Signed a Confession of Judgment? What it means and what to do now

A COJ is a pre-signed admission of liability. On default, real or claimed, the funder's attorney files it with a supporting affidavit, and a court clerk enters judgment against you: no complaint served, no hearing, no chance to raise defenses. Enforcement tools follow immediately: bank restraints, levies, liens on the judgment amount plus fees.

The COJ typically binds both the business and every personal guarantor, which is how a business default reaches personal bank accounts within days.

New York, the venue that processed most MCA COJs for a decade, banned their use against out-of-state debtors in 2019, and its recent reforms have added merchant protections with real teeth: courts have vacated thousands of judgments entered with procedural defects. But COJs remain enforceable in other states, in older agreements, and against in-state debtors where permitted. The document in your file is dangerous until a lawyer says otherwise about your specific facts.

Your job is to make sure the COJ never gets used. That means no silent defaults: if payments are becoming unsustainable, move on reconciliation, restructuring, or settlement before a missed remittance gives the funder cause. It also means professional handling of any negotiation, because a misstep that triggers default carries judgment-level consequences within days, not months.

Move on two tracks the same week. Defense: an MCA-experienced attorney reviews the entry for vacatur grounds, defective affidavits, improper venue, service failures, statutory noncompliance, which are common enough that thousands of COJ judgments have been undone. Resolution: the judgment amount itself remains negotiable, because enforcement is slower and costlier for the funder than a settlement. Restraint releases, vacatur motions, and settlement talks routinely run in parallel.