Confession of Judgment Clauses in Merchant Cash Advance Agreements: Where They Are Still Enforceable in 2026 and How to Negotiate One Out

A confession of judgment merchant cash advance clause can permit a creditor to obtain a judgment without the ordinary lawsuit process if the authorization is legally valid. Enforceability varies sharply by jurisdiction and contract structure, and New York materially changed its rules in 2019. 

Before signing, examine governing law, venue, business residence, the personal guarantee, and the exact COJ wording—and negotiate deletion or a safer substitute before execution.

Question	Practical answer
What does a COJ do?	It may authorize entry of judgment without the ordinary pre-judgment lawsuit sequence.
Is it enforceable everywhere?	No. Commercial COJ law and court procedure vary significantly by state.
What changed in New York?	CPLR §3218 now ties filing to the defendant’s qualifying county of residence rather than allowing a nonresident simply to designate a New York county.
Does governing law automatically decide everything?	No. Venue, statutory filing rules, jurisdiction, residence, execution requirements, and public policy may separately matter.
Can it reach an owner personally?	Only if there is a legal basis for personal liability, such as a valid guarantee or separate confession executed by that owner.
Is a UCC-1 the same thing?	No. A UCC-1 is a financing-statement filing, not a money judgment.
Can the COJ be negotiated out?	Yes, if the funder agrees and the removal is reflected in every final execution document.
What if one was already signed?	Determine whether a judgment has actually been filed and review the relevant state’s challenge procedure immediately.

What a Confession of Judgment Merchant Cash Advance Clause Actually Does

A confession of judgment is a procedure through which a debtor authorizes entry of judgment without requiring the creditor to first complete the normal complaint-answer-discovery-trial sequence.

Depending on the jurisdiction and document, similar authority may appear under names such as cognovit, warrant of attorney, judgment by confession, or a pre-signed judgment affidavit. The terminology matters because each state’s law defines its own permitted procedure and required formalities.

In practical terms, a valid confession of judgment merchant cash advance provision can change when a merchant gets the opportunity to raise defenses. Instead of litigating those defenses before judgment, the merchant may have to seek relief after the judgment has already been entered.

That does not mean signing a COJ permanently eliminates every possible defense.

Some jurisdictions expressly provide procedures for opening, striking, reducing, modifying, vacating, or staying a confessed judgment. 

Pennsylvania Rule 2959, for example, provides a petition procedure to seek relief from a confessed judgment, while Virginia Code §8.01-433 permits certain confessed judgments to be set aside or reduced through a motion filed within the statutory period following notice.

That distinction is crucial:

1. A COJ may waive or compress the normal opportunity to defend before entry of judgment.
2. Applicable law may still provide ways to challenge the judgment after entry.

A careful MCA contract review before signing should therefore examine not only whether a COJ appears, but what the chosen jurisdiction actually permits.

Ordinary Lawsuit vs Confession-of-Judgment Process

Stage	Ordinary contract lawsuit	Valid COJ process
Complaint filed	Ordinarily begins the action	May be replaced or materially shortened by the state’s confession procedure
Pre-judgment notice	Defendant normally receives process before judgment	Judgment may sometimes be entered before the usual opportunity to litigate
Answer and defenses	Normally presented before judgment	Depending on state law, some issues may instead be raised in a post-entry motion or petition
Judgment timing	After default, dispositive ruling, settlement, or trial	Potentially much earlier if all statutory and contractual requirements are satisfied
Post-judgment remedies	Appeals, stays, exemption claims, enforcement challenges and other procedures may apply	State law may permit opening, striking, reducing, modifying, vacating, or staying the confessed judgment

This is why a COJ clause MCA contract cannot be evaluated from the contract language alone. The court procedure is part of the analysis.

Why New York Changed the Confession-of-Judgment Landscape in 2019

New York became closely associated with MCA confessions because CPLR §3218 permits a judgment by confession to be entered without an ordinary action when the statutory requirements are satisfied.

The Legislature changed that framework in 2019 after concerns arose about creditors using New York confession procedures against businesses with no meaningful New York connection.

