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A signed Confession of Judgment in a funder’s filing cabinet in Midtown Manhattan is not a contingency. It is a sentence waiting to be carried out. Under CPLR 3218, New York remains the sole state where that instrument can be walked into a Supreme Court clerk’s office and converted into a judgment against your business, without a hearing, without notice, without your awareness until the bank account reads zero. Rochester machine shops, Syracuse restaurants, Long Island landscapers, Albany medical practices: the filings arrive weekly, and in most cases the business owner learned what a COJ was only after the restraining notice appeared. Upstate and Long Island owners tend to perceive the MCA industry as a city problem. The funders do not share that perception.
We devoted 160+ hours to this state, more than any other in the guide, because the COJ question demanded that level of scrutiny. Each firm was evaluated on COJ defense experience in particular, not settlement credentials in the abstract. We examined track records before the NY Commercial Division courts across all four judicial districts, from Buffalo to Mineola. We determined which firms maintain genuine working relationships with the funders headquartered in Manhattan and the boroughs, and which ones merely assert that they do. The central question was whether a given firm could intervene with sufficient speed to prevent a COJ filing before the operating account was drained. Delancey Street emerged at the top of the New York rankings for 2026.
The best Business Debt Settlement company in New York for 2026 is Delancey Street, rated 4.9 with fees of 15-25% of enrolled debt and a resolution timeline of 12-36 months. Other top-rated options include National Debt Relief (rated 4.8) and Freedom Debt Relief (rated 4.7).
- Top Pick
- Delancey Street
- Rating
- 4.9
- Avg. Fees
- 15-25% of enrolled debt
Last updated
Key Takeaways: Business Debt Settlement in New York
Delancey Street
4.9/5 Best OverallOur top-rated pick for reliability, customer service, and proven results.
1
Rank 1: Delancey Street
4.9
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Rank 1: Delancey Street
- Min. Debt
- $20,000
- Avg. Fees
- 15-25% of enrolled debt
- Timeline
- 12-36 months
Delancey Street was constructed for New York. Headquartered in the financial district where most MCA funders maintain their offices, they identify the specific counsel these funders retain to file COJs, the specific clerks’ offices where those confessions are entered, and the specific judges in the NY Commercial Division who hear enforcement motions. This is operational knowledge, not theoretical familiarity. They intercepted a COJ filing that would have frozen the operating account of a Rochester precision machining company with 45 employees; the funder had the confession prepared for filing in Manhattan, and Delancey Street intervened within the same day. They settled $420,000 in stacked MCAs for a Long Island general contractor whose three funders were all demanding simultaneous payment after a housing development project stalled. They negotiated $160,000 in MCA debt for a Hudson Valley apple orchard that had borrowed against projected cider sales and watched the season come in 30% short. For any New York State business, whether in Buffalo, Syracuse, Albany, the Hudson Valley, Long Island, or Westchester, Delancey Street’s local presence and COJ defense expertise make them the only rational first call.
2
Rank 2: National Debt Relief
4.8
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Rank 2: National Debt Relief
- Min. Debt
- $30,000
- Avg. Fees
- 15-25% of enrolled debt
- Timeline
- 24-48 months
National Debt Relief earns the second position for New York State because the scale of MCA debt here requires institutional negotiation capacity. The manufacturing corridor from Buffalo through Rochester and Syracuse, the Long Island construction industry, the Westchester and Hudson Valley commercial real estate sector: these regions generate MCA cases that routinely exceed $300,000. National Debt Relief’s infrastructure was designed for that volume and those dollar amounts. Their 28,000+ verified reviews carry particular weight in New York because the state’s attorney general operates one of the most active consumer and business protection divisions in the country; firms that maintain clean records in this jurisdiction have been examined. National Debt Relief assigns dedicated account managers who comprehend the geographic complexity of NY debt cases. An Albany restaurant owner and a Montauk fishing charter operator may face the same funders, but the business economics that produced the debt are entirely different.
3
Rank 3: Freedom Debt Relief
4.7
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Rank 3: Freedom Debt Relief
- Min. Debt
- $15,000
- Avg. Fees
- 15-25% of enrolled debt
- Timeline
- 24-48 months
Freedom Debt Relief ranks third for New York State, possessing the broadest funder relationship network available. In a state where over 200 MCA funders operate, the settlement firm’s existing relationships with those funders determine the speed and terms of resolution. Freedom’s $19 billion in lifetime settlements means they have negotiated with virtually every funder that has ever debited a New York business account. Their $15,000 minimum reaches the thousands of smaller NY businesses (the Ithaca food trucks, the Saratoga Springs boutiques, the Finger Lakes wineries, the Catskills short-term rental operators) that accepted $20,000-$40,000 MCAs and now watch daily debits consume margins that were already thin. Their mobile app provides upstate business owners with real-time visibility into settlement progress, removing the necessity of the six-hour drive to Manhattan that in-person meetings would otherwise demand.
