I already stopped paying. What happens now?

What happens first?

Most agreements treat a blocked or reversed debit as an event of default and accelerate the balance. From there, funder behavior varies widely, from a lawsuit or customer notices within days to weeks of nothing.

The steps that matter are acceleration, notices to your customers under Article 9, and enforcement against accounts. Not all of them happen, and they do not always happen in that order.

Did I lose my reconciliation rights?

Under agreements that condition reconciliation on not being in default, likely yes for that position. Check each agreement separately. Stacked merchants are often behind on some and current on others, and a live window on any position is worth acting on now.

Is a request I already made still worth something?

Yes. If you made a documented request before default and it was refused or ignored, that record survives and it is one of the more useful documents in the file. It goes directly to whether the reconciliation right functioned in practice.

Find it, save it, and note the dates.

Can they still take my money without suing me?

Yes. Under UCC 9-607 a secured party may notify your customers to pay it directly after default, without a lawsuit and without notice to you. A processor can also freeze under its own agreement.

This is why revenue frequently stops before any court papers arrive. What those letters are and what they do to the customer receiving one is covered at customer notices and UCC liens.

What happens to my other advances?

Where cross-default provisions apply, they can all accelerate. Those clauses treat a default under other financing as a default under this one, and defaults become visible to other funders through public filings.

Review every agreement you hold for that language. It determines whether you are managing one problem or all of them.

They are threatening a confession of judgment. Can they enter it?

If one exists and it satisfies CPLR 3218, that is what it is designed for. It permits entry of judgment without litigating, which is why entry can happen before you know anything is going on.

Whether it can properly be entered depends on the affidavit's contents, the amount authorized, whether it was filed within three years of execution, and whether it was filed in a county where you resided at execution or reside now. Find your copy and check the execution date, then see what CPLR 3218 actually requires.

Is my position hopeless now?

Not necessarily, and the honest answer requires reading your documents. Some merchants in this position have agreements with real defects, positions where enforcement was procedurally improper, or a debt profile that fits a reorganization.

Others are in a worse position than they believe, and that is also worth knowing, because it changes what deal is worth accepting. Either way the answer comes from the paper.

What should I do this week?

Gather every agreement, every guaranty, every court paper, and anything a customer, bank, or processor has sent you. Check each agreement for cross-default and reconciliation language, and check any confession of judgment for its execution date.

Then get someone to read them. The first conversation with us is free, and at this stage the decisions in front of you are worth considerably more than the time it takes to make the call.

Attorney Advertising. General information about legal process, not legal advice. Reading this page does not create an attorney-client relationship. Every matter depends on its own documents and facts. Settlement figures referenced are publicly published third-party claims, not results obtained by this firm. Prior results do not guarantee a similar outcome.

Last reviewed: August 19, 2026