Senate Bill S6395 was signed by the governor on August 30, 2019, as Chapter 214 of the Laws of 2019. The legislation took effect immediately and applied to judgments by confession entered on affidavits filed on or after the effective date.

The sponsor memorandum specifically described the legislation as an effort to address use of New York confessions against out-of-state debtors and to restrict filing to debtors with an in-state residence connection.

What Current New York CPLR §3218 Actually Requires

The current statute remains on the books.

Under New York CPLR §3218(a), the defendant’s affidavit must, among other things:

• state the sum for which judgment may be entered;
• authorize entry of the judgment;
• state the county where the defendant resides;
• concisely state the facts giving rise to money due or to become due and show why the confessed sum is due, where applicable.

CPLR §3218(b) then provides that the affidavit may be filed within three years after execution, but only with the clerk of the county where the affidavit stated the defendant resided when executed or where the defendant resides when the confession is filed.

Most importantly for business entities, the current enacted statute states:

for purposes of §3218, a non-natural person resides in any county where it has a place of business.

The statute therefore says “a place of business,” not merely “principal place of business.”

That distinction should be preserved in any 2026 article discussing the New York confession of judgment ban out-of-state issue.

The 2019 sponsor memorandum described the proposal using “principal place of business,” while the enacted and current CPLR §3218 states that a non-natural person resides in any county where it has “a place of business.” For a 2026 enforceability analysis, the enacted statutory text is the controlling language to quote and apply.

Commercial confession-of-judgment rules are highly state-specific and can turn on the exact documents, parties, venue, and facts. Businesses facing an existing COJ or judgment should have counsel licensed in the relevant jurisdiction review the agreement and docket.

Do Not Call It a Blanket “New York COJ Ban”

Common statement	More accurate explanation
“New York banned COJs.”	Incorrect as a general statement. CPLR §3218 remains in force and still provides a judgment-by-confession procedure.
“New York banned out-of-state MCA businesses from signing New York contracts.”	That is not what CPLR §3218 says. The statute regulates the confession procedure and filing location; it is not a general prohibition on New York commercial contracts.
“Selecting New York law solves the residence problem.”	No. Contractual governing law does not erase the statutory filing requirement in CPLR §3218.
“The funder’s New York office determines venue.”	Not under §3218. The provision focuses on the defendant’s qualifying residence.
“An LLC must have its headquarters in New York.”	The current text says a non-natural person resides in any New York county where it has a place of business.

Under the current text of New York CPLR §3218, the defendant’s affidavit and county of residence directly affect where a confession may be filed. The official legislative record for S6395 shows how the 2019 amendment removed the former mechanism that allowed a nonresident debtor to designate a New York county for filing.

Confession of Judgment States in 2026: Why There Is No Reliable One-Line List

A list claiming that certain “confession of judgment states” simply allow COJs and others do not is usually too crude to use for an MCA agreement.

The answer may depend on:

• commercial versus consumer purpose;
• whether the debtor is a natural person or an entity;
• where the debtor resides;
• where the instrument was executed;
• whether the state recognizes a warrant of attorney;
• mandatory warning language;
• affidavit requirements;
• the court with subject-matter jurisdiction;
• statutory venue restrictions;
• whether the creditor seeks only entry of judgment or immediate execution;
• the wording and scope of the guarantee;
• local procedural rules;
• whether the purported obligation is legally capable of supporting a confession.

For that reason, the following table is deliberately a representative state comparison, not an unverified 50-state survey.

