Confession of Judgment Attorney Serving New York and Nassau County
A confession of judgment is one of the most powerful enforcement tools an MCA funder has — and one of the least understood by business owners who signed one. You never went to court. You may not have received notice. But a judgment is on file, your bank account is frozen, and the funder is moving to collect the full accelerated balance. That judgment is not final. New York law provides specific grounds to challenge and vacate a COJ, and the 2019 reforms to CPLR § 3218 significantly expanded them.
Aronow Law P.C. challenges confessions of judgment filed against New York business owners — including the clients who first learned about this page from our existing post on COJ vacatur.
A COJ Can Be Filed Without a Lawsuit, a Hearing, or Notice to You • The 2019 CPLR § 3218 Reform Created New Grounds to Challenge COJs • Fraud, Mutual Mistake, and Procedural Defects Can Support Vacatur • Bank Account Freezes Released When a COJ Is Successfully Vacated • Free Consultations With No Time Limit
A COJ Can Be Filed Without a Lawsuit, a Hearing, or Notice to You • The 2019 CPLR § 3218 Reform Created New Grounds to Challenge COJs • Fraud, Mutual Mistake, and Procedural Defects Can Support Vacatur • Bank Account Freezes Released When a COJ Is Successfully Vacated • Free Consultations With No Time Limit
What a Confession of Judgment Is — and Why You Already Signed One
A confession of judgment is a document — buried in most MCA agreements — in which the business owner waives the right to notice, a hearing, and a court proceeding if the funder declares a default. By signing the MCA agreement, the business owner authorizes the funder to file a judgment directly with the clerk of a New York Supreme Court at any time the funder claims a default has occurred.
No lawsuit is required. No summons is served. No opportunity to dispute the default is provided before the judgment is entered. The funder simply presents the COJ document to the court clerk, and a judgment for the full claimed amount — including any accelerated balance and fees — is recorded. A restraining notice is then served on the business's bank, and the account is frozen, often within hours.
For most business owners, this is the first moment they learn a COJ was part of what they signed.
What the 2019 CPLR § 3218 Reform Changed
Before 2019, MCA funders routinely filed confessions of judgment in any county they chose — most often New York County (Manhattan) or Kings County (Brooklyn) — regardless of where the debtor was located. This venue manipulation made it harder for out-of-county business owners to challenge the COJ in a local court and created a structural advantage for funders operating at scale in New York City courts.
The 2019 amendment to CPLR § 3218 changed this in two significant ways. First, it restricted the use of COJs against non-New York residents — out-of-state business owners could no longer be subjected to COJs filed under New York law without additional procedural requirements. Second, it imposed a requirement that COJs be filed in the county where the debtor resides or has its principal place of business.
COJs filed after the 2019 reform that do not comply with these requirements — filed in the wrong county, used against out-of-state parties improperly, or failing to meet the updated form requirements of the amended statute — are subject to challenge on procedural grounds alone. Aronow Law reviews every COJ for compliance with the post-2019 requirements as the first step in every vacatur matter.
What the Florida Divorce Process Looks Like
In many states, one attorney or a title company handles the entire closing. New York operates differently. Buyers have their own attorney. Sellers have their own attorney. The lender has its own attorney. Each represents their own client's interests, and those interests are not always aligned.
A buyer whose attorney is also the seller's attorney — or who is relying on the title company to catch problems — has no independent advocate in the transaction. In a state where real estate documents carry long-term legal obligations, that is a meaningful gap. Aronow Law represents one side of the transaction and one client's interests only.
Understanding how agreement—or conflict—shapes the process.
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Grounds to Vacate a Confession of Judgment in New York
A filed COJ is not a final, unassailable judgment. New York courts have recognized several grounds on which a confession of judgment can be vacated — set aside entirely — restoring the business owner's right to contest the underlying claim.
Fraud or Misrepresentation in the Underlying Agreement
If the MCA funder misrepresented the terms of the agreement — including the nature of the COJ itself, the conditions under which it could be filed, or the amount that could be claimed — the COJ may be vacatable on fraud grounds. Many business owners who signed MCA agreements were not clearly informed that the document they were signing authorized an immediate judgment upon any claimed default.
Mutual Mistake
If both parties operated under a materially mistaken understanding of a key term in the agreement — including the scope or conditions of the COJ authorization — New York courts have recognized mutual mistake as a basis to void the specific provision.
