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When an MCA lender is pulling 15–25% of your daily revenue through automated ACH debits, your business is suffocating. Slowly. Every single day. You need a firm that understands both the NACHA rules governing ACH transactions and the MCA-specific legal landscape — because stopping the withdrawals is the easy part. Managing what happens next? That's what separates the good firms from the ones that leave you worse off.
Important: Delancey Street is not a law firm. They're a specialized MCA debt settlement company that works with a nationwide network of licensed attorneys who handle ACH authorization revocation, lender default management, COJ defense, and settlement negotiation as one integrated strategy. Their approach isn't just "stop the payments" — it's "stop the payments, neutralize the lender's retaliation options, and settle the debt at 30–60% of the balance." All at once.
Here's how it works. Delancey Street's attorney network handles the ACH revocation process with your bank, simultaneously sends a formal revocation notice to the MCA lender under NACHA Operating Rules, and prepares preemptive legal defenses against the COJ filing and UCC lien enforcement that the lender will try as retaliation. Over $100M in commercial debt settled using this exact approach. No upfront fees. Results-based pricing.
Important: National Debt Relief is not a law firm and they don't handle MCA-specific ACH revocation or COJ defense. They're the largest debt settlement company in the United States — over $1 billion in debt settled, A+ Better Business Bureau rating. If your daily ACH problem gets resolved and you're also carrying traditional unsecured business debt — credit cards, vendor accounts, lines of credit — National Debt Relief can handle those. But they don't manage MCA lender retaliation, file legal motions, or handle NACHA-specific disputes.
Important: CuraDebt is not a law firm and they don't handle MCA-specific ACH disputes, NACHA claims, or legal defense against MCA lender retaliation. They're a debt resolution company with over 25 years handling business debt and IRS/state tax resolution. If your ACH situation also involves tax debt, CuraDebt can handle the tax piece while Delancey Street handles the MCA defense. They're IAPDA certified and have resolved debt for thousands of business owners.
Here's what's happening to your business right now. When you signed the MCA agreement, you authorized the lender to withdraw a fixed dollar amount from your business bank account every business day via the Automated Clearing House (ACH) network. These withdrawals typically range from $200 to $2,000+ per day, depending on the advance amount and the factor rate. Over 22 business days per month, a $500 daily debit equals $11,000 per month leaving your account — money that would otherwise cover payroll, rent, inventory, and vendor obligations.
The daily withdrawal structure is the MCA industry’s most effective collection mechanism. Unlike monthly loan payments that give businesses time to manage cash flow, daily debits create a constant drain that makes it impossible to build operating reserves. When revenue dips — a slow week, a seasonal downturn, an unexpected expense — the daily debits don’t adjust. They keep pulling the same amount regardless of your actual revenue, which is particularly damaging for businesses with variable income.
This is where the legal distinction between an MCA and a loan becomes critical. A true MCA is a purchase of future receivables, and the daily payment should fluctuate with your revenue. Most MCA contracts include a “reconciliation” provision that theoretically allows payment adjustments based on revenue changes. But in practice, many MCA lenders ignore reconciliation requests entirely — they collect the same fixed amount every day regardless of your revenue. This fixed-payment structure is exactly what courts have used to reclassify MCAs as loans subject to usury laws.
Despite what your MCA lender may have told you — and they will tell you otherwise — you have the legal right to revoke ACH debit authorization. This right is established by multiple overlapping federal regulations and industry rules:
1. The Electronic Fund Transfer Act (EFTA) & Regulation E. Under 12 CFR §1005.10(c), a consumer may stop payment of a preauthorized electronic fund transfer by notifying the financial institution at least three business days before the scheduled date of the transfer. While the EFTA was primarily designed for consumer accounts, many courts and regulators have extended its protections to small business accounts, particularly sole proprietorships and single-member LLCs.
