5 Scenarios Where an MCA Company Can Put a Lien on Your Home

If you’re reading this, you’re probably worried about one thing: can the MCA company come after your house. Short answer: yes, in specific situations, they absolutely can. And most business owners don’t find out until it’s already happening.

Let’s be clear about something first. An MCA, on its own, is not a mortgage. The funder didn’t lend against your home. They bought future receivables from your business. That’s the whole legal fiction that makes the MCA industry work. But that doesn’t mean your house is safe, it just means the funder needs a few extra steps to get there. The steps are not hard, and aggressive funders take them every single day.

Here are the 5 scenarios where an MCA company can put a lien on your home.

1. You signed a personal guarantee, and they got a judgment against you

This is the most common path, by far. Almost every MCA agreement has a personal guarantee buried in it. Most business owners sign it without reading, because they needed the money yesterday, and the broker told them it was “standard.” It’s not standard in the sense that it’s harmless. It’s standard in the sense that every funder wants one.

Here’s how it plays out. You default. The funder sues the business, and you personally, under the guarantee. They get a judgment. In New York, and many other states, a judgment becomes a lien on any real property you own in that county, automatically, the moment it’s docketed. You don’t get a warning. You don’t get a separate filing. The judgment itself is the lien.

If your name is on the deed, the lien is on the house. Period.

2. You signed a confession of judgment, and they skipped straight to enforcement

A COJ is a document where you agree, in advance, that if you default, the funder can walk into court and get a judgment without suing you, without notice, without giving you a chance to defend yourself. New York banned COJs against out-of-state defendants in 2019, but a lot of funders moved to other states, and a lot of old COJs are still out there. Some funders, still use them in other jurisdictions.

The danger with a COJ is speed. A regular lawsuit takes months, sometimes longer. A COJ takes days. One morning you’re behind on payments, by that afternoon there’s a judgment docketed against you, and a lien attached to your home. You find out when the title company calls, or when you try to refinance, or when your spouse opens the mail.

3. The funder pierced the corporate veil

Most business owners assume the LLC protects them. It usually does. But if you commingled funds, used the business account to pay personal expenses, didn’t keep corporate formalities, or the funder can argue the business was your alter ego – they can ask the court to pierce the veil. If they win, the business’s debt becomes your debt, personally. And once it’s your personal debt, we’re back to scenario 1, judgment, lien, house.

This happens more than people think, especially with small operators who ran the business out of their personal checking account, for years, without realizing what they were doing. The funder’s attorney will subpoena your bank records, and if the commingling is obvious, the veil is gone.

4. You committed fraud in the application, or in the agreement

If the funder can show you lied on the application(fake bank statements, misstated revenue, inflated deposits, hidden existing MCAs), they have a fraud claim. Fraud is not just a breach of contract. Fraud gets you punitive damages, attorneys fees, and in many states, it survives bankruptcy. It also opens the door to personal liability even without a personal guarantee, because fraud is always personal. You can’t hide behind the LLC for fraud.

Once they have a fraud judgment, the lien attaches the same way any other judgment does. And fraud judgments are much harder to settle, because the funder knows you can’t discharge it in bankruptcy, they have all the leverage.

5. You transferred the house to a spouse, family member, or trust, after you were already in trouble

This one catches people, who thought they were being smart. You see the default coming. You quit-claim the house to your wife, or your brother, or a trust, thinking if it’s not in your name, they can’t touch it. Under fraudulent conveyance law (also called fraudulent transfer, or voidable transaction law depending on the state), if you transferred the property to avoid a creditor, and the creditor can prove it, the court will unwind the transfer. The house comes back into your name, and the lien attaches.

The lookback period varies, usually 4 to 6 years, sometimes longer. Funders know this play, they see it constantly. The first thing their collection attorney does is pull the deed history. If there’s a transfer after the MCA was signed, for no money, to a family member, that’s a red flag the size of a billboard.