Served by Liquidibee LLC? 5 Deadlines That Decide the Case

If you are facing a lawsuit from Liquidibee LLC, you have several critical deadlines that you must meet to protect your rights and defend yourself in court. You only have a limited time to respond. New York courts impose strict time limits on answers, and generally those limits are 20-30 days after the date of service of the summons. Each step in the lawsuit process has its own deadline, and missing any of these deadlines can have serious consequences for your case.

1. The answer deadline

The most critical deadline in any lawsuit is the answer deadline. This is the deadline by which you must respond to the lawsuit. Failing to meet this deadline can result in a default judgment being entered against you. In New York, if the summons was handed to you personally in the state, you usually have twenty days from that date to answer. But if the summons was served in some other way - say, left with someone else at your residence or delivered through a state official - then the clock starts when service is considered complete, and you will usually get thirty days from that date. In federal court cases, you normally have twenty-one days to answer.

If the summons arrived without the complaint (the document stating the legal claims being made against you), promptly request that it be sent to you in writing. The plaintiff must provide the complaint within twenty days of receiving this demand. It is important to note that in New York, corporations cannot answer or appear in their own right - they must do so through a lawyer (with some exceptions for small claims court cases).

2. Objections with a shelf life

There are certain types of objections that must be raised early in the case, or you may lose the right to challenge them later. In New York, objections to the court lacking personal jurisdiction over you are waived if you don’t include them in your first motion to dismiss the case or, if you don’t file any motions to dismiss, in your first answer. Similarly, if you raise improper service in your answer but don’t then move for judgment on the issue within sixty days after serving the answer, it will generally be considered waived. The court may extend this deadline if there was undue hardship.

Beyond these objections, answering the lawsuit gives you the opportunity to assert legal defenses. In an MCA lawsuit, one of the strongest arguments in your defense is that it was really a loan. If you find that your agreement had fixed daily payments regardless of your revenue, or the lender ignored reconciliation requests, courts may reclassify it as such. And if the effective APR exceeded New York’s 25% criminal usury threshold, the agreement would be void.

3. The six-year clock

The statute of limitations dictates the maximum time a creditor has to sue you. A six-year limit is the standard for contracts in New York, but some agreements can be subject to different time bars. A claimant may miss the cut-off date on an old contract, so it’s always worth reviewing. If you are defending against a lawsuit for breach of contract, check the allegations and see if they happened outside this six-year window.

4. Default and the bank freeze

Missing your answer deadline can have serious consequences. The plaintiff can request and obtain a default judgment against you, meaning you lose without ever having a chance to present your case. One thing to look out for is if your company was served through the Secretary of State. If so, then the plaintiff must also mail the summons to your last known address at least 20 days before a default judgment can be entered.

If there’s a judgment against you, the funder can send a restraining notice to your bank, which must freeze the account immediately with no prior warning. This freeze can last up to a year or until the judgment is paid off or overturned. Personal guarantees complicate things further - your personal accounts may also be subject to the freeze. This can lead to payroll bounces and other financial disruptions.

A personal guarantee also extends the lender’s power beyond your business - they can come for your personal assets, your house, savings, and vehicles. Even if your business shuts down, you still owe the debt. If a judgment is issued against you as an individual, it becomes part of the public record and can appear on credit reports.

5. One year to undo it

A default judgment is not necessarily the end of the road. You may still be able to vacate the default. You have one year from when the judgment was served with a written notice of its entry to file a motion to vacate for excusable default. Alternatively, if you were not personally served and never actually received notice in time, you can ask to defend within one year after you learned of the judgment (but never more than five years after entry), if you have a meritorious defense.

In New York, if the funder instead skips the lawsuit and jumps straight to a confession of judgment (COJ), it may not hold up in court. New York banned COJs against out-of-state borrowers in 2019, and may not enforce ones filed against them. For in-state companies, there are strict procedural requirements that funders frequently fail, which could be grounds to have the COJ vacated.

Exploring Settlement

At any of these points, exploring settlement is often wise. Litigation is expensive and uncertain for funders, and many may accept a reduced lump sum if it means avoiding court.

If you’re struggling to meet payments on a MCA agreement, you can try to negotiate with the funder for forbearance, lower payments, or an agreement to reconcile payments to actual sales. Put all communications in writing. If the funder refused reconciliation, that can strengthen your argument that it was really a loan. Bankruptcy is generally a last resort, but filing automatically stops most pending lawsuits.

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.