MCA Defense in Los Angeles
Top MCA Defense Firms Serving Los Angeles - 2026
New York procedure and rules matter because they are often selected by the contract. Lawyers who do not have specific MCA experience often do not even see a problem or know a way around it.
Once you have missed an MCA payment, the lender often makes ACH reattempts, a demand letter and retains counsel within a few weeks. This is followed by a lawsuit, confession of judgment or arbitration within 2 to 6 weeks. The judgment then allows for a bank restraint and levy which can freeze and seize funds.
Defenses and Counterclaims
Defenses in an MCA include arguments that the funder ignored the reconciliation clause and that the agreement was really a loan. Courts rule on whether it is a loan on a case by case basis, weighing various factors, especially whether the contract provided for reconciliation, a finite term and recourse. Other defenses include usury and procedural defects like improper service. Often the case ends in a negotiated settlement. In a few cases bankruptcy is a better solution.
Stacked MCAs where each funder is debiting the same account can put your business finances into a tailspin. If the later funders knew you were overextended, that can support defenses and counterclaims. It can matter if a broker misled you to get you to sign.
Many merchant cash advance agreements require arbitration. These proceedings are often faster, but less transparent. If you do not prevail, the funder asks the court to confirm the award as a judgment. One tactic to derail the process is to challenge the arbitration clause itself. Under New York law, the motion to vacate an arbitration award generally needs to be made within 90 days after the award is delivered.
A nearly universal term in a merchant cash advance is the personal guaranty, which puts your personal accounts and property on the line if there is a default on the payments. The lender also files a lien under the UCC claiming all the business receivables and often other business assets. This can block getting other financing to pay off the MCA. After a pay off, the lender generally must file a termination statement within 20 days of a proper demand. Incorrect UCC statements can be challenged.
California changed its rules as of January 1, 2023, and judgments by confession are now unenforceable in superior court. If yours was entered before that date, the change does not matter, and the judgment is still valid. A New York judgment brought into California lets you move to vacate it within 30 days after the notice of entry was served on you.
Since October 1, 2023, state regulation bans unfair, deceptive or abusive practices by commercial financing providers including MCA funders. You can file a complaint at dfpi.ca.gov/submit-a-complaint. Another law, signed in September, will bring commercial financing, including MCAs, under the California Financing Law on January 1, 2028, but does not reach contracts currently in effect.
To find a lawyer, begin with the State Bar of California’s free online Attorney Search. It shows whether the attorney’s license is active and lists any disciplinary history. If you want to look more deeply, look for a lawyer who is a certified specialist, who needs five years in practice, 25 percent of work in the specialty, and a passed exam.
The Los Angeles County Bar Association runs the SmartLaw Lawyer Referral Service. The referral itself is no charge. The first consultation of up to 20 minutes is free. After that the lawyers charge their normal fees. It is a matching service, not pro bono work.
In interviewing MCA defense lawyers, ask how many cases like yours they had in the last 12 months. Ask whether they have dealt with New York confessions of judgment. Ask about their approach to withdrawal disputes, and arbitrations or litigation. Ask where they are licensed, and whether they keep local counsel ready for where you live. Ask what they do, and how fast, if a bank restraint or levy is served.
A good merchant cash advance lawyer knows confession of judgment procedure, ACH practices, UCC Article 9 filings and MCA contract terms without pulling out their notes. They can review your documents within a few days. After the first meeting they should give you something in writing about what is next, and a realistic assessment.
MCA lawyer fees vary with the complexity and the amount at stake. Some lawyers price a document review and a motion to vacate for a flat fee, others bill by the hour. Ask them if they expect a retainer. In California, the Business and Professions Code, section 6148, requires written agreement on fees in non-contingency cases where the client is likely to pay over $1,000 total cost. The rule does not apply when the client is a corporation.
Before calling, pull together your MCA agreement, ACH authorizations and the last 90 days of bank statements. Do not put your signature on anything new while you are looking for a lawyer. Do not ignore papers from court; a default judgment is far harder to undo. Do not try to stop ACH withdrawals or close a business account alone. Keep a record of all emails and texts.
Some actions make it worse. Sovereign citizen arguments get dismissed every time. Internet form letters carry no weight. Telling the bank unauthorized payments were made when they were not invites liability. Moving assets away or into a new business entity raises fraudulent transfer claims and personal liability.
Once you have a lawyer, communications with the MCA funder go through counsel. Before then, be cautious, agree to no new terms, and document every call. Filing bankruptcy generally triggers an automatic stay halting most collection activity, but a business filing does not necessarily resolve the owner’s personal liability under the guaranty.