All You Need To Know About Confession Of Judgement


Are you wondering what confession of judgement really means? If yes, then you have come to the right place. In simple terms, a confession of judgement is a written agreement that the defendant signs. This agreement accepts the liability and amount of damages that have been agreed on in the trial. In this article, we will discuss all elements that are associated with confession of judgement. 

What Is A Confession Of Judgment?

What Is A Confession Of Judgment

Before you go into the details, let us understand the concept of confession of a judgement. A confession of judgement (COJ) is a legal document that is an agreement that enables a lender to avoid a lawsuit. Similarly, it also allows the obtaining of a court-ordered judgment to begin the collection on debt after a loan has defaulted. 

On the other hand, COJ is also a legal device, which is a clause in a contract. In such a contract, a clause remains where the debtor agrees to allow a creditor to acquire a judgment against the debtor. Moreover, this is only during the nonoccurrence of payment and often without any advised warning or notice. 

Similarly, such clauses might also require the debtor to waive their right to assertion of any defense against the entry of judgment. Or be represented by an attorney hired by the creditor. 

On the other hand, confessions of judgement tend to be controversial and are regularly challenged on the grounds of the facilitation of predatory lending practices, along with violations of due process rights. 

Purpose Of Confession Of Judgement

Purpose Of Confession Of Judgement

You must be wondering about the purpose of a confession of judgement. As you know by now, a confession of a judgement is a written statement signed and verified by the defendant through oath. These papers are submitted to the court through the clerk for entry. 

Moreover, it can also be entered in any court having jurisdiction over the total amount involved. Similarly, then the judge signs the judgment that specifies the principal due, interest accrued, and the cost incurred by the creditor. 

Now, the main purpose of the confession of judgement is that once it has been executed, the COJ will be kept by the plaintiff. Moreover, it will also not be utilized or filed with a court of law. Moreover, this will be only applicable when the specific payments have already been made. 

And if so, the confession of judgement might then be returned to the defendant, unfiled, beginning when the debtor has completed all payments. 

On the other hand, if the payments are not made on time or as agreed, the lender or the creditor can feel that they can make use of the COJ to get filed through courts. This will allow the plaintiff to make use of all the tools for the collection of judgment available, similar to a fully held trial. 

Usage Of Confessions Of Judgement

Usage Of Confessions Of Judgement

There are a variety of uses for confession of judgment, like levying your bank accounts and seizure of assets. Moreover, the confession of judgement also has the ability to act as a lien on receivables and property. 

In various situations, an aggressive bank account levy is completed successfully without any warnings. Due to this, your bank account will not notify you before your banking account is frozen or emptied. 

Moreover, if you are someone who does business or has a personal banking account in the state of New York, then you’ll observe that the plaintiff has already swiped up your bank account. This means the moment the confession of judgement has been signed into a court order, the judgment will make your accounts be swiped off within a couple of days after the judge’s order. 

Similarly, the state of New York has been a state that has primarily utilized confession of judgement. Due to this, most creditors tend to conduct their business in this location. Section 3218 of New York’s Civil Practice Law & Rules (CPLR) allows confessions of judgments to be filed within the state. 

Moreover, you will also observe that after the completion of an investigation by the New York Marshall’s Office for abusive collection activities, many inconsistencies were observed. Similarly, the investigation also showcased how the office was benefiting financially from its overly aggressive collection strategies. 

In other words, the strategies used by the New York Marshall’s Office had been beneficial for MCA businesses. The whole process also made headlines across the state. This led to the amendment of CPLR 3818 in 2019 as a remedy for the abuse that was going on. Similarly, this amendment also enabled the restriction of the usage of confession of judgement for residents and businesses domiciled in New York.

Should I Sign A Confession Of Judgement?

Should I Sign A Confession Of Judgement

A big question arises in your mind: whether to sign a confession of judgement. This document is a powerful tool used by creditors to expedite the procedure of acquiring a civil judgment. In such an event, the debtor tends to initiate a condition of the confession of judgment. Moreover, it could include missing a required payment, the creditor filing an affidavit with the court and obtaining judgments for collection of payment. Similarly, this could happen all without the requirement of bringing an actual lawsuit to prove the case. 

As a legal professional, I would suggest that it is wise not to sign a confession of judgement. Similarly, COJ is a kind of agreement that is included within merchant cash advances. Due to this, you have to be aware of unfair terms that might be included within the confession of judgments. 

Similarly, if your advance agreement does contain a clause regarding confession of judgement, then it is advised that you should sign it only after consulting with an experienced civil lawyer first. 

Final Words 

Now you have a better understanding of the workings of a confession of judgement within the realm of creditor & debtor relationships. Moreover, I will also suggest that if you have further doubts related to this legal clause, it is better that you consult with an experienced business debt lawyer. Similarly, contacting a good law firm is also a wise decision to take. Best of luck.

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