Material Defect in the COJ Form
CPLR § 3218 imposes specific formal requirements on a valid confession of judgment: it must be in writing, signed and verified by the defendant, contain a statement that the amount confessed is justly due, and describe the facts out of which the debt arose. A COJ that is defective on its face — missing required language, improperly verified, or failing to describe the debt with sufficient specificity — can be challenged on formal grounds.
Violation of the 2019 Reform Requirements
A COJ filed in the wrong county after the 2019 amendment — in New York County or Kings County against a Nassau County or Long Island business that should have been filed in the defendant's home county — violates the amended statute. Aronow Law challenges COJs filed in violation of the post-2019 venue requirements in every case where that defect is present.
Recharacterization of the Underlying MCA as a Usurious Loan
If the underlying MCA agreement is recharacterized as a loan — and found to be criminally usurious under New York law — the agreement is void, and a COJ issued under a void agreement is itself unenforceable. This is the most comprehensive ground for vacatur: it does not merely challenge the COJ's form or filing location, it challenges the legal validity of the entire transaction.
What Happens After a COJ Is Vacated
Vacating the COJ does not automatically resolve the underlying MCA dispute. It removes the judgment from the record, releases any bank freeze that was imposed under it, and returns the parties to the position they were in before the funder filed — meaning the funder must now pursue the claim through a conventional lawsuit if it wishes to proceed.
That is a significantly different posture. A conventional lawsuit requires the funder to serve process, file a complaint, and prove its case through normal litigation — subject to all of the defenses available in an MCA lawsuit, including recharacterization, usury, and procedural defects in the documentation. The vacatur of the COJ is often the first step in a broader defense strategy, not the final one.
Frequently Asked Questions About Confessions of Judgment in New York
What is a confession of judgment in New York?
A confession of judgment is a document signed as part of many MCA agreements that authorizes the funder to file a court judgment against the business owner without a lawsuit, hearing, or prior notice — simply by presenting the document to a court clerk when the funder declares a default. The judgment is entered immediately, and a bank account freeze typically follows within hours. The business owner has no advance opportunity to dispute the default before the judgment is recorded.
Can a confession of judgment be vacated in New York?
Yes. New York courts recognize several grounds for vacating a COJ: fraud or misrepresentation in the underlying agreement, mutual mistake, formal defects in the COJ document, violation of the 2019 CPLR § 3218 reform requirements — including filing in the wrong county — and recharacterization of the underlying MCA as a void usurious loan. The strength of a vacatur argument depends on the specific facts of the agreement and the funder's conduct. Aronow Law evaluates which grounds apply in every COJ case.
What changed about confessions of judgment in 2019?
The 2019 amendment to CPLR § 3218 restricted MCA funders from filing COJs in any county they chose. COJs must now be filed in the county where the debtor resides or maintains its principal place of business. The reform also imposed new procedural requirements on the use of COJs against non-New York residents. COJs filed after 2019 that do not comply with these requirements — filed in the wrong county or against out-of-state parties without meeting the new standards — are subject to challenge on procedural grounds.
Will vacating the COJ release my frozen bank account?
In most cases, yes. The bank freeze imposed after a COJ is filed is typically released when the judgment is vacated, because the legal basis for the restraining notice on the account — the filed judgment — has been removed. The funder may attempt to reimpose a freeze through other means if it pursues a conventional lawsuit after the vacatur, but the immediate freeze tied to the COJ is lifted. Aronow Law coordinates the bank release process as part of every successful vacatur matter.
Is a confession of judgment the same as a UCC lien?
No. A confession of judgment is a court judgment entered without a lawsuit. A UCC lien is a security interest filed with the state to encumber specific assets or all of the business's assets and receivables. MCA funders typically use both — the COJ to freeze bank accounts quickly and the UCC lien to encumber ongoing receivables. Each requires a separate legal challenge. Aronow Law addresses both within the same MCA defense engagement.
A Judgment Filed Without a Trial Can Still Be Challenged. Let's Start.
If a confession of judgment has been filed against your business — and your bank account is frozen or your assets are encumbered — the challenge process begins with a legal review of the COJ document, the underlying MCA agreement, and the funder's compliance with the 2019 reform requirements. Aronow Law handles COJ vacatur for Nassau County and Long Island business owners from the firm's Woodbury, NY office. The consultation is free and has no time limit.
