write down the date and how you got it. Save your agreement, payment history, receipts and bank statements. Your bank statements can help show whether payments were made, when, and how much. Still, get a lawyer to help you in responding to this lawsuit.

4. When is your deadline

The deadline to respond to a lawsuit depends on the court and how the defendant got the papers. If the papers were handed to you in person in the state, New York courts usually set a deadline of 20 days. For other service, the deadline may be 30 days, counted from when service is complete. Only certain kinds of responses to a lawsuit will change your deadline, and a phone call isn’t one of them. If anything about service looks wrong, have a lawyer check the papers to confirm whether they were properly served.

5. Is there already a judgment

Courts vacated the judgments won by Yellowstone Capital and related companies in batches after the settlement. The last batch was vacated on December 18, 2025. So if you have a judgment on your record, get a lawyer to look into whether it was vacated. Yellowstone judgments that were fully paid were not required to be vacated.

Even if a judgment against you was not vacated, you may be able to get it canceled. In New York, a party can bring a motion to vacate a judgment for up to one year after notice of its entry based on excusable default, while lack of jurisdiction or fraud has no stated deadline. A confession of judgment in New York must be filed only in the county where the defendant says it resided when signing, or actually resides at filing, and only within three years after signing. Get a lawyer to help fight any lawsuit or judgment against you.

6. Are you named personally

Look at the caption to find whether you are named personally, or only your business. The lawsuit you have may be against the company, but you may be personally liable if you signed a personal guarantee. While small business owners often personally guarantee their business debts, their interests don’t always align. A decision that is good for the company may be bad for the owner, and vice versa. If it looks like your interests are against those of the company, you may need separate lawyers. If you are named personally, you may want to consult an attorney to make sure you understand the claims against you.

7. Who is handling it

If you’re working with a negotiator, check whether they’ll actually defend you in court if a lawsuit follows. Sometimes, the company will only negotiate on the debt, leaving you on your own in the lawsuit. Negotiating payments and defending a lawsuit are usually separate jobs.

A lawyer should also check the contract itself. The state appeals court in LG Funding v. United Senior Properties (2020) looked at three things to decide whether an MCA is a loan or not. It asked whether there is a reconciliation provision, or if there is a finite term, and whether there is recourse against the merchant if they go bankrupt. If it was a loan, over 25% a year was criminal usury.

Settling a Lawsuit

Settling a lawsuit means more than paying a company off. A written deal will help you move on if it states: the total amount, to be paid how and when; which parties are released (include any personal guarantee if applicable), and how they’ll end the lawsuit. It should also say what will happen if you miss a payment. A lower periodic payment does not mean your debt is smaller than it was. Don’t assume a single deal will be enough to fix all your debts. Keep records of each individual agreement to know your cost.

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.