Served by Avion Funding? 5 Deadlines That Decide the Case

The person who is sued (defendant) generally has 20 days in New York state court, or 21 in federal court, to respond to the lawsuit. If you fail to respond (file an answer), Avion Funding can seek a default judgment against your business. An Answer is a legal document served on the plaintiff and filed with the court. The Answer responds to the allegations and causes of action in the complaint and must include any affirmative defenses. If you have already missed these deadlines, do not let one more day pass.

1. Count your answer days

To answer a lawsuit, your business must act quickly. The amount of time you have to respond is calculated from the date that you were served. The dates are calculated differently, depending on whether your business was served personally or by other means. Upon being served, you have 20 days to respond in New York state court if the papers were handed to you personally, 30 days if they were served another way, or 21 days in federal court. If your business misses this date and time, you may lose the opportunity to challenge your debt.

2. Demand the complaint

If Avion Funding has filed the case without a complaint, you do not have all of the necessary documents needed to defend your case. You have the right to demand in writing the “complaint,” which contains the specific factual allegations of Avion Funding’s lawsuit against your business. Requesting a copy of the complaint is not the same as answering the lawsuit. Avion Funding has a legal duty to provide you with the complaint within 20 days of receiving your request. Keep a copy of the demand for your records.

3. Put usury in your answer

Add your usury defense in your Answer to the complaint. There’s no usury if there is no “loan.” So the first question is: was there a loan? If there was no loan, there can be no usury, no matter how harsh the deal. This can be confusing, because ordinary people and businesses often call something a loan when it really isn’t. Call it what you want; courts look at its real character, not its label. The court usually tries to balance three factors: whether the contract says that there was a reconciliation provision, whether the agreement had a finite term, or whether there was any recourse if the merchant went bankrupt.

In one New York appeals case, the funder could adjust payments only at its sole discretion, a merchant bankruptcy was a default, and the usury defense stayed in. Where the funder paid $100,990 for $129,267.20 of receivables in exchange for 15% of daily revenue, the agreement as a whole suggested that the funder took no risk of low revenue. Criminal usury can be raised as an affirmative defense and not as a counterclaim, so the language belongs in the answer and not in the counterclaims.

4. If you already missed it

If you miss the deadline to answer a lawsuit, do not give up. You should file your answer immediately, and ask the court to forgive the delay. If your business has a reasonable excuse for being late with your answer to Avion Funding’s case, a court may allow you to file late. What is reasonable is up to the court.

If you got a default judgment against your business because of a mistake that wasn’t willful or intentional, you can ask for it to be canceled by making a motion to vacate. You need to get all this done within one year after you were served with the judgment and written notice of entry. If you were never personally served, and never got a proper notice in time, then you might still have a chance, even years later, to undo the judgment. You have a year from when you find out about a court judgment or five years from when the judgment was filed to vacate it, whichever happens first. But in order to reverse a judgment, your business must have a legitimate defense.

5. Watch the judgment clocks

You can appeal the judgment in New York within 30 days after you are served with the judgment or order and written notice of entry. An appeal is an opportunity to take the lawsuit to another court and have a higher-ranking judge look over the case.

A confession of judgment is an agreement you made to automatically lose in court. A funder can only file your confession of judgment against your business if they do it within three years of signing. Also, they can only do this in a county where you live, or have a business. A restraining notice on your bank, which freezes your accounts, lasts one year from when the bank was served with it. It can also run out sooner, if your judgment is paid or vacated first.

Time is of the essence, and these deadlines move along on their own, whether you do anything or not. When you get your papers, mark your calendar for a day before every deadline, so you won’t miss it.

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.