GTR Source Lawsuits

If GTR Source has filed a lawsuit against your business, frozen your bank account, or threatened enforcement, you are in a time-sensitive situation that requires immediate legal attention. GTR Source LLC is one of the more aggressive merchant cash advance (MCA) funders in the country, and the company has a documented pattern of filing collection actions in New York courts, even against businesses headquartered far outside the state. By the time most owners realize what is happening, a default judgment has already been entered, a restraining notice has been served on their bank, or daily ACH debits have drained operating cash to zero.

This page explains how GTR Source lawsuits actually unfold, why they almost always end up in New York, what defenses are available under New York law, and exactly what steps to take in the first 24 to 72 hours after you are served or restrained. CredibleLaw represents small businesses nationwide in MCA litigation, judgment vacatur, bank levy emergencies, and structured settlements. If your account has been frozen or you have been served with a summons, call (888) 201-0441 before any further funds are seized.

What Is GTR Source?

GTR Source LLC is a New York–based merchant cash advance funder that purchases future receivables from small businesses in exchange for an upfront lump sum. The arrangement is documented as a Merchant Agreement or Receivables Purchase Agreement, not a loan. In practice, GTR Source advances a sum of money and then collects a fixed daily or weekly amount from the merchant’s business bank account by ACH until a contractual purchased amount — often 1.4x to 1.5x the advance — has been collected.

Like most MCA funders operating in the New York commercial finance market, GTR Source has historically relied on a combination of broad personal guarantees, broker-driven origination, and aggressive post-default enforcement. Before New York’s 2019 reform legislation, GTR Source and its peers regularly used confessions of judgment (COJs) to obtain New York judgments against out-of-state merchants without any prior notice or court hearing. Although the use of COJs against non-New York debtors is now restricted, the underlying contract structure — including New York forum selection clauses, jury trial waivers, and broad guaranty language — remains substantially intact.

If you want to understand the broader regulatory backdrop, the Federal Trade Commission and the Consumer Financial Protection Bureau have both flagged abusive collection practices in the small-business financing market, and the New York State Unified Court System is where the overwhelming majority of GTR Source matters are filed.

How GTR Source Lawsuits Work

A GTR Source lawsuit typically follows a predictable escalation. Once a merchant misses ACH debits, requests reconciliation, or stops payments outright, GTR Source treats the contract as in default and accelerates the full unpaid balance — including the unrecouped purchased amount, default fees, blocked-account fees, and attorneys’ fees. Within days to weeks, the file is referred to outside counsel, and a complaint is drafted for filing in New York.

Most GTR Source actions are filed in the Supreme Court of the State of New York, frequently in Kings County, Nassau County, Westchester County, or the New York County Commercial Division. The merchant and any personal guarantors are then served — sometimes properly, often not. Service defects are a recurring issue in MCA litigation and frequently form the basis for vacating a default judgment later. If the merchant fails to answer within 20 to 30 days, GTR Source moves for a default judgment, which a New York court can enter on submission of an attorney’s affirmation, the contract, the guaranty, and an affidavit of nonpayment.

Once a judgment is entered, enforcement is rapid. Within 24 to 72 hours, GTR Source’s counsel can issue a restraining notice or information subpoena with restraining notice under CPLR § 5222 to every bank where the business or its guarantors are believed to hold accounts. The bank receives the notice and freezes funds up to twice the judgment amount. By the time the merchant calls the bank to ask why their card is being declined, the freeze is already in place. For a deeper procedural breakdown, see our overview of merchant cash advance lawsuits and the New York–specific MCA lawsuit process.

GTR Source Froze Your Bank Account or Filed a Lawsuit?

If you found this page because GTR Source has already restrained your accounts, served you with a summons, or accelerated daily ACH debits, the order of operations matters. Acting in the wrong sequence — or not acting at all — is what turns a survivable dispute into a closed business.