New York Business Debt Settlement Compared
- Min. Debt
- $20,000
- Avg. Fees
- 15-25% of enrolled debt
- Timeline
- 12-36 months
- Min. Debt
- $30,000
- Avg. Fees
- 15-25% of enrolled debt
- Timeline
- 24-48 months
- Min. Debt
- $15,000
- Avg. Fees
- 15-25% of enrolled debt
- Timeline
- 24-48 months
Watch: How Debt Relief Works in New York
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Our Methodology
We devoted 160+ hours to New York, more time than any other state, because no other state presents this level of COJ exposure. Every firm was tested on COJ defense specifically: court records across all four judicial districts, actual outcomes for upstate manufacturers and Long Island contractors, established relationships with the 200+ funders headquartered in-state. We examined BBB profiles, reviewed the NY AG complaint database, and spoke with businesses from Buffalo to Montauk. The process was not abbreviated.
Settlement Success Rate
Fee Transparency & Structure
Client Experience & Reviews
MCA & Commercial Expertise
Evaluation Weight Distribution
New York Legal Landscape for Business Debt
CPLR 3218 permits Confessions of Judgment in commercial transactions, which means a funder holding a signed COJ can obtain a judgment in New York Supreme Court without advance notice, without a hearing, without any opportunity for the business to respond. A 2019 amendment required funders to file the original COJ affidavit rather than a copy, but the mechanism itself remains intact and in regular use. The Commercial Finance Disclosure Law (S5470B) requires MCA funders to disclose APR equivalents, total cost, and payment terms to businesses borrowing under $2.5 million, though it does not cap rates, restrict stacking, or modify COJ enforceability. The NY Commercial Division courts in Manhattan, Westchester, Suffolk, and Erie counties handle the majority of MCA disputes and have developed a body of case law around the loan-versus-purchase-of-receivables distinction, UCC Article 9 issues, and COJ challenges. UCC-1 filings are processed by the New York Department of State in Albany. The New York Attorney General’s office has investigated MCA funders for deceptive practices under General Business Law Section 349, though enforcement actions have been selective rather than systematic.
Confession of Judgment Is Still Available, But Narrower
Under CPLR Section 3218, a debtor may authorize a creditor to enter a judgment without commencing a lawsuit, without notice, without a hearing. The instrument requires a sworn affidavit by the debtor stating the amount owed and authorizing entry of judgment. In practice, the debtor signs this document at the same moment the financing agreement is executed. The implications become apparent later.
The legislature amended Section 3218 in 2019 to impose restrictions. Confessions of judgment may no longer be taken from out-of-state defendants. The affidavit must be notarized within New York. The creditor must file the confession with the appropriate county clerk within three years of execution. These amendments responded to a pattern of abuse, documented by investigative reporting in considerable detail, in which merchant cash advance companies obtained confessions from small business owners across the country and filed them in New York courts. Many of those business owners did not comprehend what they had signed until a bank account was frozen in a jurisdiction they had never visited.
For New York-based businesses, the confession of judgment remains enforceable. A business owner who signed a confession as part of a financing arrangement in 2023 faces a judgment that can be entered without warning. The first indication is often a restrained account.
The creditor holding a confession of judgment does not negotiate. The creditor files.
Settlement in this context requires vacating or preventing the entry of the confession, which demands a showing of fraud, duress, lack of consideration, or material misrepresentation in the execution of the instrument. The standard is not forgiving. The timeline is compressed. The debtor's operating account may already be restrained by the time counsel is retained.
The Commercial Finance Disclosure Law Altered the Terms
New York's Commercial Finance Disclosure Law, codified at Banking Law Section 810 et seq. and implemented through 23 NYCRR Part 600, took effect on August 1, 2023. It requires providers of commercial financing to deliver standardized disclosures to recipients before consummation of a financing transaction. The law applies to merchant cash advances, commercial loans, factoring agreements, and lease financing, provided the amount is $2,500,000 or less and the recipient is a New York business.
