Sued by Go Torro: 7 Things That Happen Next

It’s the nightmare of the American small business owner. After hours and hours of sleepless worry, you’re now in the midst of litigation - brought against your business, and possibly against you personally, by a merchant cash advance funder like Go Torro.

An MCA lawsuit can be a business killer. It starts with a court filing by the funder against your business, then serving you with papers, after which a clock starts to run. That clock is a deadline to answer the lawsuit. Ignore it and the funder may then get a default judgment against your business. A judgment can then be enforced against business bank accounts and even against a guarantor personally. Make the deadline and you keep your options open.

1. The papers arrive

Papers can arrive via mail or courier. Either way, take the paperwork seriously. Even if it looks routine and just a bit scary, it may have a major impact on your business if it is ignored. Make sure to set aside every single page you got and write down who delivered them and the date. You are often served personally along with the business.

2. The clock starts

The clock for a merchant cash advance lawsuit starts after the complaint is served on you. The exact day varies based on local rules. In Utah, for example, an Answer is due 21 days after the complaint is served if you were served in Utah, or 30 days if you were served outside Utah. Talking to a funder’s collections department to work out a payment plan does not extend this time frame. A business lawyer can help figure out the exact day you need to respond.

3. Missing the deadline

Go Torro can ask the court for a default judgment, which is an order against the party who did not respond. And while it is possible to ask the court to set aside a default judgment, you must act fast. A Utah Rule 60(c) motion to undo a judgment for mistake, surprise or excusable neglect must be made within a reasonable time, never more than 90 days after judgment. Whether a default judgment can be reopened depends on the court, your reasons for missing the deadline, and how fast you act. If you already have a default judgment or a bank restraint, get the paperwork to a lawyer immediately; don’t wait on payment discussions.

4. What they claim

The MCA funder’s complaint will probably say you breached the contract. Their allegation in that complaint is not automatically true. It will also say that you owe the funder a certain amount. That too is just the allegation. So now it’s time to pull out your receipts and your bank records. See whether every payment to the MCA funder you made got credited to your account. Pay attention to the timing of any debits - when they say one was made might be wrong. Line these up against what you were supposed to have paid in the agreement and amendments. Note anything that looks like a double payment and any time you questioned, disputed or returned a debit. Make a list of all the advances you have open, including the advance you’re being sued on, and note how much you’ve paid back on each one and what’s left to be paid. If you had sales shortfalls, find the reconciliation provision in your MCA agreement.

If you signed a confession of judgment, the MCA funder may try to use that instead of a regular lawsuit. It doesn’t work everywhere. Some states don’t allow them at all. Who signed it? Was the business the signatory? Was a guarantor?

5. Your personal guarantee

A personal guarantee can put you, the business owner, on the hook too. Who is liable, and for what, depends on the terms of the guarantee. Not every personal guarantee says the same things, so make sure to read the guarantee and pull out the one you signed, if any. Getting a demand from the funder is not the same as getting a judgment from the court.

6. The judgment gets enforced

If Go Torro gets a judgment, it can hit up a third party who owes you money. This is called a writ of garnishment in Utah, and it reaches wages, bank accounts or other non-exempt money anyone else owes you. The Federal Wage Limit is the lesser of 25% of weekly disposable earnings, or the amount that’s above 30 times the federal minimum wage.

In Utah, for example, a judgment recorded with the County Recorder creates a lien on any real property you own in that county. This means that the judgment must generally be paid before you can sell or refinance your home. A Utah judgment entered in 2026 comes with 5.51% interest unless the contract says something different. The judgment then lasts eight years, and can be renewed by a motion filed before it ends.

Did your payment processor, supplier or customer just get a letter telling them to pay Go Torro, not you? UCC letters from the funder asking your customers or payments processor to pay the funder are not quite the same as a court order or a judgment. A court order like a restraint or a levy generally follows a judgment, and can cause a freeze or hold of your bank accounts. Know which one it is that is causing your business money to get held.

7. Your next moves

While a case is still pending, hold off on switching bank accounts, redirecting receipts or moving assets until a lawyer weighs in. Don’t sign a new deal under pressure. When you settle, you give something up in return for some sort of concession on the other side. In an MCA case, that could mean a lower amount to pay, or a payment plan. All of this should be done in writing and with careful attention to the MCA contract to make sure you are settling the whole dispute and not just pieces of it.

A new round of financing or refinancing may pay off old MCA debt. Not every new round actually pays off the original MCAs, and not every new deal gets rid of existing daily payments. Don’t take it on faith. If there is new financing, compare total cost and new guarantee terms.

In bankruptcy, an automatic stay stops most lawsuits and collections against the person who filed. This might be the way forward if the debts can’t be paid. A business bankruptcy does not automatically wipe out your personal guarantee.

Chapter 7 bankruptcy is often a liquidation. A Chapter 11 is often for a reorganization. Chapter 13 is for some sole proprietors but not corporations, so you will need to show a lawyer the exact structure of your business before filing. Before filing bankruptcy, ask a lawyer what that will mean for your operations, your collateral and any personal guarantees you signed. There’s no rule that says you can’t talk to a lawyer until all your negotiations have failed.

Procrastination can be fatal. So if you have a lawsuit from Go Torro or another MCA funder, make it a priority to get your bank statements and other records out. Make a point of setting them aside and keeping them together. Don’t try to manage this problem on your own. Seek good legal advice and don’t be reluctant to get a couple of legal opinions if you want to.

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.