Sued by Caymus Funding INC? 7 Steps to Take in the First 20 Days

If Caymus Funding has sued you, the plain answer is: don’t ignore the summons, don’t call the Plaintiff, and call a lawyer who can help. Failing to respond to the lawsuit can lead the court to enter a “default judgment,” which will permit the lender to take any number of steps to collect the debt. Whether this is the first time you’ve ever been sued or you’re familiar with the process, you will want to follow these 7 steps if you want to get to the other side with minimal financial and reputational damage.

1. Find your real deadline

A good place to look for your answer deadline is the summons, which typically outlines the timeframe you have to file your appearance or answer. If you’ve been served by a person in a New York state court, you must respond to the lawsuit within 20 days after service of process. If served another way, you have an additional 10 days to respond. In federal court, the summons specifies a deadline that is generally 21 days out from the date the summons was served. You must respond to the lawsuit to preserve your right to defend it in court, so this is the single most important deadline.

2. Check who is suing

It is critically important that you determine precisely who filed suit against you. Lawsuits can be assigned or transferred from one creditor or plaintiff to another - and another - a fact that can make these claims hard to verify.

As for Caymus Funding itself, it reportedly filed for bankruptcy in January 2025 in Georgia. The case is a Chapter 7 liquidation with a trustee, though the case remains open. This development may have consequences for the company’s ability to manage its collection efforts.

3. Don’t call their lawyer

It’s natural to reach out to the lawyers on the pleadings to get answers to the many questions you have, but that would be a big mistake. They are not representing you and will not provide advice to you. You could inadvertently share information with the Plaintiff’s attorney that could negatively impact your personal case.

4. Get an answer filed

Once you’ve discovered who the Plaintiff is, you have to answer the complaint and affirmatively raise any defenses you might have. You might decide to prepare and file a response yourself, as the answer is a fact-based document. But unless and until you have consulted with a lawyer about this critical step, it would be wise to refrain.

Hiring a lawyer with MCA defense experience is critical because the MCA poses unique issues not presented in traditional collection lawsuits. MCA lawyers can help make sure your answer preserves as many defenses as possible, such as usury (where the MCA is a disguised loan), fraudulent inducement, unconscionability, funder breach, and lack of standing.

5. Gather your paperwork

Whether you made payments on the advance for months or defaulted promptly, there is no doubt this is a document intensive claim. To prepare for litigation, whether or not you plan to file a countersuit, it is wise to collect all of the paperwork that is remotely related to this transaction, including bank statements, correspondence, and payment confirmations. The MCA, bank, and ACH records will help guide your defense. Use a lawyer’s guidance to organize these documents, but be prepared to invest time in the exercise as well.

ACH records also matter. Over time many business owners find that the daily fixed debit kept going even as sales fell, and the funder refused to reconcile. This is a strong sign the MCA is really a loan.

6. Protect your bank account

If a judgment gets entered, you run the risk that your bank accounts can be frozen. Judgment creditors do have some rights to freeze your personal and business accounts, but not all of the protections are lost, and a lawyer can help you take the right steps to maintain your access to your funds as litigation ensues.

A restraining notice can be served on your bank. When that happens, your bank account freezes immediately. Some places allow this before a judgment is entered. A lawyer can move to have the freeze lifted and to claim certain exemptions.

Daily ACH debits to the funder can sometimes be stopped by steps at the bank. One option is to revoke the bank authorization directly at your own bank, though this is technical and can go wrong. Other options include reversing unauthorized debits if any and using a court injunction in some jurisdictions. Discuss each of these approaches with your attorney.

7. Weigh settlement and bankruptcy

A majority of MCA disputes settle before trial. Settling for 30% to 60% of the outstanding balance is a common outcome. If your defenses are strong, that percentage may come down. Making a solid decision about settlement is only possible once you have a good sense of the funder’s financial position, how aggressively they will litigate, and the value of your defenses. You can offer to settle by paying a lump sum amount or proposing a payment plan.

When all else fails, bankruptcy may remain an option. The automatic stay is one of the strongest debtor protections and halts nearly all collection. That said, bankruptcy can harm future financing options. Your own lawyer can help you weigh bankruptcy for your circumstances and make a decision that works.

If you’ve already missed the deadline, don’t panic. Even default judgments can often be vacated. The rules are different everywhere, but in New York, you may have one year from notice of entry of the judgment to bring a motion to set aside a default judgment based on a reasonable excuse for your failure to appear or answer. But the faster you act, the better.

The only thing worse than being sued by a lender is ignoring the lawsuit. These 7 steps can help you decide how to manage the case and, ideally, take back control of your finances.

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.