2026 Representative State Rules

State	Commercial COJ status in 2026	Important conditions or restrictions	Primary authority	Verified
New York	Judgment by confession remains expressly authorized	Defendant affidavit required; filing tied to defendant residence; business entity resides in a county where it has a place of business	CPLR §3218	Oct. 2, 2026
Ohio	Commercial cognovit/warrant-of-attorney procedure remains recognized	Strict venue rules, production of warrant, post-entry notice, conspicuous statutory warning; consumer warrants are invalid	Ohio Rev. Code §§2323.12–2323.13	Oct. 2, 2026
Pennsylvania	Commercial confession procedure remains expressly recognized	Pa. R.C.P. Chapter 2950 governs; natural-person consumer credit transactions are excluded; formal complaint and instrument requirements apply	Pa. R.C.P. 2950–2967	Oct. 2, 2026
Illinois	Statute continues to recognize confession for bona fide debt	Confession venue is statutorily restricted; a judgment entered outside the authorized counties lacks force under subsection (c)	735 ILCS 5/2-1301(c)	Oct. 2, 2026
Maryland	Court rules retain a confessed-judgment procedure	Written instrument, complaint, affidavit, judicial review and post-entry notice/challenge procedure apply; consumer restrictions require separate analysis	Md. Rule 2-611; Rule 3-611	Oct. 2, 2026
Virginia	Statutory confession procedure remains expressly recognized	Detailed statutory procedure, prominent warning requirement and statutory post-notice challenge mechanism	Va. Code §§8.01-431 through 8.01-440	Oct. 2, 2026

Ohio: Commercial Cognovit Authority Exists, but Formalities Are Strict

Ohio Revised Code §2323.13 requires the creditor’s attorney to produce the warrant of attorney when confessing judgment.

The statute also limits where the judgment may be confessed. Depending on the facts, the permitted court is tied to the maker’s residence or where the maker signed the warrant. The statute expressly says these restrictions apply notwithstanding contrary contractual language.

Ohio also requires a conspicuous statutory warning immediately above or below the signature area. Section 2323.13 states that a warrant lacking the required warning is invalid for instruments covered by the provision. Consumer warrants to confess judgment are separately made invalid.

Ohio’s warrant-of-attorney requirements in Ohio Revised Code §2323.13 address filing location, production of the warrant, required warning language, and the separate treatment of consumer cognovit provisions. Those formalities are why an Ohio COJ analysis cannot stop at finding a cognovit sentence in the contract.

Pennsylvania: Commercial and Consumer Treatment Must Not Be Confused

Pennsylvania Rule of Civil Procedure 2950 defines a confession action as a proceeding based on an instrument authorizing confession other than an instrument executed by a natural person in connection with a consumer credit transaction.

The same chapter contains the procedure for the complaint, entry of judgment, execution and relief from the confessed judgment.

Rule 2959 provides the principal petition mechanism for seeking to strike or open a confessed judgment and includes specific timing rules where the notice described in the confession rules has been served.

Pennsylvania’s judgment-by-confession rules in Chapter 2950 separately address the filing procedure, notice, execution, and relief from judgment. That procedural framework also expressly distinguishes qualifying confession actions from natural-person consumer credit transactions.

Illinois: The Statutory Venue Rule Is Not Optional Contract Language

Illinois Code of Civil Procedure §2-1301(c) states that, subject to the limitations in that subsection, a person may confess judgment for a bona fide debt without ordinary process.

It then restricts the application to specified counties connected to execution of the obligation, residence of a defendant, or property of a defendant. The statute says a judgment entered in another county has no force or validity despite language in the power to confess.

That is a useful example of why merely finding a broad forum-selection clause in a COJ clause MCA contract does not end the analysis.

Maryland: Court Review Is Built Into the Current Procedure

Maryland Rule 2-611 governs confessed judgments in circuit court. Official Maryland rule materials provide for a complaint supported by the written instrument and affidavit and require the court to determine whether the papers provide a factual and legal basis for the confessed judgment before directing entry.

Maryland appellate materials also describe Rule 2-611 as allowing a defendant to move to open, modify, or vacate a confessed judgment and requiring the court to determine whether there is a substantial and sufficient basis for an actual controversy on the merits.

Maryland therefore should not be summarized as “automatic judgment upon filing.”

Virginia: Warning Language and a Defined Post-Notice Remedy Matter

Virginia Code §8.01-432 permits confession of judgment even when no suit is pending.

But Virginia also requires qualifying instruments containing a confession provision to carry a prominent statutory notice warning that the provision waives important debtor rights and can permit judgment without further notice.

