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The civil rules of New York state allow a party to sign an affidavit confessing they owe the other party a certain amount. By virtue of this affidavit, the signatory authorizes the beneficiary party to file it with a New York state county clerk’s office to obtain a judgment for that amount. This confession of judgment (COJ), as it is commonly called, allows a party—be it an individual or a legal entity (such as a corporation or an LLC, for example)—to obtain a judgment without the need for a lawsuit. Thus, it can be a handy legal tool for settling cases involving money due or set to become due in the future, or toward securing a plaintiff against a contingent liability, by avoiding costly and time-consuming litigation.
If you find yourself facing multiple accumulating debts, you should seek the guidance of a seasoned debt advice professional. Our legal team at Roemerman Law can assess your individual circumstances in confidence, go through your options, and help you get back on your feet financially.
Put simply, a COJ is a private admission by a debtor who agrees to allow a creditor to obtain a judgment against them, oftentimes with no advance notice or a hearing. As such, it can be a means to bypass regular court proceedings in the context of settling a dispute, thus saving both parties the time, effort, and finances involved in prolonged legal undertakings.
In cases where litigation is seen as a less desirable option, a COJ is a procedural device that can be used to support a settlement agreement, particularly if the creditor has allowed a debtor to repay the debt over time, such as on the basis of a payment plan. In view of this, COJs are often used in conjunction with settlement agreements. This offers debtors a solid, mutually acceptable repayment arrangement that settles their arrears. At the same time, should a debtor fail to meet the required payments, creditors are able to enter the COJ as a judgment, which can then be enforced like any other.
It is possible to use a COJ to secure a personal guaranty demand when matters of contingent liability arise, meaning a liability or potential loss that may occur in the future if certain circumstances or situations arise. For example, if you were asked to cosign a secured loan, creditors will not look to you for payment—and you will not have a debt toward them—unless and until the loanee defaults on their payment. In such a situation, you may be subject to a contingent liability that could be the subject matter of a COJ.
A COJ can be obtained against more than one debtor in cases of joint debt. Much like any other judgment that can be entered against more than one defendant, it is possible that multiple joint debtors may sign a COJ.
In cases where all the joint debtors do not unite in the confession, the judgment can be entered and enforced against only those who confessed it. Even so, this will not constitute a bar to an action against the other joint debtors upon the same demand.
Where the debt for which a judgment is entered is not all due, execution may be issued only for the sum that has become due, stating the amount with interest and the costs of the judgment. The sheriff will be directed to collect only that sum.
An important limitation of COJs is that they are only valid for three years after they are signed. Hence, if it is anticipated that a liability is likely to last longer than three years—as, for example, in the case of a longer-lasting payment plan—a new COJ will have to be signed before the first one expires.
In a similar vein, no judgment by confession may be entered after the defendant’s death.
If your creditors are asking you to sign a confession of judgment in New York, it is crucial that you are clear about what this may entail in the case of default on your part. At the same time, it is highly advisable that you consider other options that may be available to you, including your eligibility for filing bankruptcy, before committing to signing a COJ. In any event, it always pays to know your rights and be aware of the risks involved in taking any such action.
Roemerman law has extensive experience that enables us to offer related advice, including exploring other options, as well as reviewing drafts of proposed COJs, advising you on their suitability and consequences, and negotiating on your behalf with the party requesting the signing of a COJ.
The detailed requirements for signing a COJ in New York are set out in Civil Procedure Law & Rules (CPLR) 3218 [1]. Some of the main provisions include the following:
Once a judgment is entered based on a COJ, it can be enforced just like any other judgment. Most importantly, it can then be domesticated in other states as a New York judgment. Domestication of judgments refers to how a creditor may enforce a judgment against a debtor who either relocates to another state or owns property in another state. Essentially, it lets the judgment follow the judgment-debtor across state lines.
Most states in the US (including New York state), the District of Columbia, the Northern Mariana Islands, and the Virgin Islands have adopted the 1962 Uniform Enforcement of Foreign Judgments Act (UFCMJRA), which requires them to give effect to the judgments of other states and territories [2].
New York adopted the 1962 Uniform Act as Article 53 of the New York Civil Practice Law and Rules (CPLR) in 1970, which was amended in June 2021 to align it with recent revisions made to the 2005 Uniform Act, which has already been enacted in at least 30 U.S. states [3]. The aim of these amendments was to clarify certain provisions stipulated in Article 53, address inconsistencies in case treatment, and deal with the issue of forum shopping.
By virtue of changes that came into force on August 30, 2019, all COJs executed after that date by parties residing outside of New York are no longer enforceable. Moreover, amended CPLR § 3218 says that the confession must state the New York county in which “the defendant resided when it was executed.” It also stipulates that the confession may only be filed in that county or, if the defendant moved to a different county within New York after signing the confession, “where the defendant resided at the time of filing” [4].
Consequently, only COJs signed by parties that were New York residents at the time of signing are enforceable. This does not preclude the enforcement of COJs against parties that resided in New York when they signed the confession but moved outside of the state afterward. Hence, if the defendant did not reside in the state of New York when the COJ was executed or at the time of filing, the new law prohibits the county’s clerk from entering judgment against the defendant.
Even though a COJ can be a useful tool in terms of avoiding litigation and may appear at first like a good option, debtors should proceed with great caution before moving forward with executing one. If you are one of the millions of consumers in the U.S. struggling with mounting debt, seeking professional advice before committing to any legally binding action is always in your best interests.
[2] Current, revised version (following 2005 amendments) available at: https://www.uniformlaws.org/committees/community-home?CommunityKey=e70884d0-db03-414d-b19a-f617bf3e25a3
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