Frozen Business Bank Accounts

A frozen bank account is the single most disruptive enforcement event a small business can face. Under New York CPLR § 5222, a judgment creditor’s restraining notice locks down deposits up to twice the judgment amount, and the bank — not GTR Source — is the entity holding the funds. Payroll bounces, vendor ACHs reverse, merchant processing settlements get stuck, and the cascading damage compounds within days. A targeted motion practice is required to release exempt funds, narrow the restraint, or vacate the underlying judgment that authorized it. Our emergency MCA bank account freeze guide for New York walks through exactly what to file and in what order.

Sheriff Levies and Restraining Notices

After the restraining notice freezes the account, GTR Source’s counsel can deliver an execution to a New York City Marshal or county Sheriff, who then levies the frozen funds and turns them over to the creditor. Once funds are turned over, recovering them becomes substantially harder than preventing the levy in the first place. If a marshal or sheriff has already contacted your bank, time is measured in hours, not days. We outline the levy timeline and the available emergency motions in our guide to stopping an MCA bank levy in New York.

ACH Withdrawals Draining Your Account

Even before any judgment is entered, GTR Source can withdraw the contractual daily or weekly amount directly from your operating account under the ACH authorization buried in the Merchant Agreement. After default, those withdrawals often increase or are joined by additional fees. Stopping ACH debits requires more than calling your bank — improperly executed stop-payment orders can themselves trigger contractual default. A coordinated approach involving the bank, the originating depository financial institution, and a demand letter to GTR Source is usually required. See how to stop MCA ACH withdrawals in New York for the current procedure.

Sudden Default Judgments

Many merchants first learn of a GTR Source lawsuit only after the judgment has been entered and the bank account is frozen. This usually means service was either defective or sent to a stale address on file with the New York Department of State. A motion to vacate the default judgment under CPLR § 5015(a) is the appropriate vehicle, and a meritorious defense — usury, disguised loan, lack of personal jurisdiction, or improper service — must be presented. We address timelines and evidentiary standards in our New York MCA default judgment resource.

Why Most GTR Source Cases Are Filed in New York

Almost every GTR Source Merchant Agreement contains a forum selection clause designating New York as the exclusive venue and New York law as the governing law, regardless of where the merchant operates. This is not accidental. New York courts have a well-developed body of case law distinguishing genuine receivables purchases from disguised usurious loans (see, e.g., the line of cases applying the LG Funding factors), and GTR Source’s contracts are drafted to fit within that framework. The state’s commercial courts also process money judgment cases efficiently, and post-judgment enforcement under the CPLR is among the most creditor-friendly in the country.

That said, the choice of forum is not unchallengeable. Forum selection clauses can be set aside where they are unreasonable, where service was improper, or where the contract itself is void as a matter of public policy — for example, where it operates as a criminally usurious loan. We discuss venue strategy in greater depth in our pages on the New York Commercial Division and MCA litigation and MCA lawsuits filed in New York County.

Common GTR Source Collection Tactics

Understanding the specific enforcement tools GTR Source uses helps a business owner anticipate what comes next and respond before each step compounds the damage.

Bank Account Levies

After judgment, a restraining notice followed by a property execution allows GTR Source to capture the full balance of a business operating account, up to twice the judgment amount. Levies are not limited to the merchant’s primary account — any account at any bank where the judgment debtor or guarantor is the named owner is fair game, including personal accounts of guarantors.

ACH Withdrawals

Pre-default, GTR Source debits a fixed amount each business day. Post-default, the ACH authorization is often used to attempt larger sweeps, bounced-payment fees, and reattempts that pile up bank NSF charges. Because the authorization is contractual, simply revoking it without a coordinated legal strategy can be characterized as an additional default event.

UCC Liens

Most GTR Source Merchant Agreements include a security interest in the merchant’s accounts and receivables, perfected by a UCC-1 financing statement filed with the New York Department of State or the merchant’s home-state filing office. A UCC lien can interfere with the business’s ability to obtain new financing, factor invoices, or sell substantial assets. Lien releases are typically negotiated as part of any settlement.

Lawsuits and Judgments

Litigation is the most aggressive — and most expensive — tactic, but it is also the one that creates the most leverage for GTR Source once a judgment is in hand. A New York money judgment can be domesticated in the merchant’s home state under that state’s Uniform Enforcement of Foreign Judgments Act, exposing out-of-state property and accounts to enforcement. Defending the New York case competently is far less expensive than dealing with a domesticated judgment after the fact.