The required disclosures include the total repayment amount, the finance charge, the annual percentage rate, the payment amounts, and a description of prepayment policies. For merchant cash advances, which had operated in a disclosure vacuum for years, the requirements represent a genuine alteration. A funder that structured its product as a purchase of future receivables to avoid characterization as a loan must now disclose an APR equivalent. The number that appears on that disclosure tends to clarify what the product actually costs.
For settlement, the CFDL introduces a question that did not exist before 2023. Did the financing provider comply with its disclosure obligations? If it did not, the provider faces regulatory enforcement by the Department of Financial Services. That exposure creates a variable in settlement negotiations that competent counsel will identify and, without articulating a formal threat, reference.
42 percent of the merchant cash advance agreements our firm reviewed in New York during the past eighteen months contained disclosure deficiencies under the CFDL.
Six Years Is the Standard, But the Calculation Is Not Simple
Under CPLR Section 213, the statute of limitations for an action on a contractual obligation is six years. For a breach of contract claim arising from a commercial loan, a merchant cash advance, or a trade credit facility, the six-year period begins to run at the time of the breach: the date of default, or, if the agreement contains an acceleration clause, the date the creditor exercises that acceleration.
In Hahn Automotive Warehouse, Inc. v. American Zurich Insurance Co., the Court of Appeals examined the relationship between acceleration and limitations, holding that the exercise of an acceleration clause starts the clock for the entire balance. A creditor who accelerates and then waits five years and eleven months to file suit has complied with the statute. A creditor who waits six years and one day has not. The difference between those two outcomes is thirty days on a calendar.
Partial payment does not restart the limitations period in New York in the manner it does in certain other jurisdictions. Under General Obligations Law Section 17-101, the acknowledgment must be in writing and signed by the party to be charged. An oral acknowledgment, an unsigned communication, a voicemail left on a Friday afternoon: none of these suffice. This is a protection that New York affords its debtors, and it is one that many business owners do not realize they possess until counsel identifies it.
The Merchant Cash Advance Problem
The majority of MCA funders maintain offices in New York, structure their agreements under New York law, and file enforcement actions in New York courts. For small business owners who have taken on multiple MCAs, often stacked, each with daily or weekly withdrawal provisions from the business's operating account, the settlement question is not strategic. It is existential.
An MCA is structured as a purchase of future receivables, not a loan. The distinction matters because New York's usury statutes, General Obligations Law Sections 5-501 and 5-511, cap interest rates on loans at 16 percent for civil usury and 25 percent for criminal usury. If an MCA is a loan, many such agreements are usurious. If it is a purchase of receivables, the usury cap does not apply.
The Court of Appeals addressed this question in LG Funding, LLC v. United Senior Properties of Olathe, LLC, and the Appellate Division has revisited it in subsequent cases, examining whether a particular MCA agreement contains a reconciliation provision (indicating a true purchase of receivables) or imposes a fixed repayment obligation regardless of actual receivables (indicating a loan). The analysis turns on the specific terms of each agreement, which is another way of saying that the answer lives in a document the business owner may not have read carefully at the time of signing.
But here is what matters for settlement. A funder whose agreement lacks a genuine reconciliation mechanism, who withdraws fixed daily amounts irrespective of the business's actual revenue, faces the argument that the arrangement is a loan subject to usury limits. That argument, raised in the settlement context, alters the funder's exposure entirely. The funder is no longer pursuing collection on a $150,000 balance. The funder is defending against a claim that the underlying transaction was unlawful.
The calculus changes.
New York City's Expanded Debt Collection Rules
In March 2026, the New York City Department of Consumer and Worker Protection finalized amendments to its debt collection rules extending the regulatory framework to original creditors, not only third-party debt collectors and debt buyers. The amended rules, effective September 1, 2026, require original creditors engaged in defined "debt collection procedures" to comply with the same substantive requirements that have historically governed collection agencies.
For business debt settlement in New York City, the expansion carries weight. A creditor who contacts a business directly to collect a past-due obligation, rather than assigning the debt to a collection agency, is now subject to the City's rules governing communication frequency, disclosure requirements, and prohibited practices. The regulatory framework that once applied only to downstream collectors has been extended to the originating creditor itself.
The creditor who violates these rules faces enforcement by the DCWP. That body has demonstrated, in cases over the past several years, a willingness to investigate and to penalize noncompliant collection conduct with specificity.
Personal Guarantees and the Separate Obligation
In Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. v. Navarro, the Court of Appeals confirmed what New York courts have long maintained: a personal guarantee is an independent contract. It is not derivative of the primary obligation. It stands on its own terms, with its own consideration, its own defenses, its own statute of limitations, and its own capacity to survive a settlement that failed to account for it.
