Why MCA Lawsuits Are Filed in New York
Almost every MCA contract designates New York as the exclusive venue. MCA funders are overwhelmingly based near NYC, and New York courts are familiar with MCA litigation. You need a New York attorney or one licensed in New York who handles MCA cases.
The Timeline
- Service of process. You are served with a summons and complaint.
- Answer deadline. 20 days after personal service, or 30 days after service by mail. Missing this results in a default judgment.
- Discovery. Both sides exchange documents and information.
- Motion practice. Your attorney files motions to dismiss or the funder seeks summary judgment.
- Trial or settlement. Most cases settle. Litigation creates leverage for negotiation.
Defenses Available in New York
Usury and recharacterization. New York caps civil usury at 16 percent and criminal usury at 25 percent. Most MCAs far exceed these limits.
Unconscionability. Courts can void egregiously one-sided terms.
Fraud in the inducement. Misrepresentations about terms or cost.
Failure to reconcile. If the funder refused reconciliation, this may constitute breach.
Immediate Steps
- Do not ignore the lawsuit.
- Contact a New York MCA attorney within 48 hours.
- Gather all MCA documents and bank statements.
- Do not communicate directly with the funder without your attorney.