Virginia Code §8.01-433 further provides a specific mechanism under which a judgment confessed under §8.01-432 may be set aside or reduced on qualifying grounds through a motion made within 21 days following notice of the judgment.

Virginia places its confession procedure, required instrument language, recording rules, and post-judgment relief provisions together in the Virginia Code provisions governing judgments by confession. That makes the statutory formalities part of the enforceability analysis, not merely contract-drafting details.

Governing Law and Venue Matter — But They Do Not Automatically Control Everything

A governing-law clause identifies which jurisdiction’s substantive law the contract says should govern the agreement.

A forum-selection clause identifies the court system or jurisdiction designated for disputes.

A venue clause may narrow that further to a particular county or locality.

A confession-of-judgment authorization is the debtor’s contractual authorization for the special judgment procedure.

These concepts overlap, but they are not interchangeable.

Example: Florida Merchant, New York Funder

Assume a Florida LLC signs a merchant cash advance contract with a New York company.

The contract states:

• New York law governs;
• disputes should be heard in New York;
• the agreement contains a confession of judgment merchant cash advance clause;
• the business has no New York office or other New York place of business.

A reader should not conclude from the governing-law clause alone that a New York confession can be filed.

Current CPLR §3218(b) independently restricts where the affidavit may be filed and defines where a non-natural defendant resides for this specific procedure.

If instead that Florida LLC maintains an actual place of business in a New York county, the statutory analysis changes. That still does not mean the confession is automatically valid; the affidavit, amount, authorization, contract structure and other legal requirements must still be reviewed.

This illustrates why a pre-signing MCA review must separate governing law, forum selection, venue, residence and judgment authority.

COJ vs Personal Guarantee vs UCC-1: Three Different Risk Layers

Merchants sometimes treat a confession, guarantee and UCC filing as though they all mean “the funder can take my assets.” That oversimplifies three different legal mechanisms.

Provision	What it does	Who or what may be exposed	Does it itself create a judgment?
Confession of judgment	Authorizes an expedited judgment procedure where legally valid	The person or entity that validly executed the confession authority	It can lead to entry of judgment through the authorized procedure
Personal guarantee	Creates contractual liability for the guarantor to the extent stated in the guarantee and allowed by law	The guarantor, depending on triggering language and defenses	No
UCC-1 financing statement	Gives public notice relating to a claimed security interest and may play a role in perfection and priority	Collateral governed by the security agreement and Article 9	No

Confession of Judgment

The confession is primarily a procedural enforcement device.

A confession of judgment merchant cash advance provision does not by itself answer whether the claimed amount is correct, whether a default actually occurred, whether acceleration is permitted, or whether the state procedure was followed.

Those may become separate legal issues.

Personal Guarantee

A merchant cash advance personal guarantee addresses potential personal liability.

Some guarantees are broad. Others are triggered only by specified conduct or events. The actual text matters.

A judgment entered solely against a corporation or LLC does not automatically make the shareholder, member, officer, or manager personally liable.

Personal assets become relevant only if there is an independent basis for liability against the individual—for example, an enforceable personal guarantee or a judgment entered against that person—and even then applicable exemptions and enforcement law still matter.

UCC-1 Financing Statement

A UCC-1 financing statement is not a judgment and does not itself transfer ownership of a merchant’s entire business or bank account.

It is part of the Article 9 public-notice and perfection framework associated with a claimed security interest.

A UCC-1 should also be reviewed in the context of existing financing because UCC filings can reveal prior funding positions and potential MCA stacking exposure. That information can affect later underwriting, refinancing, priority questions, and whether additional financing could violate an anti-stacking provision.

That internal article is particularly useful when the agreement also contains restrictions on later financing because multiple funding positions and UCC filings can create a separate underwriting and default analysis.

What Happens First After an Alleged Default?

There is no universal sequence, but an illustrative path can look like this:

1. A contractual event occurs that the funder alleges constitutes default.
2. Any notice-and-cure requirement in the agreement becomes relevant.
3. The funder calculates the amount it claims is due under the default and acceleration provisions.
4. The funder attempts to invoke the confession provision where the governing procedure permits it.
5. A court or clerk follows the applicable state’s confession procedure.
6. If judgment is validly entered, post-judgment enforcement mechanisms may become available.
7. The debtor may have state-specific procedures for challenging or staying the judgment.

