Served by Mns Funding: 8 Documents to Pull Before You Respond

If you have been sued by Mns Funding or some other merchant cash advance company, contact an experienced business attorney immediately. A summons is a document that marks the beginning of a lawsuit. First, I always recommend you look to see what deadline you have before you do anything else, because if you are out of time to respond in some of these cases, some of the default judgments can get pretty harsh. Once you have a pretty good idea of the time you are working with, I want you to pull all your paperwork that relates to that. You want to be looking for contracts, merchant agreements and those types of documents. You also want to gather all the records of payments that you made toward that agreement, whether it be account statements, receipts, or whatever you might have.

1. The summons and complaint

The complaint is the document that states the factual allegations, explains how the plaintiff was wronged and says what the plaintiff wants out of the case. The summons is the document that accompanies the complaint and tells the defendant that a lawsuit is underway. I always recommend that you look at both the complaint and the summons, because the summons will say exactly how long you have to respond and where you have to respond. It is really your opportunity to review what your deadline is, and make sure you are clear on that so you do not fall out of time to answer. In New York, the summons rules for getting sued are based on how the summons and complaint are delivered to you. Being personally handed a summons generally gives you 20 days to appear, but you’ll have 30 days if you got the papers via most methods besides personal delivery. In addition, if you got the papers via substituted service, nail-and-mail, or if you were served outside the state, the time starts running from when service was complete, not when the papers were dropped in the mail.

2. The affidavit of service

This document shows when and how the lawsuit papers were served. The affidavit should contain information on how, when, where and to whom the service was made. Sometimes service of the owner-guarantor summons and complaint is done by leaving papers with someone else and mailing a copy. In that case, service is not complete until 10 days after the proof of service is filed with the court clerk. So it’s crucial to look at the filing date as well. If mailed to a place of business, the envelope must be marked “Personal and Confidential” and not show it was sent by a law firm or is about a legal matter. If you think there was a problem with delivery, you need to keep the envelope to show what it said and what the postmark was. If you raise improper service in your answer, you waive the issue unless you move for judgment on that ground within 60 days. The court may extend this period if there was undue hardship.

3. The MCA agreement itself

The MCA agreement is pretty key to this type of action, because that is generally what everything that is going on in the lawsuit is stemming from. You want to have the agreement in front of you so you can make sure that the complaint really fits with it, and it will be helpful for you when you go to prepare your answer or you go to discuss this with your attorney. Your review of the MCA agreement should also extend to any other documents that came along with it, including any amendments. There is no universal grace period for every MCA agreement, and there is no notice requirement before default that applies to every contract. Some do give notice or a chance to cure, others do not. Read the default clause with the notice and reconciliation terms. A usury defense is not available to corporations in New York, except for criminal usury, which requires a knowing excess over 25% a year.

4. Any personal guarantee

One thing I think people should really make sure they are aware of is whether or not they actually signed a personal guarantee. Sometimes the MCA’s will have a personal guarantee that gets added into the agreement in some fashion or it gets signed onto a separate page. This is important to check out if you are being sued personally. You want to check out the scope of the personal guarantee, and figure out exactly what you are liable for before you even get down to your other defenses.

5. A confession of judgment

This is a document in which someone voluntarily agrees to the entry of a money judgment against them. Some funders try to use it instead of an ordinary lawsuit, but this is possible only where law permits it. So check your own state’s rules. In New York, one can only be filed in the county where the affidavit says you lived when you signed, or where you live when it was filed. (For a business, it may be filed where the business “resides,” which can be where it has a place of business.) It can be filed up to three years after you signed, so be sure to check the date on yours.

6. Your bank statements

This will really be helpful for looking into any irregularities with the withdrawals that were coming out of the accounts. You want to look at what sort of debits or charges were coming out and see if the case on the papers reflects what was actually going on. You want to figure out how much was actually debited, because those debit amounts can be critical in figuring out if you have a usury defense, or any type of defense, especially as your debits may not match the claim amount.

7. The disclosure from the offer

It is important to always get clear on the terms of the agreement, and the disclosure on your offer should generally lay those terms out. In New York, sales-based financing providers have to give a disclosure when the offer is made, which will show things like the total repayment amount, the estimated APR, the estimated term of the agreement, and the estimated amount of payments, so you can compare to what’s in the papers.

8. Every notice and court order

It is really important to keep track of every piece of paper you receive in this case, especially ones that come from the court or your opponent. You want to keep them together and know where you stand with the court throughout the lawsuit. Make sure to include copies of any notices and demand letters. But those notices aren’t proof that the balance or amount on hold is correct. Sometimes there is also notice to third-party “customers” or “account debtors” who owe money to your business and are holding the money. Make sure you identify what document caused the bank to put the hold on your funds, since different holds require different responses. If a default judgment was already entered, in New York you can make a motion to vacate for excusable default within one year after you were served with the judgment and written notice of its entry.

Bring Your Whole File into an Attorney

Bring your whole file into an attorney quickly, and be careful not to delay your court filing just because you are trying to reach a deal with the funder, since these deadlines can be tough. Also, don’t make any changes to your bank accounts, like closing accounts or moving money, without talking with an attorney first.

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.