What an MCA Funder Can and Can't Take
9 Assets From Most Exposed to Best Protected

No honest asset review begins by declaring the owner's property available to an MCA funder.

Exposure turns on the obligor, the rights the creditor holds, and the protection attached to the particular asset, with the governing law supplying conditions that a collection demand may omit. The nine categories below form an inventory for review rather than a strict ranking, since the same asset can present different questions when held by the business, owned by a guarantor, or subject to another party's interest.

1. Business Bank Accounts

An operating account requires examination of its owner, any payment authorization, and the legal basis for a restriction. No new instruction to the bank, even casually, should precede that examination. An authorized debit differs from a bank response to judgment enforcement process.

New York CPLR 5222 illustrates a restraining notice framework with conditions governing debtor property and debts held by others. A freeze does not establish that every dollar belongs to the judgment debtor or is available for payment, and an LLC should not assume that procedures designed for a natural person exempt account apply to its operating funds.

2. Personal and Joint Accounts

The creditor must hold a basis for pursuing the individual or the property at issue. Rarely does a restraint notice receive the calm reading it requires. A company balance statement does not establish a personal judgment. That confusion is peculiar to collection practice.

Retain the notice packet with evidence showing the source of deposits. A bank restraint looks extremely final. Do not treat it as proof that an objection has already failed. The account is restrained. The money is not yet taken.

3. Wages From Employment

Federal garnishment limits in 15 U.S.C. Section 1673 restrict ordinary wage garnishment through disposable earnings and minimum wage calculations, with specified exceptions, so that garnishment cannot exceed the lesser of 25 percent of disposable earnings for a workweek or the amount above thirty times the federal minimum hourly wage. State protections and enforcement requirements need a separate examination that this article cannot supply for every jurisdiction, though the federal floor applies across them.

A new employer does not become the payment agent of the funder because a caller requests deductions. Business receipts and an employee paycheck belong in different columns of the ledger.

4. Inventory on the Premises

Stock on the premises may belong to the business, may be held for someone else, or may carry a security interest. Preserve purchase records and agreements establishing the arrangement before assuming that possession resolves ownership. This decides nothing about ownership.

New York UCC 9-609 provides specified secured party remedies after default, including possession through judicial process or without judicial process when there is no breach of the peace. An extremely forceful demand to remove goods does not establish those elements. Demands are drafted in order to suggest rights broader than the documents support. (Whether a particular demand crosses into breach of the peace is a question I cannot answer from this desk.)

5. Equipment and Vehicles

Equipment requires the title or purchase record, the financing documents, and any lease. A machine essential to operations can still be collateral, while the presence of another lender requires analysis of the competing interests. Counsel should review and analyze any filing against the agreement and the identified property rather than treating a filing alone as proof of every question of validity, perfection, or priority.

The reconciliation clause functions the way a smoke detector functions in a building already condemned: technically present, operationally meaningless. That sentence belongs in the middle of this article rather than the close, because the larger principle is that paper protections fail first where cash flow has already failed. Avoid promising the same sale proceeds to different creditors before those interests have been examined.

6. Receivables and Sale Proceeds

New York UCC Section 9-315 addresses continuation of a security interest after disposition and interests in identifiable proceeds, subject to conditions and exceptions. Moving a payment to another account does not resolve the asserted interest by itself.

Distinguish completed work, disputed invoices, and customer deposits carrying a performance obligation. The face value of the receivables ledger may overstate what the business can collect and retain, and a proposed sale should address creditor consent where required with the destination of proceeds. The settlement budget should rest on a supportable estimate of receipts rather than the largest number on the page.

7. The Home

The deed, the existing encumbrances, and the applicable homestead protection matter alongside personal liability. A property estimated sale price does not identify the nonexempt equity of the owner or establish what a particular creditor can obtain.

New York CPLR 5206 addresses specified property owned and occupied as a principal residence, with geographically differentiated amounts and exceptions, and its treatment of surplus value means that an exemption is not a universal bar on proceedings involving the property. Resist the urge to refinance or transfer title because a collection message describes the home as available, since a voluntary transaction can change the household position before anyone has assessed the original exposure. The applicable amount and conditions should be verified for the relevant date and jurisdiction.

8. Retirement Benefits and Insurance Interests

These assets need separate documents and legal analysis. 29 U.S.C. Section 1056(d) provides protection against assignment or alienation for covered pension plan benefits, with exceptions.

That rule should not be extended without analysis to every IRA, insurance policy, or distribution after it reaches a bank.

Obtain advice before liquidating the asset.

9. Property Offered to Fund a Settlement

A creditor's ability to enforce against an asset differs from your decision to contribute its value. Delancey Street can assess MCA settlement options, while independent counsel works to protect and preserve the exemptions before any disposition. Delancey Street is a settlement company rather than a law firm.

Ask the provider to ensure that the proposal uses funds you can supply on the stated dates. Counsel should ensure that the release addresses the parties, the collateral, and the process relevant to the agreement. The negotiation needs an accurate inventory before it needs an ambitious opening figure, and the ledger should be closed only when the documents establish what belongs in the calculation. Steps you take, or do not take, in the first days after a restraint determine what counsel can still protect. Simply bring the inventory, the ledger, and the account notices to the first discussion. Most owners discover the distinction between exposure and collection too late. I understand why.