Restraining Notice: Meaning in a Merchant Cash Advance
A restraining notice is a legal notice, used in some states such as New York, that bars a bank or other party from transferring a judgment debtor's money or property. It can freeze a business's bank account after a judgment.
What does restraining notice mean?
In New York, a judgment creditor can serve a restraining notice on a bank holding the debtor's account. The bank then can't release funds beyond certain limits. It works like an immediate freeze while the creditor moves toward collecting the money.
Why does restraining notice matter to your business?
Many MCA contracts name New York law and New York courts, so New York collection tools show up in MCA disputes more often than you'd expect. A restraining notice on your account stops your ability to pay bills, just like a levy.
What are your options?
There are procedures to challenge a restraining notice or claim exemptions. An attorney licensed in New York can explain them.
Why does speed matter?
The freeze starts as soon as the bank receives the notice.
Do out-of-state businesses get these?
A restraining notice served under New York law on a bank with New York operations can reach accounts held by businesses located elsewhere, depending on the bank and the circumstances. Owners are sometimes surprised to find their account frozen by a process from a state they've never set foot in. An attorney can explain how it applies to you.
Where will you see it?
In notices from your bank, which is required to inform you, and in court papers in New York judgment enforcement.
Is this legal advice?
This is general information, not legal advice.
Which terms are related to restraining notice?
The full list is in the glossary. Owners ask about this in What should I do if I get a demand letter from an MCA funder?.
A term on your offer you don't recognize?
Send us the line and we'll tell you what it means. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.