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What happens if I stop paying my merchant cash advance?
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If you stop paying a merchant cash advance, the funder will typically first attempt to re-debit your account, then declare the agreement in default. Because a merchant cash advance is a business debt and not a criminal matter, you cannot be arrested — but the funder can sue your business (and you personally if you signed a personal guarantee), pursue a court judgment, and afterward move to freeze business bank accounts or place liens. The earlier you act, the more options you have to settle before a judgment is entered.
There's a window before a judgment — that's your leverage
Most merchants don't realize there is a window between missing payments and a funder obtaining a judgment where the debt can still be negotiated down. Once a judgment exists, the funder gains far more leverage — bank restraints and levies become available. Acting inside that window is where settlements get cheapest.
What actually escalates, step by step
The usual sequence is: failed debit → default notice → collection calls → lawsuit → judgment → bank restraint or lien. Each stage hardens the funder's position. The blunt moves (closing your account, going silent) tend to accelerate it; a planned response — reconciliation, a settlement offer, or revoking ACH as part of a strategy — keeps options open.