ACH debits, receivables instructions, security interests, guarantees, processor directions and other contractual remedies may operate separately. They should not be treated as merely different names for the COJ.

Real-World Contract Example: Five Clauses, Five Separate Questions

Consider a hypothetical Ohio restaurant company that receives an MCA from a financing company.

Its documents contain:

• a New York governing-law clause;
• an Ohio forum provision for certain enforcement actions;
• a warrant of attorney;
• a personal guarantee signed by the restaurant owner;
• a UCC security agreement and authorization for a financing statement.

That contract presents at least five separate questions.

• Governing law: Which substantive law applies to contract interpretation?
• Venue: Which court can hear the particular enforcement proceeding?
• Warrant of attorney: Does it satisfy Ohio’s cognovit formalities, warning and filing-location requirements?
• Personal guarantee: What obligations did the owner actually guarantee, and what triggers the guarantee?
• UCC filing: What collateral is described in the underlying security agreement, and what role does the filing play in perfection or priority?

A merchant who looks only for the words “confession of judgment” may miss most of the actual enforcement package.

Contract Terms That Make a COJ More Dangerous

The most consequential risk often comes from the interaction between the COJ and the underlying definition of default.

One Failed ACH Debit

If a single failed debit creates immediate default, an ordinary cash-flow or banking problem may activate broader remedies.

A merchant should ask whether one failed payment is enough, whether intent matters, and whether a cure period exists.

Changing Bank Accounts

Some MCA contracts restrict moving deposits or changing the designated account without consent.

When that restriction sits beside an expedited judgment provision, a bank-account change can have consequences far beyond merely updating ACH instructions.

Failure to Provide Bank Statements

Reporting covenants may require statements or portal access.

The key question is whether late documentation is merely a contractual compliance issue or an immediate event of default.

Broad “Material Adverse Change” Language

A broadly worded material-adverse-change provision can create uncertainty over what event actually constitutes default.

That uncertainty becomes more consequential when the funder also holds confession authority.

Stacking and Additional Financing Restrictions

A later MCA or other financing transaction may breach anti-stacking language or trigger cross-default. Before taking another position, compare the contract’s additional-financing restrictions with existing UCC filings and the funding positions they may signal, because a second advance can create both underwriting and contractual-default issues.

Reconciliation Restrictions

If the MCA contains a reconciliation mechanism, the default section should be read alongside it.

A disagreement about bank access, revenue reporting or the merchant’s reconciliation request should not be assumed to have only payment-calculation consequences.

Acceleration

Acceleration language determines whether default allows the creditor to claim a substantially larger amount immediately.

A confession of judgment merchant cash advance clause becomes materially more consequential when it is paired with broad acceleration rights.

Default Fees, Collection Costs and Attorney Fees

The agreement may authorize fees or costs after default, but recoverability can depend on the contract and applicable law.

Do not assume every amount listed in a creditor’s demand automatically becomes part of an enforceable judgment.

Waiver of Notice

A notice waiver can reduce the opportunity to correct a technical breach before enforcement begins.

Review it together with any separate notice-and-cure provision.

Broad Personal Guarantee

A broad guarantee creates a different layer of exposure because it may give the creditor a separate contractual claim against the guarantor.

The guarantee should therefore receive the same level of scrutiny as the main MCA contract.

How to Negotiate a Confession of Judgment Merchant Cash Advance Clause Out Before Signing

The merchant’s practical leverage is ordinarily greatest before the documents are executed and before funding occurs.

1. Search Every Document

Search for:

• confession of judgment;
• judgment by confession;
• cognovit;
• warrant of attorney;
• confession affidavit;
• judgment affidavit;
• attorney-in-fact;
• waiver of notice;
• waiver of hearing;
• authority to enter judgment.

Do not search only the main agreement.

2. Ask for Complete Deletion

If the provision is unacceptable, ask the funder to remove it rather than merely promise not to use it.