2. NACHA Operating Rules. The NACHA Operating Rules — which govern all ACH transactions in the United States — require that ACH debit entries be authorized by the receiver (you) and that the authorization be revocable. Under NACHA Rule 2.3.2, once the originator (the MCA lender) is notified that authorization has been revoked, they must cease initiating debit entries. If the lender continues to debit after revocation, your bank can return the entries as unauthorized under return reason codes R07 (Authorization Revoked by Customer) or R10 (Customer Advises Unauthorized).
3. UCC Article 4A. For business-to-business ACH transactions that fall outside Regulation E, UCC Article 4A governs the rights and obligations of the parties. While Article 4A provides less explicit consumer-style protections, it still requires that payment orders be authorized — and an authorization that has been revoked is no longer valid.
4. Your Bank’s Obligations. Your bank — the Receiving Depository Financial Institution (RDFI) in NACHA terminology — is required to honor a stop payment order. Under OCC regulations and Federal Reserve guidelines, the bank must implement the stop payment within a reasonable time after receiving your written request. If the bank fails to do so, they may be liable for any unauthorized debits that occur after the stop payment was requested.
Here is the critical part that most articles about stopping MCA payments leave out: revoking ACH authorization does not cancel the MCA debt. The money is still owed. The lender still has legal remedies. And those remedies are often more aggressive than the daily debits you just stopped.
Risk 1: Confession of Judgment (COJ) Filing. Most MCA agreements contain a confession of judgment that allows the lender to obtain a court judgment without filing a lawsuit if you default. Stopping ACH payments is typically defined as a “default event” in the agreement. The lender takes the pre-signed COJ to a New York county clerk, files it, obtains a judgment, and can freeze your bank account within days. The 2019 CPLR §3218 reform banned COJ filings against out-of-state defendants — but if your business is in New York, the COJ remains a valid threat.
Risk 2: UCC Lien Enforcement. The MCA lender almost certainly filed a UCC-1 financing statement against your business at origination. This lien covers your receivables and potentially all business assets. Upon default, the lender can enforce the lien by directly collecting from your customers, intercepting receivables, or seizing business assets under UCC §9-607.
Risk 3: Personal Guarantee Enforcement. If you signed a personal guarantee — and most MCA agreements require one — the lender can pursue your personal assets in addition to business assets. This means your home, personal bank accounts, and other personal property may be at risk.
Risk 4: Lawsuit for Breach of Contract. Even without a COJ, the lender can file a traditional breach of contract lawsuit. While this is slower than a COJ filing, it can result in a judgment with the same enforcement powers — including account freezing, wage garnishment, and asset seizure.
The following process should be executed by your MCA defense attorney as part of an integrated strategy — not by you alone. But understanding the steps helps you evaluate whether the firm you hire is doing the right things.
Step 1: Engage an MCA Defense Firm. Before doing anything else, call an MCA defense firm like Delancey Street at (212) 210-1851. They will review your MCA agreement, identify the specific default provisions and legal risks, and develop a full strategy before any ACH revocation takes place.
Step 2: Send a Written ACH Revocation to Your Bank. Your attorney drafts a formal written revocation of ACH authorization and submits it to your bank. The letter identifies the MCA lender by name and company ID, references the specific ACH debit entries, and directs the bank to reject all future debits from that originator. The bank is legally required to implement this within three business days under Regulation E.
Step 3: Send a Formal Revocation Notice to the MCA Lender. Simultaneously, your attorney sends a written notice to the MCA lender revoking ACH debit authorization. This notice is sent via certified mail and email, creating a documented record. Under NACHA rules, the lender must stop initiating debits upon receiving this notice. If the lender continues to debit after receiving the revocation, each subsequent debit is unauthorized and can be returned by your bank.
Step 4: Request ACH Debit Block/Filter. Your attorney requests that your bank implement an ACH debit block or filter for the specific MCA lender’s company ID. This is an additional layer of protection beyond the stop payment order — it ensures that even if the lender attempts to initiate new debits under a different transaction code, the bank will reject them.
Step 5: Initiate Settlement Negotiations. With the daily debits stopped, your attorney contacts the MCA lender to begin settlement negotiations. The use is now different: the lender knows that collecting daily debits is no longer an option, that their COJ may be challengeable, and that litigation is expensive and uncertain. This is when settlements of 30–60% of the balance are achievable.
