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What happens when a merchant cash advance company sues me?
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When a merchant cash advance funder sues, you are served with a summons and complaint and have a limited window (often 20–30 days, depending on the state) to respond. If you don't respond, the funder usually wins a default judgment automatically. Once they have a judgment, they can move to restrain your bank accounts, levy assets, and enforce against any personal guarantor. The period right after being sued — before a judgment — is the strongest moment to negotiate a settlement.
Never ignore the summons
Ignoring the lawsuit is the most damaging choice, because a default judgment hands the funder maximum leverage with no fight. Even if you can't pay, responding (or having someone respond for you) preserves your ability to negotiate and contest. A default is the worst of both worlds: you still owe it, and now they can collect aggressively.
Settling after a suit is filed
A filed lawsuit doesn't end the chance to settle — funders routinely accept reduced payoffs even after filing, because litigation and collection are expensive and uncertain for them too. The cost usually rises the closer you get to judgment, so moving quickly after being served tends to produce the best terms.