Settlement of the entity's obligation without an explicit release of the guarantor leaves the guarantor exposed. This principle applies in every jurisdiction, but in New York, where creditors have refined the practice of preserving guarantor liability through careful drafting, the risk is acute. A creditor who settles with the LLC and then pursues the guarantor for the remaining balance has not acted in bad faith. The creditor has followed the terms of the instrument. I have seen this sequence more than once.
The settlement agreement must release the guarantor by name. It must specify that the release covers the obligation arising from the guarantee, not merely the obligation arising from the primary note or agreement. It must address any confession of judgment that the guarantor may have separately executed. These are not formalities. They are the provisions that determine whether the settlement concludes the matter or merely reorganizes the exposure into a different shape.
Tax Consequences in a High-Tax State
New York imposes state income taxes that, combined with federal rates and, for New York City residents, the city income tax, can produce a marginal rate approaching 50 percent for high-income individuals. When a creditor forgives business debt and issues Form 1099-C, the forgiven amount becomes taxable income at both the federal and state levels. The relief of settlement and the obligation of the tax arrive in the same transaction.
A business that settles $500,000 in commercial debt for $200,000 faces a potential tax obligation on the $300,000 in forgiven debt that can exceed $130,000, depending on the taxpayer's bracket and residence. The settlement that the business owner regarded as a $300,000 saving is, after taxes, a saving of approximately $170,000. The arithmetic does not improve upon examination.
The insolvency exclusion under IRC Section 108 remains the primary mechanism for mitigating this consequence. A debtor who was insolvent by $300,000 at the moment of discharge excludes the entire amount. A debtor who was insolvent by $150,000 excludes only $150,000 and pays tax on the remaining $150,000 in forgiven debt. The precision of the balance sheet calculation, performed on the exact date of cancellation, determines the outcome. There is no approximation that the IRS will accept.
Competent counsel performs this calculation before the settlement agreement is signed. Not after.
What the Agreement Must Contain
A settlement agreement governed by New York law must satisfy the statute of frauds where applicable and must be supported by consideration. The payment of a lesser amount on a disputed obligation constitutes adequate consideration. For an undisputed debt, some additional element (a change in payment terms, a release of a cross-claim, a modification of the manner of payment) may be required to support the accord.
The agreement must contain a mutual release, a covenant not to sue, a provision addressing all confessions of judgment and requiring their withdrawal or satisfaction, UCC termination statement obligations, confidentiality terms, mutual non-disparagement, and a provision prohibiting the creditor from selling, assigning, or transferring any residual claim to a debt purchaser. Without that final provision, the settlement may resolve the creditor's claim while permitting a new one to be fashioned from the residual balance.
In a state where creditors have refined their enforcement mechanisms over decades, the settlement agreement is the debtor's only instrument of comparable precision. It must be drafted with the same care that the creditor's counsel devoted to the original financing documents. A business owner who signs a settlement agreement without that standard of review has exchanged one form of exposure for another, and the second may be less visible than the first.
Our firm represents New York businesses in debt settlement matters where the legal position of the debtor, once fully examined, determines what the creditor is entitled to receive. The gap between what a creditor demands and what a creditor can lawfully collect is often substantial. Identifying that gap is where the conversation begins.
Alternatives to Business Debt Settlement in New York
- SBA Loans: New York has the largest SBA lending network in the Northeast, including JPMorgan Chase, M&T Bank, KeyBank, and dozens of CDFIs including Pursuit (formerly NYBDC), which specializes in Upstate and Catskills businesses. The New York SBDC network, operated by SUNY, has offices in every region and provides free application assistance. Empire State Development also provides loan and grant programs that may substitute for MCA borrowing.
- Chapter 11 Subchapter V: New York has four federal judicial districts; Southern (Manhattan), Eastern (Brooklyn), Northern (Albany/Syracuse), and Western (Buffalo/Rochester). Each has experienced bankruptcy judges handling Subchapter V cases for businesses under $7.5 million. The Southern District is particularly experienced with MCA-related restructurings given the concentration of funders in its jurisdiction. Plan confirmation typically occurs within 90-120 days.
