Welcome to Delancey Street. If you're reading this, you probably just got served — or you're worried you're about to be. And you want to know if a merchant cash advance company can actually come after your home.

Let's break down how this actually happens.

How an MCA Default Leads to a Lien on Your Home

Here's what most business owners get wrong: they think an MCA is a business debt, it stays with the business. That's not how this works. Not even close.

When you signed that MCA agreement, you almost certainly signed a personal guarantee. That personal guarantee is the bridge between your business obligation and your personal assets — including your house. The moment you default, the lender doesn't just have a claim against your business. They have a claim against you.

And they will use it.

The Path From Default to Property Lien

This doesn't happen overnight. But it happens faster than you think. Here's the typical sequence:

  • You default on the MCA. Could be a blocked ACH, could be NSF returns, could be stacking (taking on a second MCA without disclosure). Doesn't matter which trigger — the result is the same. The full balance gets accelerated.
  • The lender files a lawsuit. Most MCA agreements include a confession of judgment clause, or at minimum, a venue selection clause that lets the lender sue in a jurisdiction that's favorable to them (usually New York). In confession of judgment states, they don't even need to notify you before getting a judgment. You wake up one morning and it's already done.
  • The lender gets a judgment against you personally. Because of the personal guarantee, this judgment isn't just against your LLC or your corp. It's against you, individually. Your name. Your Social Security number.
  • The judgment gets domesticated in your state. If the lender sued in New York but you live in Texas, they'll take that New York judgment and register it in your home state. This is called domestication, and it's routine.
  • The lender files a judgment lien against your property. Once they have a domesticated judgment, they record it with your county clerk. That lien attaches to your home, your investment property, any real estate you own in that county.

That's five steps. In practice, this can happen in as little as 30 to 60 days from the date of default — especially if there's a confession of judgment involved.

Can They Actually Force a Sale of Your Home?

This is the question that terrifies people. And the answer is: it depends on your state.

Some states have strong homestead exemptions that protect your primary residence from forced sale by a judgment creditor. Florida, Texas, and Kansas have some of the strongest protections in the country. If you live in one of those states, the lender can put a lien on your house, but they probably can't force you to sell it.

But here's what most people miss — even in strong homestead states, the lien still attaches. It sits there. And the moment you try to sell or refinance, that lien gets paid first (out of your equity) before you see a dollar.

In states with weak or no homestead protections? The lender can petition the court to force a sale. It's rare. But it's legal. And MCA lenders who are owed six figures have done it.

What About Your LLC? Doesn't That Protect You?

No. And this is the biggest misconception business owners have about MCA debt.

Your LLC protects you from tort liability and certain business debts. It does not protect you from a debt you personally guaranteed. The personal guarantee bypasses the corporate veil entirely — you agreed to be personally liable. The LLC is irrelevant once that guarantee is in play.

Some business owners think dissolving the LLC or filing a new one will make the debt go away. It won't. The guarantee follows you, not the entity.

Confession of Judgment: The Fast Track to a Lien

If your MCA agreement includes a confession of judgment (sometimes called a "COJ" or "cognovit note"), the timeline compresses dramatically. Here's why:

A confession of judgment is a clause you signed that allows the lender to obtain a judgment against you without filing a traditional lawsuit. No hearing. No notice. No chance to defend yourself before the judgment is entered.

The lender's attorney walks into court with your signed COJ, the clerk enters the judgment, and now the lender has a legally enforceable claim against you and your assets. From there, the property lien is one filing away.

New York banned confessions of judgment for out-of-state borrowers in 2019. But many MCA agreements still include them for in-state borrowers, and some lenders have found workarounds. If you signed an MCA before 2019, there's a good chance your agreement has one.

What You Can Do Right Now

If you're in default, or about to be, and you're worried about your home — here's what you need to know:

  • Don't ignore the lawsuit. If you've been served, you have a limited window to respond. Missing that window means a default judgment (which is different from an MCA default — this is a court default), and that's the fastest path to a lien on your property.
  • Check your agreement for a confession of judgment clause. If it's there, assume the lender is already moving. Speed matters.
  • Talk to an attorney who understands MCA debt. Not a general business attorney. Not your cousin who does real estate closings. Someone who deals with merchant cash advance defaults specifically. The legal landscape here is narrow and aggressive, and the wrong advice costs you your house.
  • Don't transfer your property. Some business owners try to deed their house to a spouse or a family member. This is a fraudulent conveyance, and judges see through it immediately. It makes your situation worse, not better.
  • Understand your state's homestead exemption. This is the single biggest variable in whether the lien on your house is a nuisance or a catastrophe.

The Bottom Line

Can an MCA default put a lien on your house? Yes. The personal guarantee you signed made sure of that. The lien itself is almost a certainty once there's a judgment. The real question is whether the lender can force a sale — and that depends on where you live, how much equity you have, and whether you respond to the lawsuit or let it go to default.

If you're behind on MCA payments, or you've already defaulted, don't sit on this. The enforcement timeline is measured in days, not months. The lenders are aggressive because the agreements let them be. And once a lien is recorded against your property, unwinding it is exponentially harder than preventing it.

At Delancey Street, we negotiate directly with MCA lenders before it gets to the judgment stage. That's the window. Once a judgment is entered and a lien is filed, your leverage shrinks dramatically.