Close my business account to stop a mca merchant cash advance? If you are considering it, it is usually the worst way to get out of a merchant cash advance.
Some companies such as debt settlement companies recommend doing so as part of their settlement process. Don’t close your account. Choose an alternative below now.
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FAQ frequently asked questions on closing a checking account to stop an mca cash advance payment
Is there a better option than closing my business checking account to stop an mca daily payment?
Working with the advance company to negotiate a repayment if you can is better than closing the account.
Closing your account may be your last option to consider when you cannot negotiate a repayment you can handle.
Can I close my business checking account to stop a cash advance daily debit?
Closing your account is not allowed and is considered an intentional default in most cases.
It is better to contact the mca cash advance company and try to work out a solution.
What happens when I close my account to stop a cash advance daily payment? Can I be sued?
It will likely be considered an intentional default. The cash advance company may take legal action against you and your business through a lawsuit filed in state court in the county your business is located in.
The following is what many debt settlement companies tell customers to do.
- Sign a contract with the debt settlement company. The contract often allows the debt settlement company to represent your business in communications with lenders and mca merchant cash advance companies sometime after your have missed mca payments.
- Pay the debt settlement company to start the process.
- Close your business checking account per the instructions or advice of the debt settlement company
- Allow the debt settlement company to continue to represent you in settlement talks.
There are several problems and possible severe consequences to closing your business checking account to stop paying cash advances or loans and signing a contract with a debt settlement company.
- The lender can also consider this an intentional default or fraud.
- The lender or mca company can file a certificate of judgement and may also be able to debit funds in other accounts you may have at the same bank or other banks
- You may not be able to talk to the lenders or cash advance companies directly any more even if you want to. Language in the contract may not allow you to talk contact the funder directly
- You may not have influence over the final settlement agreement.
The contract you sign take power and decisions out of your hands and puts much of it in the hands of the debt settlement companies.
Other options and alternatives to contracting with debt settlement companies and closing your business checking account
- Contact the lenders directly and try to discuss your financial situation and reach an agreement with the lenders yourself.
- Payoff the merchant cash advances with other loans if the balances are low enough
- Discuss your financial situation with a business attorney
- Filing bankruptcy
The advantage of some of these options in general is that they either show you are sincerely trying to work with your lenders to settle your debt, are forming a coherent strategy to do so, or have officially determined that you cannot pay. These also have advantages over closing your account.