Can an MCA Default Put a Lien on Your House?

When you signed that MCA agreement, you almost certainly signed a personal guarantee. Every major MCA funder requires one. This means you, personally, are on the hook for the full purchased amount if the business can't pay. Not the LLC. Not the corporation. You.

And here's what most business owners miss — the personal guarantee doesn't just make you liable. It gives the lender a path to your personal assets. Your house included.

The sequence works like this:

You default on the MCA

The lender accelerates the full balance (this happens within days, not weeks)

They file a lawsuit against you personally, under the guarantee

They get a judgment

That judgment becomes a lien on your real property — including your home

That's not theoretical. That's the standard playbook. And it happens faster than you think.

Once the MCA lender gets a judgment against you, they don't need your permission to attach it to your property. In most states, a money judgment automatically becomes a lien on any real estate you own in that county, the moment it's docketed. In New York, they file with the county clerk. In New Jersey, they file with the Superior Court. Either way, your house now has a lien on it.

What does that mean practically? It means you can't sell the house, you can't refinance the house, without satisfying that judgment first. The lien sits there. It accrues interest. And the lender knows eventually you'll need to do something with that property, and when you do, they get paid.

Some lenders won't even wait for the sale. They'll move to enforce the judgment — meaning they'll attempt to force a sale, or garnish other assets. Whether they succeed depends on your state's homestead exemption laws, but the lien itself? That's almost automatic.

This is the contrarian beat that needs to die. Your LLC does not protect your house from an MCA judgment. Not when you signed a personal guarantee. The LLC protects you from liabilities of the business that you didn't personally guarantee. The moment you put your name, your social security number, on that guarantee, the corporate veil is irrelevant. The lender is coming after you, individually, and your LLC can't stop them.

And here's the part nobody talks about — even if you didn't sign a personal guarantee (which is rare, almost unheard of in the MCA world), some funders will still try to pierce the corporate veil. If you commingled funds, used business accounts for personal expenses, or didn't maintain corporate formalities, a court can hold you personally liable anyway. The LLC was never the shield you thought it was.

Every state has some version of a homestead exemption, which protects a portion of your home's equity from creditors. But here's the problem — they vary wildly, and most of them aren't as protective as people assume.

Florida and Texas have unlimited homestead exemptions. If you live there, your primary residence is largely protected. Largely. Not completely.

New York — the exemption ranges from $179,975 to $399,975 depending on the county. If your house is worth more than that (and in the tristate, it almost certainly is), the excess equity is exposed.

New Jersey — there is no homestead exemption. None. Your house is fully exposed to judgment liens.

California — the exemption ranges from $300,000 to $600,000 depending on the county median home price. Better than most states, but still not bulletproof.

So yes, there are protections. But they're limited, they're state-specific, and they don't prevent the lien from being placed. They only limit what the creditor can collect if they try to force a sale.

If your MCA was signed before 2019, or if it was signed outside of New York, there may be a confession of judgment (COJ) in the agreement. This is the nuclear option. A COJ lets the lender skip the lawsuit entirely and go straight to judgment. No trial, no hearing, no opportunity to defend yourself. They walk into a clerk's office, file the COJ, and the judgment is entered. Lien on your house, that day.

New York banned the use of out-of-state COJs against New York residents in 2019. But if you're in another state, or if the COJ was filed before the ban, you might already have a judgment you don't even know about. This happens more than people realize.

If you're in default, or close to it, the worst thing you can do is nothing. The lien doesn't happen because you defaulted. It happens because you defaulted, did nothing, and let the lender control the timeline.

Here's what actually helps:

Check your county clerk's office for any filed judgments or liens you don't know about. Do this today, not next week.

Review your MCA agreement — look for the personal guarantee clause, the confession of judgment clause, and the default definition. Know what you signed.

Talk to an attorney who understands MCA defense before the lender files. Once a judgment is entered, your options shrink dramatically. Before that, you have leverage. After, you're negotiating from a position of weakness.

Don't ignore the calls. The collections team is aggressive by design, but silence doesn't protect you. It accelerates their timeline.

The MCA industry moves fast, and the enforcement mechanisms are designed to punish people who wait. Your house isn't automatically at risk the moment you miss a payment. But the path from missed payment to lien on your property is shorter than you think, and every day you don't act is a day the lender is acting for you.