Best Companies to Help When You Defaulted on an MCA and the Funder Is Coming After Your Co-Signer — 2026

Top Companies to Protect Your Co-Signer from MCA Collections — 2026

When an MCA funder goes after your co-signer, it becomes personal in every sense of the word. Your business partner, family member, or spouse is facing frozen bank accounts, property liens, and judgment enforcement — all because they signed a personal guaranty to help your business. The firms below are ranked by one thing: their ability to handle co-signer defense situations, including guaranty challenges, COJ vacatur, and settlement negotiations that protect everyone involved.

How MCA Funders Pursue Co-Signers and Personal Guarantors

The personal guaranty is the most powerful tool in the MCA funder’s arsenal — and they know exactly how to use it. Here is how the process works and why it is so dangerous for your co-signer.

The Personal Guaranty. When you took the MCA, the funder almost certainly required a personal guaranty from one or more individuals — the business owner, a business partner, or a spouse. The guaranty makes these individuals personally liable for the full MCA balance if the business defaults. Most MCA guaranties are “unconditional” and “absolute” — the funder does not need to exhaust remedies against the business before going after the guarantor directly.

The Guarantor’s COJ. On top of the business’s confession of judgment, MCA funders typically require each guarantor to sign a separate COJ. This lets the funder obtain a personal judgment against the guarantor in a New York county court — often without notice — and then freeze the guarantor’s personal bank accounts, file liens on their personal property, and execute against their personal assets. It happens fast.

Joint and Several Liability. Under the standard MCA guaranty, each guarantor is jointly and severally liable for the entire balance. The funder will pursue one guarantor for 100% of the debt, even if other guarantors exist. They target the guarantor with the most accessible assets — the one with the largest bank balance or the most valuable real property. This creates devastating personal consequences for someone who thought they were just helping a family member or business partner secure working capital.

Legal Defenses for Co-Signers and Guarantors

Your co-signer is not defenseless — far from it. Experienced MCA defense attorneys have developed multiple strategies for protecting guarantors from MCA funder enforcement:

1. COJ Vacatur Under CPLR §3218. If the guarantor resides outside New York and the COJ was filed after August 2019, it is voidable under the 2019 amendment to CPLR §3218. This is a bright-line rule — no balancing test, no judicial discretion. If the facts fit, the judgment must be vacated. This defense applies to the guarantor’s personal COJ regardless of whether the business’s COJ is also challenged.

2. Usury Voids the Entire Transaction. If the MCA is reclassified as a loan because it features fixed daily payments with no genuine reconciliation provision, it becomes subject to New York’s usury laws. Under NY Gen. Oblig. Law §5-501, a loan with an interest rate exceeding 25% is criminally usurious and void ab initio. If the MCA is void, the personal guaranty based on it is also void — you cannot guarantee a void contract.

3. Guaranty Defenses. Traditional contract defenses apply to personal guaranties: lack of consideration (the guarantor received no direct benefit), duress (the guarantor was pressured to sign), unconscionability (the guaranty terms are so one-sided that enforcement would shock the conscience), fraud in the inducement (the funder or broker misrepresented what the guarantor was signing), and material modification (the funder changed the MCA terms after the guaranty was signed without the guarantor’s consent).

4. Improper Execution. COJs and guaranties require strict compliance with procedural requirements. If the guarantor’s signature was not properly notarized, if the COJ affidavit is defective, or if the guaranty document contains errors — these procedural defects provide grounds for vacatur. MCA funders process thousands of agreements through brokers, and execution errors are surprisingly common. This is where a sharp attorney earns their fee.

5. Exempt Assets. Even if the guaranty is enforceable, many of the guarantor’s assets are exempt from execution under state law. Homestead exemptions protect home equity, retirement accounts are generally exempt under ERISA and state law, and certain income streams are protected from garnishment. Your attorney asserts these exemptions to shield the guarantor’s most important assets.

Why the Settlement Must Include a Full Guarantor Release

Settling the MCA debt is the only way to permanently protect your co-signer. But the settlement must be structured correctly — and this is where most people get it wrong.

A proper MCA settlement agreement must include explicit language releasing all personal guarantors from all claims, obligations, and liabilities arising from the MCA. Without this language, the funder will accept a settlement payment from the business and then turn around and pursue the guarantor for the remaining balance — arguing that the guaranty is a separate obligation from the MCA itself. Delancey Street’s attorneys insist on guarantor releases in every settlement they negotiate. No exceptions.

The settlement must also address the guarantor’s COJ. If a judgment was entered against the guarantor, the settlement agreement must require the funder to file a satisfaction of judgment with the county clerk, removing the judgment lien from the guarantor’s personal property. Any restraining notices served on the guarantor’s bank accounts must be withdrawn. And any UCC-1 liens filed against the guarantor personally must be terminated. Every piece.

The FTC’s Telemarketing Sales Rule prohibits debt settlement companies from charging fees before delivering results. Any firm that charges upfront fees before settling the MCA and securing the guarantor release is violating federal regulations. Walk away from anyone who asks for money before doing the work.

Step-by-Step: What to Do When the Funder Goes After Your Co-Signer

1. Contact an MCA defense attorney immediately. Call (212) 210-1851 to speak with Delancey Street’s team. Time is critical — if the funder has already filed a COJ against your co-signer, enforcement actions can begin within days.

2. Determine what the co-signer signed. Gather the original MCA agreement, the personal guaranty, and any confession of judgment documents. Your attorney needs to see exactly what the co-signer agreed to — and identify any defects in execution, scope, or enforceability.

3. Check for COJ filings. Your attorney will search the New York court system for any judgments filed against the co-signer. If a judgment exists, the attorney can file an emergency Order to Show Cause to stay enforcement and vacate the judgment.

4. Assert asset exemptions. If the co-signer’s bank account has been frozen, your attorney can immediately assert exemptions for protected funds — including wages, Social Security benefits, veterans’ benefits, and other exempt income. Under New York’s Exempt Income Protection Act, at least $2,500 must remain accessible regardless of the judgment amount.

5. Do not let the co-signer negotiate alone. MCA funders will contact the co-signer directly and pressure them into making payments, entering into payment plans, or providing financial information that will be used against them. The co-signer must refer all contact from the funder to the attorney and not engage directly. This is critical.

Top Companies to Protect Your Co-Signer — 2026

Here are the three top-rated firms serving business owners whose co-signers are being pursued by MCA funders in 2026. Only one — Delancey Street — does attorney-coordinated guarantor defense, COJ vacatur, and settlement with full co-signer releases.