Urgent Help Needed ! Defaulting on merchant cash advance

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Latest post 10-27-2010 10:23 AM by superman1. 4 replies.
  • 10-25-2010 2:48 AM

    • Mike2016
      Consumer
    • Not Ranked
    • Joined on 10-25-2010
    • CA
    • Posts 12

    Urgent Help Needed ! Defaulting on merchant cash advance

    Hello,

    I am in desperate help on some advices. I started an online business in 2004, ever since 2007 the business went down hill, and I took out a merchant cash advance in 2009, but it didn't help besides rolling the debt bigger and bigger. The business had incurred over $150k in losses over the years. I have lost everything. 

    I just went default about a week ago, the MCA company is looking after me now, they call me non stop all day, but i never answered their call. They even called my landlord asking if I am still in business. I received a fax from their attorney stating they will take legal action against me if I don't respond.

    The balance of the contract is $40k. In the merchant cash advance contract, it states I will be held liable if the company fails to pay.

    I have a feeling that these MCA companies are run by mafias or gangsters, they left very rude voicemails, threatening me that they will put me out of business if "this is the game I want to play"

    Any one has experience with these companies? What kind of people are they? 

    They seem to be small companies so i think they will do everything they can to collect, unlike bigger banks which send their cases to 3rd party collection agencies. 

    Can these debts be discharged in Ch.7 ? I just consulted with a local bankruptcy lawyer and he said it's not a problem. 

    If these guys act fast, what's the shortest possible time that they can get a judgement on me and levy my assets? 

    I have nothing but debts, i have no property or assets, not even much money in the bank. 

  • 10-25-2010 4:02 AM In reply to

    Re: Urgent Help Needed ! Defaulting on merchant cash advance

    Mike2016:
    I have a feeling that these [name redacted] companies are run by mafias or gangsters, they left very rude voicemails, threatening me that they will put me out of business if "this is the game I want to play"

    I am not familar with the company in question. But I caution you to be careful in asserting things like they are "run by ... gangsters." You might add defamation claims to your troubles if it turns out the statements are not true. Also, this site asks in the terms of service that you not mention the names of third parties, in part because of this problem.

    Creditors tend to use tough language to get the attention of the debtor when the debtor is not paying up. Threatening to "put you out of business" may mean nothing more than getting a judgment, grabbing all your business assets, and leaving the business unable to function, thus shutting it down. It doesn't necessarily mean the creditor plans to come over and destroy the business or break knee caps.

    Mike2016:
    Can these debts be discharged in Ch.7 ? I just consulted with a local bankruptcy lawyer and he said it's not a problem. 

    That depends on the details of the loan and other circumstances. Assuming, though, that you did not incur the debt by fraud, the debt is probably dischargeable.

    Mike2016:
    If these guys act fast, what's the shortest possible time that they can get a judgement on me and levy my assets? 

    Probably about 2 months or so if you don't respond to the lawsuit. If you respond to the lawsuit, you can drag that out a bit.

    Mike2016:
    I have nothing but debts, i have no property or assets, not even much money in the bank. 

    Well then, there isn't much the lender can get from you now even if it has a judgment, is there? In that case, it is not so urgent to run out and file bankruptcy immediately. I do suggest, though, that you see a bankruptcy lawyer soon to see what your options are so you can start planning how you are going to deal with this.

  • 10-25-2010 9:33 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on 03-30-2000
    • PA
    • Posts 49,303

    Re: Urgent Help Needed ! Defaulting on merchant cash advance

    One can file for bankrupcy pretty fast too--and it stonewalls all or nearly all other collection efforts once you file and put creditors on notice.

    If only your corporation is one the hook for the debt--so be it--and be careful NOT to get your personal name on the debt now.

    Now some folks suggest that one not throw good money after bad if one intends to file (thats probably a good suggestion) others suggest that one literally go on a spending spree prior to filing (thats a dangerous suggestion!)



  • 10-27-2010 3:16 AM In reply to

    • Mike2016
      Consumer
    • Not Ranked
    • Joined on 10-25-2010
    • CA
    • Posts 12

    Re: Urgent Help Needed ! Defaulting on merchant cash advance

    I personal guaranteed the contract, it's not really a loan, it's more like a purchase of future sales contract. They purchase X amount of my future sales for Y amount of money. 

    I am basically dead broke after giving I had into the company, I tried very hard to keep it alive but the more I do the deeper the hole I dig into. 

    There isn't anything the lender/creditor/collec... agt can take from me, but I really don't want them to harass my family. They are now calling my house at 6AM in the morning. 

    Can they come to my house to take my stuff away? like TV, furniture... not really anything worth alot of money but i just want to avoid the harassment.&n...

  • 10-27-2010 10:23 AM In reply to

    Re: Urgent Help Needed ! Defaulting on merchant cash advance

    It sounds like you should talk to a lawyer about bankruptcy.

    I don't see how someone can just break into your home and start packing up whatever of your things they think are valuable, simply because you owe them money.  That would be taking the law into their own hands. 

     

     

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