Can an MCA Company Sue Me?
Yes. A funder can sue the business for breaking the contract, and it can sue you personally if you signed a guarantee that the breach triggers. Lawsuits usually follow a default like blocked debits or moved deposits, not a proper reconciliation request after sales fell. If you're served, the papers set a short deadline to respond, so read them the day they arrive and call a lawyer.
What does the funder ask the court for?
- The unpaid balance of the purchased amount.
- Default fees the contract lists.
- Legal fees, if the contract says you pay them.
- Court costs and, after judgment, interest set by law.
What does this look like with real numbers?
Say $22,000 is left, the contract adds a $2,500 default fee and makes you pay the funder's legal fees. If those run $4,000, the claim is $28,500 before court costs. Answering on time and asking about a settlement or a payment plan can keep a default judgment from adding more.
Where does the case get filed?
The contract's venue clause picks the court. Virginia requires that suits on these contracts against Virginia businesses be brought in Virginia courts. This is general information, not legal advice. For your contract and your state, talk to a business lawyer.
What should you do if you've been served?
Write down the date you were served and the court's deadline to answer. Missing it can mean a default judgment for the full claim plus fees. Gather the contract, every payment record, any reconciliation requests and the funder's replies. Those papers show whether a real default happened or whether sales simply fell, which matters in court. Many funders settle once a lawyer is involved, often for a payment plan over a few months.
Does ignoring the lawsuit make it go away?
No. If you don't answer by the deadline on the summons, the court can enter a default judgment for the full amount the funder claims, plus the fees the contract allows. A default judgment is far harder to undo than a case you answered on time, so get the papers to a lawyer the week they arrive.
What should you ask the funder?
- Is my guarantee a performance or payment guarantee?
- What does the contract say about legal fees and venue?
- Will you accept a reconciliation or a payment plan instead of suing?
- What's the exact balance today?
Where can you check your own numbers?
The short version is in the Legal FAQ. To check the numbers on your own advance, use the MCA payment calculator.
Want a second look at your advance?
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.