Served by Prompt Capital Funding? 5 Deadlines That Decide the Case

If your business has been sued by merchant cash advance funder Prompt Capital Funding, then stop everything and make a note of today’s date. In New York, if you got the lawsuit handed to you personally, then you have 20 days to appear. If you were served in some other way, like being left with someone else and mailed, then it’s 30 days. However you got it, make sure you’re calendaring a few days before you’d owe a response. Paying now, or talking about it, does NOT buy you time with the court. Also, check if you or your business are a named defendant, and whether anyone was officially “served” with the summons.

1. Mark the answer deadline

If they leave the papers with someone else at your house or office and mail them to you, or post them on your door and mail them, you have 30 days after service is complete, which is 10 days after the server filed proof of service with the court clerk. Remember there may be consequences if you miss the deadline.

2. Demand the complaint

If you get a “summons” without an actual complaint, New York law lets you write and serve a demand for one. Once the merchant cash advance funder gets it, they must serve a complaint within 20 days, or risk dismissal. Ask in writing, and keep a copy of whatever you send, plus copies of any proof of service, or certified mail receipts.

3. Challenge bad service fast

If they didn’t give you papers properly under NY laws and rules, challenge it fast! So take a close look at how you were served. Include this challenge in your answer and any other defenses or counterclaims you think of. Then, within 60 days after serving it, make a motion for judgment, unless a judge extended the time for undue hardship. Miss this deadline and you might lose the objection!

4. Watch the default clock

If you didn’t file an answer by the due date, you could be facing a default judgment. A “default judgment” is something ordered against you by a judge because you didn’t defend yourself, even though you had a chance to do so. You can try to undo this through a motion to “vacate” (cancel) the default judgment. In New York, you have one year after the judgment is served with notice of entry to ask for relief from the judgment based on excusable default - but don’t wait till then! Get legal help right away.

Once the judgment is entered, they may ask a court for enforcement measures like bank restraints or levies. If your account is on hold, review available documentation and seek counsel promptly to learn whether the hold stems from a judgment or UCC notice.

The best way to ensure this never happens is to respond in court as soon as you get papers, or ask a lawyer about special rules that might apply if you weren’t properly served. You must ask to defend within a year after learning about the judgment, but no more than 5 years after the judge entered it, if you weren’t served in person and never appeared, so long as you didn’t get timely notice and have a meritorious defense.

The funder who served you also has its own deadlines. If it served your company through the Secretary of State, then it must mail an extra copy of the summons to your corporation at least 20 days before a default judgment can be entered. Additionally, the funder must seek a default within one year after your default or the case will be dismissed as abandoned, unless there is sufficient cause.

5. Check the confession clock

If you signed a confession of judgment, New York law says it can be filed only within 3 years after the affidavit is signed, and only in the county where your business has a place of business or where you live. Also, be advised, some states have provisions that restrict or even bar confessions of judgment entirely. Confirm whether anything has been filed before proceeding.

For a contract claim in New York, the timeframe to start legal proceedings for most such cases is six years. However, beware of exceptions, such as sale-of-goods contracts. Be mindful that the longer timelines never slow down the important deadlines like answering or responding to lawsuits.

Remember to keep a record of each document received relating to the matter, including the date and method of delivery. Assemble copies of all relevant documents such as the MCA agreement and personal guarantee. If you’re faced with a settlement proposal or new financing arrangement, take your time to consider it carefully and seek legal advice before making any binding decisions, as you don’t want to make important choices under pressure.

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.