Can GTR Source Garnish Wages or Personal Funds?

This is one of the most common questions we receive. The short answer is that GTR Source’s primary target is the business and its receivables, but a personal guarantor is exposed to the full weight of post-judgment enforcement.

Almost every GTR Source Merchant Agreement is signed alongside a Personal Guaranty of Performance from one or more owners. If GTR Source obtains a judgment against the guarantor individually, then the guarantor’s personal bank accounts can be restrained, personal property can be levied, and — under New York CPLR § 5231 — wages from a non-MCA W-2 employer can be garnished up to 10% of gross income, subject to federal CCPA limits. If the guarantor is self-employed or paid via 1099, traditional wage garnishment does not apply, but personal accounts and personal property remain at risk.

A judgment is required before any of this enforcement is available. That is why responding to the lawsuit on time — or moving promptly to vacate a default — is the single highest-leverage step a guarantor can take.

What Happens After a GTR Source Judgment?

Once a New York court enters a money judgment in favor of GTR Source, the company gains access to the full enforcement toolkit under Article 52 of the CPLR. In practical terms, this means restraining notices to banks, information subpoenas requiring sworn answers about assets and income, property executions delivered to a marshal or sheriff, and judgment liens on real estate. Interest accrues on the judgment at New York’s statutory rate of 9% per year — a number that can dwarf the original advance over time.

Most owners learn about the judgment only when something concrete happens — an account is frozen, a vendor’s ACH bounces, a payroll provider can’t sweep funds. By then, the original 30-day window to answer the complaint has passed and any direct challenge to the merits requires a motion to vacate. Acting in the first 24–72 hours after enforcement begins materially changes what relief is available. Our emergency MCA help resource and how to unfreeze a bank account after MCA enforcement explain the immediate steps.

Legal Defenses to GTR Source Lawsuits

MCA contracts are not unbeatable. New York law gives merchants and guarantors several substantive defenses, and the strength of those defenses depends on the specific contract language, the funding history, and how the parties performed in practice.

Usury Defense (New York Civil and Criminal Caps)

New York imposes a 16% civil usury cap and a 25% criminal usury cap on loans. Civil usury generally does not apply to corporate borrowers, but the 25% criminal usury cap does — and a transaction that crosses the criminal usury threshold is void in its entirety, with no obligation to repay even principal. The threshold question in any GTR Source matter is whether the agreement is a true purchase of receivables (not subject to usury) or a disguised loan (subject to it). New York courts apply the LG Funding factors — reconciliation, finite term, and recourse on bankruptcy — to make that determination. Our deep dive on the MCA usury defense in New York walks through how courts have ruled on each factor.

Disguised Loan Defense

Closely related to the usury argument, the disguised-loan defense focuses on whether the contract — read as a whole and applied as it actually operated — placed absolute repayment risk on the merchant. Mandatory daily payments tied to a fixed amount rather than actual receipts, a finite repayment term, broad personal guarantees that survive bankruptcy, and reconciliation clauses that exist on paper but are denied in practice all support a finding that the transaction is a loan. See our analysis at MCA disguised loan defense in New York.

Lack of Personal Jurisdiction

If a merchant has no operations in New York, no offices, no employees, and no New York receivables, the forum selection clause in the Merchant Agreement is not always enough to compel personal jurisdiction — particularly where the contract is challenged as void on usury grounds. A jurisdictional motion under CPLR § 3211(a)(8) can be filed at the outset and, if successful, ends the New York case entirely.

Fraud and Misrepresentation

Where brokers or GTR Source representatives misstated the daily payment amount, the total cost, the existence of reconciliation rights, or the nature of the transaction, fraudulent inducement can be raised as both a defense and a counterclaim. These claims require specific factual pleading and are most effective where contemporaneous emails, text messages, or recordings support the allegation.

