Served with an MCA lawsuit: what the first 30 days decide

Find the answer deadline first, typically 20 to 30 days from service depending on the court, and calendar it in red. Then get MCA-experienced counsel reviewing the complaint; the venue is usually the one the contract chose (often New York), so experience in that forum matters more than a local address. Do not call the funder's lawyers to explain yourself; everything said becomes evidence.

MCA complaints are volume paperwork, and volume paperwork has defects. Common defense angles: recharacterization (the advance functioned as a usurious loan, no true reconciliation, fixed payments regardless of revenue), service defects, standing and assignment gaps when positions were sold between funders, damage calculations that ignore payments made, and conduct claims under newer statutes like New York's FAIR Act. Raising real defenses changes the settlement math even when the case never reaches trial.

File the answer on time, always, even mid-negotiation, because the deadline is leverage the funder is counting on you to miss. Protect operations in parallel: know your exposure to restraints and levies before they arrive, and manage which accounts hold operating cash. Then negotiate from the defended position: a funder facing a filed answer, real defenses, and a represented merchant reprices the case, litigation is now a cost center for them, not a shortcut.

Filed cases settle constantly, at discounts that reflect both sides' litigation costs. A complete post-filing settlement includes dismissal of the case with prejudice, mutual releases, UCC terminations, and if any judgment was entered, its satisfaction on the court record. Paying without those paper terms resolves nothing.