A judgment was entered without a lawsuit.
A confession of judgment is a document signed in advance that lets a funder enter judgment without suing first. Since August 2019, New York has barred filing one against a debtor who did not reside in the state. Whether an existing judgment can be challenged depends on how it was obtained.
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What is a confession of judgment?
A confession of judgment is a signed statement in which a business, and usually an owner personally, agrees in advance that judgment may be entered against them for a stated sum if the funder declares a default. It is signed at the start, often in the same stack of paper as the advance itself, and filed later without any lawsuit, notice or hearing.
Because there is no case, there is no summons. The first sign is frequently a bank telling you the account has been restrained.
Can a funder still file one against my business?
Only in narrower circumstances than before. New York amended CPLR 3218 in 2019: an affidavit of confession may now be filed only with the clerk of the county where the defendant stated they resided when the affidavit was executed, or where the defendant resided at the time of filing.
That amendment followed reporting on funders filing tens of thousands of confessions in New York courts against merchants who had no connection to the state; the sponsor's memo to S6395 describes the practice the bill was aimed at. Whether a particular filing was proper turns on the facts of that filing, and on where the person who signed actually lived.
Confessions of judgment have also drawn federal enforcement. One Federal Trade Commission action concerned a merchant cash advance funder's collection practices and ended in a permanent industry ban for the company and its owner.
Can a confession of judgment be challenged after it is entered?
Sometimes. A judgment entered on a confession is still a judgment, so it does not simply lapse, and challenging one is its own proceeding rather than a defense in an existing case. The grounds that come up include the filing requirements in CPLR 3218 itself, the sufficiency and execution of the affidavit, whether the sum entered matches what the affidavit authorised, and whether the amount reflects payments actually made.
Whether any of that applies depends on the document and the docket. The practical first step is to obtain the filed affidavit and the judgment and read them against the payment history.
What should you do first?
If an account has already been restrained, the immediate problem is the restraint rather than the judgment, and the two are handled on different tracks. Get the county and index number from the bank, pull the filed papers, and get them reviewed quickly. Timing matters more here than in almost any other part of this work.
Sources
- CPLR 3218: Judgment by confession (New York State Senate)
- New York Senate Bill S6395 (2019): confessions of judgment (New York State Senate)
Every case turns on its own agreement, facts and procedural posture. Nothing on this site is legal advice or a prediction of any outcome.
FAQ
Questions people ask at this stage
How did a judgment appear without me being served?
That is how a confession of judgment works. The affidavit you signed at the outset allows the funder to file for judgment directly, with no summons, no complaint and no hearing. Most people find out when a bank restrains the account or a lien appears.
My business is not in New York. Does the 2019 change help me?
It may be directly relevant. CPLR 3218 now permits filing only in the county where the defendant stated they resided when the affidavit was executed, or where they resided when it was filed. Whether a specific filing complied is a question about that filing, and it needs the actual papers to answer.
Is there a deadline to challenge one?
Treat it as urgent. A confession of judgment is enforceable while it stands, which means collection continues during any challenge, and some grounds for relief are sensitive to how much time has passed. The papers should be reviewed as soon as you know the judgment exists.
What is a confession of judgment?
A signed statement in which a business, and usually an owner personally, agrees in advance that judgment may be entered against them for a stated sum if the funder declares a default. It is signed at the start, often in the same stack of paper as the advance, and filed later without any lawsuit.
Because there is no case, there is no summons. The first sign is frequently a bank telling you the account has been restrained.
Can a funder file a confession of judgment against an out-of-state business?
Only in narrower circumstances than before. New York amended CPLR 3218 in 2019: an affidavit may now be filed only with the clerk of the county where the defendant stated they resided when it was executed, or where the defendant resided at the time of filing.
That amendment followed reporting on funders filing tens of thousands of confessions in New York courts against merchants with no connection to the state. Whether a particular filing was proper turns on the facts of that filing, and on where the person who signed actually lived.
How do I find out what was filed, and where?
If an account has already been restrained, the bank can usually tell you the county and the index number. From there you can obtain the filed affidavit and the judgment from the county clerk, and read them against your own payment history to see what was actually entered.
Get the papers reviewed quickly. Timing matters more here than in almost any other part of this work, because a confession of judgment is enforceable while it stands and collection continues during any challenge.
Can a confession of judgment be challenged after it is entered?
Sometimes. A judgment entered on a confession does not simply lapse, and challenging one is its own proceeding rather than a defense in an existing case. The grounds that come up include the filing requirements in CPLR 3218 and the sufficiency and execution of the affidavit.
Others include whether the sum entered matches what the affidavit authorised, and whether the amount reflects payments actually made. Whether any of that applies depends on the document and the docket.
Speak to the attorney
Book a consultation
Six short questions about what arrived and when, ending with a time that suits you. It takes about two minutes.
- The call is with Migir Ilganayev directly, not an intake desk.
- He asks what arrived and when.
- He reads the agreement and the payment history against each other.
- He tells you where you stand and what the options are.
- Fees are discussed on the call and depend on the matter.
- No obligation. Sending it does not create an attorney-client relationship.
- If it is urgent, calling is faster than writing.
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If a judgment has already been entered, the filed affidavit and the docket are where any challenge starts. Call and we will work out what you are dealing with.