Improper Service

Defective service is among the most common procedural defenses in MCA litigation. Affidavits of service that recite implausible facts, service on stale Department of State addresses, and substitute service that fails CPLR § 308 or BCL § 306 requirements all open the door to dismissal or vacatur. A traverse hearing — at which the process server must testify — is often where these cases are won.

Vacating a Default Judgment

If a default judgment has already been entered, the path forward is a motion to vacate under CPLR § 5015(a)(1) (excusable default plus meritorious defense) or § 317 (lack of actual notice for a corporate defendant). Both vehicles have strict timing rules, and the affidavit supporting the motion must set out the merits with specificity. Generic denials are not enough. Our resource on vacating an MCA default judgment in New York details what the moving papers need to show, and our guide to dismissing an MCA lawsuit in New York covers the affirmative dismissal motions available before any default ever issues.

What to Do Immediately If You’ve Been Sued by GTR Source

The first 24 to 72 hours after service or after an account freeze are decisive. The following sequence reflects what experienced MCA defense counsel typically does on intake.

1. Do not ignore the lawsuit. Even if you believe the case is meritless, a default judgment will be entered if no answer is filed within the deadline stated on the summons (20 days for personal service in New York, 30 days for other forms).
2. Confirm whether a judgment has already been entered. Run a search on the New York State Unified Court System eCourts platform using the business name and any guarantor name. Identify the index number, the court, and the date of any judgment.
3. Identify whether any restraining notices have been served. Call each of your banks and ask whether a restraining notice has been received. If yes, request a copy and the contact information of the restraining attorney.
4. Contact MCA defense counsel before contacting GTR Source or its lawyers. Statements made directly to the creditor — including offers to pay — can be used against the merchant in court.
5. Gather the full contract package. The Merchant Agreement, all amendments, the personal guaranty, the broker disclosures, the funding statement, every ACH debit record, and any reconciliation requests sent to GTR Source are all relevant. Email threads with the broker matter as much as the formal contract.
6. Stabilize cash flow legally. Do not unilaterally close the account or send funds offshore — these moves can trigger fraudulent conveyance and contempt issues. A defense attorney can identify lawful ways to protect operating capital while the case is pending.

Settlement Options With GTR Source

GTR Source settles cases. The terms available depend on the stage of the litigation, the strength of the defenses raised, and the merchant’s actual financial position. Some of the most common structures we negotiate include:

• Lump-sum settlements at a discount to the unrecouped purchased amount, often funded from a successor lender, an investor, or family resources. These typically require proof of funds and are documented with a stipulation of discontinuance and a UCC lien release.
• Structured payment plans extending over six to twenty-four months, usually with a step-down ACH schedule that reflects realistic cash flow. These work best where the litigation defenses are weaker and the merchant’s revenue is stable.
• Negotiated discounts conditioned on a vacatur of the existing judgment and lien releases — particularly important where multiple MCA judgments are stacked and a fresh financing line is needed to fund the settlement.
• Timing-based strategies, where motion practice — a motion to vacate, a motion to dismiss, or a jurisdictional challenge — creates the leverage that produces a meaningful discount before the motion is decided.

Settlement is rarely the right first call, but it is almost always the right eventual outcome for a merchant who is actively operating. Our MCA settlement framework for New York and MCA settlement strategy resource outline how to evaluate offers and counteroffers.

Related MCA Lender Lawsuits

GTR Source is one of many MCA funders that file New York actions against small businesses nationwide. If your business has stacked advances from multiple funders, the litigation strategy needs to account for all of them — pursuing a single creditor in isolation can leave the others unaddressed. We maintain dedicated resources for the most active filers, including Yellowstone Capital lawsuits, Itria Ventures lawsuits, Rapid Capital Funding lawsuits, and EBF Partners lawsuits. Each funder has its own contract template, preferred court, and counsel of record, and a coordinated defense across multiple matters consistently produces better outcomes than treating each case in isolation.

When to Contact an MCA Defense Attorney

The right answer is almost always: now, before the next step. The economics of MCA defense are heavily skewed toward early intervention. A motion filed before a default judgment is entered is faster, cheaper, and more likely to succeed than a motion to vacate filed after a freeze has already disrupted operations. A demand letter sent before the daily ACH cycle compounds is far more effective than a recovery action after $40,000 has been swept.