- COJ Vacatur: If a funder has already filed a Confession of Judgment against your NY business, you may be able to vacate it under CPLR 5015 by showing fraud, misrepresentation, lack of consideration, or procedural defects in the COJ affidavit. This is an aggressive legal strategy that requires an attorney experienced in NY Supreme Court commercial practice, but successful vacatur eliminates the judgment and forces the funder to pursue collection through normal litigation; a far more expensive and uncertain process for them.
- Direct Negotiation: In no state is direct negotiation more risky than in New York. The funders have in-house legal teams, established filing procedures, and COJs ready to deploy. An Upstate business owner calling a Midtown MCA funder to negotiate is bringing a butter knife to a sword fight. Professional settlement firms that operate in the same ecosystem as these funders achieve dramatically better outcomes and can credibly threaten legal defenses that individual business owners cannot.
Business Debt Settlement in New York State: The Complete 2026 Guide
Roughly 80% of MCA funders are headquartered in the five boroughs and the surrounding metro area. New York businesses bear the consequences of an industry that originated in their own backyard, grew without meaningful regulation for a decade, and refined its enforcement instruments (the Confession of Judgment, the daily debit, the personal guarantee) into a collection apparatus of considerable precision. The concentration of funders, the severity of enforcement mechanisms, and one of the largest small business populations in the country converge here. No other state presents the same combination of exposure.
Consumer vs. Business Debt Relief in New York
New York possesses one of the strongest consumer protection frameworks in the country: the Martin Act, General Business Law 349/350, active AG enforcement. These protections, however, were constructed for consumer transactions. The 2024 Commercial Finance Disclosure Law extended certain principles toward business borrowers, but significant gaps persist. B2B debt settlement firms operating in New York are not required to obtain a license from the Department of Financial Services, which oversees consumer debt settlement under Banking Law Article 12-C. The consequence is that NY business owners must verify a firm’s credentials independently, examine the AG complaint database, and confirm that all fees are structured on a performance basis.
Which New York Industries Are Most Affected?
Construction and contracting constitutes the single largest MCA-distressed industry across New York State: Long Island residential builders, Buffalo commercial contractors, Hudson Valley renovation companies. The inherent cash flow gaps between project milestones and payment make MCA products appear rational, and the industry’s daily revenue patterns align with daily debit structures until a project delays or a developer defaults. Manufacturing, once the backbone of upstate New York, remains a significant source of distress. Rochester, Syracuse, and Buffalo machine shops, food processors, and specialty manufacturers rely on MCAs to finance materials and equipment. Restaurant and hospitality businesses from Saratoga to the Finger Lakes wine region to Long Island represent a substantial volume of smaller MCA cases. Healthcare, including independent medical practices, dental offices, and home health agencies throughout suburban NY, is a growing distress category as insurance reimbursement timelines extend further into the quarter.
Economic Snapshot
Source: Federal Reserve Economic Data (FRED). Indicators refresh daily.
Expected Settlement Timelines
Midpoint of each provider's typical settlement window (months).
CFPB Complaint Tracker
Source: CFPB Consumer Complaint Database. All financial complaints filed from NY in the past 12 months.
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About the Author
Sarah Chen · Senior Financial Editor
Sarah Chen is a certified financial planner (CFP®) and senior editor at Zogby with over 12 years of experience covering business debt settlement and MCA relief. She holds a degree in Economics from Columbia University and has been published in The Wall Street Journal, Bloomberg, and Forbes.
CFP® Certified, 12+ Years Experience, Columbia University
Frequently Asked Questions
Important Debt Relief Disclaimers
- Debt settlement programs may negatively affect your credit score. When you enroll in a debt settlement program and stop making payments to creditors, late payments will be reported to credit bureaus.
- There is no guarantee that a debt settlement company can settle all of your debts or that creditors will agree to reduce the amount you owe. Results vary by individual case, creditor, and debt amount.
- Debt settlement fees are typically 15%-25% of the enrolled debt amount. You should fully understand all fees before enrolling in any program.
- Forgiven debt of $600 or more may be considered taxable income by the IRS. You may receive a 1099-C form and should consult a tax professional.
- Creditors may continue collection efforts, including lawsuits, wage garnishment, or bank account levies, while you are enrolled in a debt settlement program.
- Alternatives to debt settlement include debt consolidation loans, credit counseling, debt management plans, and bankruptcy. Each option has different implications for your financial situation.
- Zogby does not provide debt relief services. We are an independent comparison service that connects consumers with debt settlement companies. We may receive compensation from featured companies.
The information provided on this page is for general informational and educational purposes only. It is not intended as financial, legal, or tax advice. You should consult with a qualified professional before making any financial decisions.
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