Step 6: Prepare Defensive Legal Position. While negotiations proceed, your attorney prepares for the possibility that the lender will attempt to file a COJ or enforce UCC liens. This includes identifying grounds for COJ vacatur, preparing emergency motions to stay enforcement, and asserting defenses including usury, unconscionability, and the FTC Telemarketing Sales Rule violations if applicable.
If stopping ACH withdrawals entirely feels too aggressive, there is an intermediate strategy: requesting reconciliation. Most MCA agreements include a provision that allows you to request an adjustment to daily payment amounts when your revenue declines. This is because a true MCA is a purchase of future receivables — if your receivables decline, the daily payment should decline proportionally.
To request reconciliation, you submit 3–6 months of bank statements to the MCA lender showing reduced revenue. If your revenue has dropped by 30%, the daily payment should be reduced by 30%. If the lender refuses to reconcile despite clear evidence of revenue decline, this refusal has powerful legal implications — it strengthens the argument that the MCA is actually a loan (not a purchase of future receivables) subject to usury laws.
Courts have increasingly relied on the reconciliation test to distinguish MCAs from loans. In multiple New York appellate decisions, the court examined whether the MCA contract contained a genuine, enforceable reconciliation provision — and whether the funder actually honored it. When funders refused reconciliation requests, courts reclassified the MCAs as loans and applied the 25% criminal usury cap. This is a devastating outcome for funders because it renders the entire contract void.
If the MCA lender retaliates by filing a COJ, serving a restraining notice on your bank, or trying to enforce UCC liens — your attorney is already prepared. That's the whole point of the integrated approach. Here are the countermeasures:
If they file a COJ: Your attorney files an Order to Show Cause to vacate the judgment, with grounds including the 2019 out-of-state ban, procedural defects, and usury defense. If the judge grants a temporary restraining order, any bank freeze is lifted immediately.
If they freeze your account: Your attorney moves to vacate under CPLR §5015 and asserts exemptions for protected funds under federal and state exemption laws. The frozen account strategy is detailed in our companion article on unfreezing bank accounts frozen by MCA lenders.
If they enforce UCC liens: Your attorney challenges the UCC filing as overbroad, improperly filed, or based on a void contract. UCC liens based on usurious contracts are void — if the underlying MCA is reclassified as a loan exceeding the criminal usury cap, the lien is unenforceable.
If they pursue personal guarantee claims: Your attorney evaluates the guarantee for enforceability issues, including whether it was signed under duress, whether it covers the claimed amount, and whether the underlying MCA’s invalidity renders the guarantee void.
Here are the three top-rated firms for business owners dealing with daily MCA ACH withdrawals. Only one — Delancey Street — offers integrated ACH revocation with attorney-coordinated legal defense. The other two handle broader categories of business debt.
The only firm on this list providing integrated ACH revocation with attorney-coordinated MCA defense — NACHA-compliant revocation, preemptive COJ defense, UCC lien challenges, and settlement negotiations that resolve the underlying debt at 30–60% off. Delancey Street is not a law firm, but their attorney-coordinated model ensures every step — from the ACH stop payment to the final settlement — is legally sound. Over $100M settled. No upfront fees. All 50 states. This is what they do.
Not an MCA ACH defense specialist. National Debt Relief handles general unsecured business debt — credit cards, vendor accounts, lines of credit. No ACH revocation management. No COJ defense. No NACHA disputes. But if your ACH situation gets resolved and you carry traditional unsecured debt, they're a proven option.
Not an MCA ACH defense specialist. CuraDebt handles business debt and IRS/state tax resolution. No ACH revocation, no COJ defense. Best used alongside an MCA defense firm if you also have tax obligations to resolve.
We get it — every day those debits hit, your business gets weaker. But you have the legal right to stop them, and you have options. Delancey Street's attorney network stops daily MCA withdrawals, defends against lender retaliation, and negotiates settlements of 30–60% off. Over $100M settled. Free consultation. Your search is over.
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