If you have received a summons, a restraining notice, an information subpoena, or any communication referencing acceleration or default, contact an MCA defense attorney within 24 hours. CredibleLaw evaluates cases at no cost and can typically tell you within a single call whether you have grounds to vacate, dismiss, or settle, and what the realistic range of outcomes looks like. Reach our intake team at (888) 201-0441, or learn more about our New York MCA defense practice and our broader merchant cash advance defense services.

Frequently Asked Questions

Can GTR Source freeze my business bank account?

Yes — but only after a money judgment has been entered in a court of competent jurisdiction. Once a judgment exists, GTR Source’s counsel can serve a restraining notice on your bank under New York CPLR § 5222, and the bank is required to freeze funds up to twice the judgment amount. If the freeze occurs before any judgment, that is grounds for an immediate emergency motion.

What happens if I ignore a GTR Source lawsuit?

A default judgment will almost certainly be entered against the business and any personal guarantors. From there, GTR Source can restrain bank accounts, levy on personal and business property, garnish wages of W-2 guarantors, place liens on real estate, and domesticate the New York judgment in the guarantor’s home state. Each of these steps is far harder and more expensive to undo than to prevent.

Can a GTR Source default judgment be reopened?

Often, yes. New York CPLR § 5015(a)(1) allows a court to vacate a default where the defendant shows a reasonable excuse for the default and a meritorious defense. CPLR § 317 provides relief where a corporate defendant did not receive actual notice in time to defend. Both motions have to be filed within specific timeframes and supported by sworn affidavits, and the meritorious defense — usury, disguised loan, lack of jurisdiction, improper service — must be presented with specificity.

Are MCA contracts legal in New York?

Genuine receivables purchase agreements are legal. Disguised loans masquerading as receivables purchases are not, and a transaction that crosses the 25% criminal usury threshold is void as a matter of New York public policy. Whether a particular GTR Source contract is enforceable as written is a fact-specific question that turns on the contract language, the reconciliation history, the personal guaranty terms, and how the parties actually performed.

How fast can GTR Source collect after winning a judgment?

Very fast. In New York, a creditor can issue a restraining notice immediately upon entry of judgment, and most banks process the freeze within 24 hours of receipt. A property execution to a marshal or sheriff can follow within days. The window between judgment and an empty account is often less than a week.

Can I settle MCA debt for less than the full balance?

Yes, in most cases. Settlement discounts depend on the strength of the defenses available, the merchant’s financial position, the stage of the litigation, and whether motion practice has created leverage. Lump-sum settlements often land at a meaningful discount to the unrecouped purchased amount, particularly where vacatur, jurisdictional, or usury defenses are credibly raised. Structured plans tend to recover more for the creditor and are reserved for cases without strong substantive defenses. See our MCA settlement resource for current ranges.

How do I stop GTR Source ACH withdrawals immediately?

Stopping ACH withdrawals requires a coordinated approach with your bank, a written demand to GTR Source, and — in most cases — counsel involved before the stop-payment is filed. A unilateral stop-payment without legal cover can be characterized as an additional event of default and may accelerate the full balance. Our guide to stopping MCA ACH withdrawals immediately explains the order of operations.

Final Thoughts: Move Quickly, Move Once

GTR Source litigation is fast, formulaic, and weighted heavily in the creditor’s favor when a merchant is unrepresented. It is not, however, unbeatable. Substantive defenses under New York’s usury and disguised-loan framework, procedural defenses around service and jurisdiction, and tactical motion practice around default judgments all routinely produce dismissals, vacaturs, and meaningful settlement discounts — but only when the work is done early and competently.

If you are facing a GTR Source lawsuit, a frozen account, daily ACH debits, or a sudden judgment, do not wait for the next enforcement step. The deadlines are short, the leverage is in motion, and the cost of acting today is a fraction of the cost of acting after the next levy clears. Speak with an MCA defense attorney at CredibleLaw at (888) 201-0441, or review our MCA emergency help resource to understand the immediate next steps for your situation.