How to Fight a Confession of Judgment in New York

What Is a Confession of Judgment?

A confession of judgment (COJ) is a clause in certain contracts—especially merchant cash advance (MCA) agreements—that allows the lender to file a court judgment against you without a lawsuit. In effect, you waive your right to due process, giving the MCA company the power to enforce a judgment the moment they claim you defaulted.

These provisions are often buried in the fine print and can be devastating. In New York, even after reforms to protect out-of-state businesses, COJs remain a serious threat for in-state entities.

Why COJs Are a Problem for New York Businesses

If you signed an MCA contract with a confession of judgment, here’s what could happen:

• No notice before a judgment is entered
• No opportunity to present a defense in court
• Immediate freezing of your business bank accounts
• Aggressive enforcement through levies and garnishments

These tactics can cripple a small business overnight, often based on inflated or inaccurate claims of default.

Are COJs Legal in New York?

Yes—but with limits. As of 2019, New York law prohibits COJs against non-New York residents in commercial transactions. However, if your business is based in New York, COJs may still be enforceable—unless challenged on specific legal grounds.

Legal Grounds to Challenge a COJ

You may be able to vacate (reverse) a judgment based on the following:

• The confession of judgment was filed improperly
• The COJ clause was buried in the contract or not explained clearly
• You never actually defaulted on the agreement
• The agreement is a disguised loan with usurious interest
• The COJ was entered without jurisdiction or procedural compliance

Our legal team at J. Singer Law Group reviews every case individually to determine the strongest grounds for defense.

What to Do If You’ve Been Hit With a COJ

If you’ve already had a judgment entered against your business—or if your accounts are frozen—take immediate action:

1. Do not ignore the judgment
2. Contact an experienced MCA defense lawyer
3. Gather your contracts, payment records, and communications
4. We can file a motion to vacate and restore your access to funds
5. We may also pursue claims against the funder if they violated NY law

Why You Need a Lawyer

Confessions of judgment are legally complex. Funders know how to fast-track enforcement, but that doesn’t mean you’re powerless. A skilled attorney can spot flaws in the judgment and use New York’s procedural rules to your advantage.

At J. Singer Law Group, we’ve successfully defended business owners from improper COJs, vacated judgments, and unblocked frozen accounts.

If you're facing a confession of judgment in New York, don’t wait. Contact J. Singer Law Group to review your case and take swift legal action. We fight to protect small business owners from unlawful MCA enforcement.