![]() This is another reason utmost caution must be used before agreeing to a confession of judgment. However, the creditor/plaintiff has the ability to submit the judgment to the Court without notice to the debtor/defendant, without a hearing, and without an opportunity to defend. A Confession of Judgment can be signed and used as part of a payment plan. Does a Confession of Judgment have to be immediately filed with a Court? However, extra caution must be used in such circumstances to make sure that the judgment only becomes effective if, and only if, the contingency occurs.ĩ. California allows for confessions of judgment based on contingent liabilities. ![]() Can Confessions of Judgment be signed for “contingent” liabilities? The debtor’s attorney will then review it for accuracy.Ĩ. Generally speaking, the attorney for the creditor will draft the statement that the debtor needs to sign. (4) Show that the confessed amount is justly due. (3) Concisely state the facts out of which the debt became due and (2) State the exact amount of the judgment ![]() (1) Authorizing the Court to enter a judgment against the debtor/defendant (4) Sign a certificate stating that attorney has done all of the above. (3) Affirmatively advise the debtor/defendant to proceed with the confession of judgment procedure and (2) Advise the debtor/defendant with respect to the rights and defenses that are waived when the debtor/defendant signs the judgment (1) Review and examine the proposed judgment Accordingly, if the underlying obligation supporting the confession of judgment falls into a restricted category, then the confession of judgment is likely not dischargeable as well.īecause confessions of judgment are only appropriate in limited circumstances, California requires the involvement of an independent attorney to review the debtor’s situation and ensure that the debtor has a clear understanding of the consequences of signing a confession of judgment, including waiving the debtor’s rights to dispute the debt. Most notably, most consumer debts are dischargeable in bankruptcy, Note, however, that certain debts, including but not limited to child support and alimony, mortgages, criminal fines, are not typically discharged in bankruptcy. ![]() Some confessions of judgment are eligible to be discharged in bankruptcy. Are some confessions of judgment dischargeable in bankruptcy? Generally speaking, unless the confession of judgment was obtained by fraud, you’re stuck with it.Ĥ. A debtor loses the ability to argue to a judge or jury that they do not owe the amount of the confessed judgment. The disadvantage of a confession of judgment is that a valid and filed confession of judgment is final and binding. What Is the Disadvantage of Agreeing to a Confession of Judgment? As such, a confession of judgment might actually limit a debtor’s financial exposure.ģ. In some instances, those costs could easily run into the tens of thousands of dollars. If a contract contains a provision for attorneys’ fees and a lawsuit is filed, not only might a debtor end up with a judgment for the amount of the contract, but could also be liable for the creditor’s attorneys’ fees and litigation costs. Accordingly, a confession of judgment can buy a debtor time to pay off a debt.Īnother advantage of agreeing to a confession of judgment is theĪvoidance of the time and expense of litigation. If the debtor pays off the debt as agreed, the confession of judgment is never filed. In such a situation, the confession of judgment is not actually filed in court unless and until the debtor defaults on the payments. What Are the Advantages of Agreeing to a Confession of Judgment?Ĭonfessions of judgment are usually signed as part of a settlement agreement that provides for the debtor to pay off the debt over time. The judgment only takes effect if it is eventually filed in court, however, if it is filed, it can be used as a basis to start collection proceedings against the debtor, including the garnishment of wages.Ģ. Although no lawsuit is filed, a confessed judgment has the exact same legal effect as a judgment by a judge or jury. A confession of judgment is a process whereby a creditor asks a debtor to agree to sign a legally binding monetary judgment against the debtor.
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