What MCA debt relief costs, and how the fee structures differ

Ask three MCA relief companies what they charge and you will get three percentages, none of which are comparable, because each one is a percentage of something different.

This is an industry norms article. It describes how providers across the market structure fees so you can read a proposal properly. It is not a price list.

The four structures you will actually be quoted

Percentage of enrolled debt

The fee is a share of the total balance you put into the program, commonly quoted somewhere in the teens to mid twenties. It is charged whether the negotiation lands well or poorly.

The appeal is predictability. The problem is that it pays the same for a mediocre result as for a strong one, and it rewards enrolling more debt rather than resolving it well.

Percentage of savings

The fee is a share of the difference between what you owed and what you end up paying, commonly quoted in a similar range. It only produces a bill when there is a reduction to measure it against.

The catch is in the definition. Savings measured against the full contracted payback amount is a much larger number than savings measured against the current outstanding balance. Ask which one is in the agreement.

Flat monthly program fee

A fixed amount per month for the duration of the program, sometimes scaled to the size of the stack. It is easy to budget and easy to abuse, because a program that drags on longer earns more.

If you are quoted this, ask what the expected duration is and what happens to the fee if the file stalls.

Hourly or flat fees for legal work

If a funder has already sued, defending that case is a separate line item, performed by licensed attorneys, and billed on its own terms. Debt settlement companies are not law firms, so this never sits inside a settlement fee by default.

A fee and a retainer are not the same word

Proposals use both, often in the same paragraph, and they describe different things.

A fee is money earned for a result. A settlement reached, a schedule renegotiated. A retainer is money paid up front and held against work not yet performed, drawn down as it gets done.

The problem is the third animal: a nonrefundable up front payment described as a retainer. That is neither.

Three questions settle which one you are being offered. Is the payment refundable, and under what conditions. What exactly has to happen before it counts as earned. And if it is being held rather than spent, who holds it and in whose name. Get those answers in the agreement, not on the call.

The same file, four ways

Take a hypothetical shop, Ridgeline Fabrication, with $300,000 in outstanding advance balances across four positions.

Structure	How it is calculated	Fee
20% of enrolled debt	20% of $300,000	$60,000
25% of savings, settled at 50 cents	25% of $150,000 reduced	$37,500
25% of savings, settled at 60 cents	25% of $120,000 reduced	$30,000
$2,500 per month for 14 months	flat, duration driven	$35,000

Historical MCA negotiations have often landed in a range around 40 to 60 cents on the dollar. That is a description of past outcomes across many files, not a projection for yours, and the table above uses it only to show how the same result produces very different bills depending on the structure.

The point of the table is not that one column wins. It is that a 20 and a 25 in two different proposals can be $60,000 and $30,000.

The advance fee line

The single most useful screening question is when the money is due.

The Federal Trade Commission's Telemarketing Sales Rule, 16 CFR 310.4(a)(5), makes it an abusive practice to request or receive a fee for a debt relief service until the seller has renegotiated, settled, reduced, or otherwise altered the terms of at least one debt under an agreement the customer signed, and the customer has made at least one payment under that agreement. The rule took effect in October 2010 and it reshaped the consumer side of this industry.

The same provision also controls how a fee gets spread across several debts. Under 16 CFR 310.4(a)(5)(i)(C), a fee charged for one debt has to bear the same proportional relationship to the total fee as that debt bears to the total amount enrolled, or else be a percentage of savings applied at the same percentage to every debt. That closes an obvious move: settling the two small easy positions first and billing most of the program against them.

There is a real wrinkle for business debt. The Telemarketing Sales Rule contains a business to business exemption at 16 CFR 310.6(b)(7), so a provider selling commercial debt relief to a company may argue the advance fee provision does not reach it. Note what the exemption does not cover: the anti misrepresentation provisions at 16 CFR 310.3(a)(2) and (a)(4) still apply to those calls. Lying to a business owner on the phone is not exempt.

Separately, the FTC's authority under Section 5 of the FTC Act to police unfair and deceptive acts and practices covers harm to small businesses, and the agency has used it in this market.

That is not a theoretical point. Yellowstone Capital paid $9.8 million in 2021 to settle FTC charges that it pulled money from merchant accounts without authorization and misstated how much financing businesses would actually receive. The Commission returned more than $9.7 million of it to small businesses in 2022. In the case against RCG Advances, formerly Richmond Capital Group, the company and its owner were banned from the merchant cash advance industry in 2022, and a $20.3 million judgment was entered against operator Jonathan Braun in February 2024.

Those cases sit on the funder side of the market rather than the relief side. What they establish is that a business owner is not outside the agency's reach simply because the debt is commercial.

So the honest framing is this. The advance fee ban is the standard consumers get. Whether it binds a commercial provider is arguable. A provider that will not voluntarily hold itself to a performance based fee, when the whole consumer side of the industry has done so since 2010, has made a choice you should weigh.

Large money demanded before anything has happened is the number one red flag in this industry, and it is red for a simple reason. Once the fee is collected, the incentive to do difficult work with a hostile funder drops to zero.

Costs that sit outside the program fee

• Legal defense, if you are sued. Separate scope, separate bill, handled by counsel.
• Court costs and filing fees.
• Wire or payment processing charges on settlement payouts.
• Accounting or bookkeeping cleanup, if your statements are a mess and someone has to rebuild them.

If there is a dedicated account

Many programs ask you to accumulate settlement money somewhere separate from your operating account. On the consumer side, 16 CFR 310.4(a)(5)(ii) puts conditions on that arrangement:

• The funds sit at an insured financial institution.
• You own them, along with any interest they earn.
• The entity administering the account is not owned by, controlled by, or affiliated with the relief company.
• That administrator neither pays nor receives compensation for referrals.
• You may leave the program at any time and get the money back, less only fees actually earned, within seven business days.

Read your own agreement against that list. Commercial files are not automatically covered by the consumer rule, so the real question is whether the provider chose to mirror the standard or chose not to. Either answer tells you something.

What we charge

[PLACEHOLDER: fee model]

Five questions that get you a real number

1. Is the fee a percentage of enrolled debt, a percentage of savings, or a flat amount, and what is the exact base it is applied to?
2. In dollars, what is the fee on my file at a good outcome and at a poor one?
3. When is the first dollar due, and what has to have happened before it is due?
4. What is billed separately, and by whom?
5. If I leave the program in month three, what do I owe?

Get all five in writing. A provider that answers them cleanly is easy to compare against another provider that answers them cleanly. Everything else is a percentage floating in space.

A reasonable next step

Take whatever proposal you are holding and convert it into a single dollar figure using your own balances. If you cannot do that from the document in front of you, the document is not finished, and that is a fair thing to say out loud before you sign it.