A verbal statement or sales email does not revise contradictory contract text.

3. Check the Guarantee and Exhibits

A merchant can negotiate confession of judgment removal from the main agreement and still accidentally sign similar authority in:

• the personal guarantee;
• a rider;
• a separate affidavit;
• a notarized document;
• a promissory note;
• an exhibit.

Confirm all transaction documents.

4. Propose a Conventional Enforcement Structure

If the funder will not agree immediately, discuss a structure based on notice, cure and ordinary dispute resolution.

5. Require the Change in the Contract

The final execution version should contain the negotiated language.

Do not rely on a representation that conflicts with the PDF being signed.

6. Compare the Revised Version Line by Line

Save the original proposed contract.

Run a comparison against the final PDF and verify that deleted judgment language has not reappeared elsewhere.

7. Escalate Unresolved Provisions

Where a confession of judgment merchant cash advance remains alongside broad guarantees, acceleration, cross-default or substantial exposure, local legal review may be worthwhile before signature.

Specific Substitutions to Request

Possible negotiating alternatives include:

• ordinary contract litigation;
• arbitration where both parties accept its costs and limitations;
• written default notice;
• a negotiated 5-, 10-, or other business-day cure period;
• specifically enumerated default events;
• no acceleration for a promptly cured technical breach;
• narrower fee-shifting language;
• venue reasonably connected to the merchant;
• conventional enforcement instead of pre-authorized judgment.

Arbitration is not inherently safer.

Depending on the clause, it can provide a streamlined private process but may also involve significant fees, limited discovery and narrower appellate review. It should be evaluated rather than treated as an automatic improvement.

Sample Negotiation Language

“We can proceed with the financing if the confession-of-judgment provision and any related warrant of attorney or pre-signed judgment affidavit are removed. We are willing to discuss written notice of default, a reasonable cure period and an agreed dispute-resolution process instead.”

For a merchant with multiple credible funding options:

“Our business has stable deposits, limited existing obligations and alternative financing proposals. We are prepared to proceed on the agreed economics, but not with pre-authorized judgment. Please remove the COJ, cognovit or warrant-of-attorney authority from the agreement, guarantee, exhibits and any separate affidavit and provide a clean execution copy.”

These are practical negotiation scripts, not legal clauses.

What Negotiating Leverage Does a Well-Qualified Merchant Have?

Whether a funder will agree to negotiate confession of judgment removal is a commercial decision.

Negotiating leverage often starts with the same financial characteristics underwriters examine when deciding whether to approve and structure an MCA. Revenue consistency, bank-statement quality, existing advances, NSF activity, and operating history all affect MCA underwriting, so a merchant with a stronger risk profile may have more room to request changes to non-price terms.

Relevant factors can include:

• consistent monthly revenue;
• stable bank deposits;
• longer operating history;
• limited outstanding financing;
• low NSF or returned-payment activity;
• stable processing history where relevant;
• stronger owner credit where the underwriting model considers it;
• competing financing proposals;
• a conservative advance relative to revenue.

None of these factors guarantees that a funder will remove a COJ.

The merchant should compare the complete package instead of treating the COJ as the only relevant term:

Area	Questions to compare
Economics	Amount funded, purchased amount, factor economics and expected remittance
Payment structure	Daily, weekly or percentage-based remittance; reconciliation terms
Default	What events constitute default and whether intent matters
Cure	Whether notice is required and how long the merchant has to cure
Acceleration	What amount becomes due after default
Guarantee	Who signs personally and what conduct triggers liability
Security interest	What collateral the security agreement covers
Judgment procedure	Whether any COJ, cognovit or warrant remains
Dispute procedure	Forum, venue, arbitration or litigation
Fees	Attorney fees, default charges and collection costs

MCA Contract Review Before Signing: COJ Checklist

Before executing a confession of judgment merchant cash advance agreement, verify:

