Chicago MCA Defense
Top MCA Defense Firms Serving Chicago - 2026
When it comes to MCA cases, you want an attorney who understands how MCAs work and who has experience as an MCA attorney. Some lawyers have no experience in collections law whatsoever, let alone any knowledge of MCAs. In general, the better lawyer for your business is the one who understands MCAs and their collections tactics. Your attorney must be experienced enough with MCA cases to be able to tell you honestly whether your MCA case is worth litigating.
One MCA collections tactic is the confession of judgment, which is when you agree in advance to a judgment against yourself if you default on your obligations under a contract. Often this will happen without notice or any lawsuit. Confessions of judgment are still viable in Illinois, though not enforceable for consumer deals (such as consumer loans). There is some protection available, in that New York has barred confessions of judgment against out-of-state businesses since 2019.
In Illinois, if you are hit with a judgment by confession, you can challenge it with a motion to open it. With that motion, however, you must include two other documents: an affidavit (in which you swear under oath) and your proposed verified answer (in which you either admit or deny the allegations against you). In practice, the lawyer must know Illinois Supreme Court Rule 276.
Confessions of judgment are just one tool in the MCA collections toolbox. You also need an attorney who has experience handling other MCA collections methods, including lawsuits and arbitration claims, bank levies and restraints, UCC liens, guaranty collections, and settlement negotiations.
New York law and New York courts are often picked in the standard MCA agreement. As a result, even a Chicago company can wind up being sued in New York. Be very clear with your lawyer about whether they can and will handle a New York MCA case.
An MCA lender or company generally cannot restrain or levy your bank account(s) without first winning a judgment against you. If you received a summons and complaint or a request for arbitration and did nothing, however, the other side can win a default judgment against you (called a “judgment by default”). With a judgment in the funder’s hands, its lawyer can start collections and potentially freeze your bank account or those of guarantors.
A UCC-1 lien (filed under Article 9 of the Uniform Commercial Code) is often put on a company’s assets, whether accounts receivable, inventory, equipment, or the whole business. The mere existence of a UCC lien can be enough to stop other lenders from funding you. With a paid off lien, the MCA lender generally must file a termination of the UCC within 20 days of demand.
Your lawyer needs to ask a simple question in MCA cases: Is the agreement a loan or not? Courts look at three main factors in deciding whether the advance is a loan:
- (1) Are repayments reconciled to the merchant’s gross or net revenue?
- (2) Is the advance paid off in a finite number of payments?
- (3) Is there recourse for non-payment?
This matters because some states have usury laws that limit interest to a maximum percentage. Every case is different, however, and these factors may vary. Your lawyer needs to assess the totality of the evidence to tell you whether the MCA appears to be a loan and how it can affect your defenses.
To find a lawyer, you can get referrals from the Chicago Bar Association Lawyer Referral Service at (312) 554-2001, or online at chicagobar.org. You can speak to more than one lawyer.
You can check an attorney’s standing with the bar before you hire them. The ARDC, or Attorney Registration and Disciplinary Commission, issues a “Lawyer Search” that you can use to check a Chicago lawyer’s current licensing status, whether the lawyer has a disciplinary record, where the attorney’s office is, and whether they report malpractice insurance. In Chicago and in Illinois, an ARDC complaint stays private. If there is public discipline, the details are typically posted on the ARDC website.
You need to know how much experience the lawyer has, but you also need to know how much relevant experience the lawyer has. You should also ask how many similar cases they’ve worked on in the past twelve months, and ask whether the lawyer is familiar with MCA-related topics such as the difference between an MCA and a loan, using arbitration clauses, and confessions of judgment. Make sure you find out how fast the lawyer can act for you if you have a bank restraint served on you.
Fees vary depending on the market and how complex your business issue is. Some lawyers bill a flat or fixed fee and others an hourly fee. In Illinois, nonrefundable retainers are banned by Illinois Rule of Professional Conduct 1.5. Contingent fees have to be in a written agreement signed by you in Illinois.
In the meantime, gather all your MCA agreements, ACH authorizations, ninety days of bank statements, and all texts and letters involving the funder. Do not sign anything new. But don’t just unilaterally stop payments, close your bank account, or report the ACHs as fraudulent; this can lead to breaches of the contract and of your guaranties. You also don’t want to transfer your assets or sell your business, open another company to hold your assets, or do anything that could prompt the MCA to argue that you have acted fraudulently.
When you file bankruptcy, you automatically get a stay that stops most collections. The cap for Subchapter V bankruptcy, however, is just $3,424,000 in debt. Ask your attorney for more details about how the bankruptcy automatic stay will affect your situation.
Illinois does not yet have a disclosure law for MCAs, though there was a bill that would have required APR disclosures and registration (it failed). Your business’s best protection is likely to be in the attorney you hire and a contract that makes sense for you.