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On Deck Capital Lawsuits in Arlington General District Court
The summons says Arlington General District Court. Your business is in Florida, or New Jersey, or Ohio, and you have never set foot in Virginia.
That is how OnDeck Capital lawsuits work. Here is why the case is in Arlington, what the personal guarantee means for you, and why ignoring it is the one thing you cannot afford to do.
Why is OnDeck suing me in Arlington, Virginia?
OnDeck’s loan agreements contain a choice-of-venue clause that sets Arlington County, Virginia, as the place for any lawsuit. The clause applies to arbitration too. When OnDeck sues a borrower anywhere in the country, it files in Arlington General District Court, and the court has routinely accepted those cases.
OnDeck files them in volume. On a single docket day it is common to see dozens of OnDeck warrants in debt against small businesses and their owners from across the country.
Why am I named personally?
Because you signed a personal guarantee. OnDeck requires one from the business owner on nearly every loan, and it checks the owner’s personal credit before lending. So the warrant in debt names the business and you, and a judgment against you follows you after the business is gone.
Here is how personal liability for business debts works and when a guarantee can be discharged.
What happens if I ignore it?
OnDeck gets a default judgment, and it gets a lot of them, because most defendants live nowhere near Arlington and never appear. Once it has a Virginia judgment, OnDeck hires local counsel where you live, domesticates the judgment there, and collects against you personally: your bank accounts, your wages, your property.
The business being closed does not help. By then the owner is the only one left to collect from.
What is the return date?
A Virginia warrant in debt has a return date printed on it. That is the day you or your lawyer must appear, or respond as the court directs, or the court can enter judgment against you. Virginia general district courts move fast, and the return date is often only weeks after service. Here are my tips for litigating a warrant in debt in Virginia.
Can I defend an OnDeck lawsuit?
Often, yes. Defenses depend on the loan documents, the payment history and how the case was served. Many OnDeck cases settle once the borrower shows up with counsel, because a contested case costs OnDeck more than a default. And if the guarantee is one of several debts you can’t pay, a personal bankruptcy filing stops the lawsuit and can discharge the guarantee.
OnDeck is not the only lender doing this. QuarterSpot and Titan Asset Purchasing file the same way in the same court. Here is how merchant cash advance lawsuits work across all three lenders.
What should I do right now?
Do not file anything with the court or talk to opposing counsel before you talk to a lawyer. I defend business owners sued in Arlington General District Court and Alexandria General District Court, including owners who live nowhere near Virginia.
Call me at (202) 448-5136 before your return date. The consultation is free.
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