• Is there a “Confession of Judgment” heading?
• Does “cognovit” appear anywhere?
• Is there a “warrant of attorney”?
• Is a separate judgment affidavit being signed?
• Does an attorney-in-fact receive authority to confess judgment?
• Which entity is the debtor?
• Who signs individually?
• What law does the governing-law clause select?
• What forum does the forum-selection clause identify?
• What county does the venue provision name?
• Does the governing state’s COJ statute independently restrict venue?
• What events constitute default?
• Does a single failed ACH debit trigger default?
• Is there written notice?
• Is there a notice-and-cure period?
• Can the claimed obligation be accelerated?
• What attorney fees or collection costs can be claimed?
• Does the personal guarantee contain separate confession language?
• Does the agreement authorize a UCC filing?
• What collateral does the security agreement describe?
• Do any exhibits or riders contain additional judgment language?
• Does the final signed copy match the negotiated version?

A disciplined pre-signing MCA review should answer these questions from the actual documents rather than from a broker’s or salesperson’s summary.

What If You Already Signed a COJ?

The response should depend on the actual procedural stage.

1. Signed, but No Default Has Been Alleged

Preserve the complete executed package:

• MCA agreement;
• guarantee;
• security agreement;
• COJ or cognovit language;
• affidavits;
• riders;
• amendments;
• funding records.

Identify the governing-law, forum, venue, default, cure and judgment provisions while there is still time to understand them calmly.

2. Default Alleged, but No Judgment Is Known

Ask for the creditor’s written default position and amount calculation.

Preserve bank statements, ACH records, reconciliation requests, emails, text messages, payment history and notices.

Identify where a filing could legally occur rather than assuming the county printed in the contract necessarily controls.

3. Judgment Already Entered

Obtain:

• the court docket;
• complaint or application;
• confession affidavit;
• warrant of attorney if applicable;
• executed agreement;
• guarantee;
• judgment;
• amount calculation;
• proof of any notice or service.

Then identify the actual procedural remedy available in that jurisdiction.

Post-entry relief depends on the forum. Pennsylvania Rule 2959 provides the procedure for a petition to strike or open a confessed judgment, while Virginia uses its own statutory set-aside or reduction procedure and Maryland follows its confessed-judgment court rules. 

A merchant should therefore identify the actual court and governing procedure before relying on a generic list of possible COJ defenses.

These procedures are not interchangeable.

4. Collection or Enforcement Is Already Underway

Do not ignore a levy, execution, garnishment, restraint, sheriff notice or other court communication.

Enforcement can introduce separate deadlines and exemption questions beyond whether the original confession was valid.

Monitoring Court Dockets

Court-search systems vary by jurisdiction.

Start with:

• the forum named in the contract;
• the county connected to the statutory confession rule;
• the business’s residence or place of business where relevant;
• any case number supplied by the funder or its attorney.

For Maryland, for example, the state judiciary operates an official Judgments and Liens Search that permits searches involving companies and individuals.

Avoid assuming that a private docket aggregator is more complete or authoritative than the court’s own records.

Can a COJ Judgment Be Challenged After Entry?

Potentially. Signing a confession does not support the universal statement that “nothing can ever be challenged.”

The permitted grounds and procedure vary.

Issues may include:

• failure to comply with the governing confession statute or rule;
• improper venue;
• lack of subject-matter or personal jurisdiction where relevant;
• defective affidavit;
• defective warrant of attorney;
• missing mandatory warning language;
• absence of authority to execute the confession;
• facial defects in the filed papers;
• disagreement over the amount actually due;
• payment or satisfaction;
• fraud, duress or other recognized grounds where the jurisdiction permits them;
• failure to satisfy procedural notice requirements.

The available remedy also varies.

Pennsylvania distinguishes petitions to strike and open. Maryland speaks in terms of opening, modifying or vacating. Virginia permits certain judgments under §8.01-432 to be set aside or reduced under §8.01-433.

A merchant should therefore avoid relying on generalized online lists of “COJ defenses.”

Questions to Send the Funder Before You Sign

1. Will you remove every confession-of-judgment provision from the transaction?
2. Is there any separate cognovit provision, judgment affidavit, warrant of attorney or power authorizing an attorney to confess judgment?
3. Does the personal guarantee contain a separate COJ?
4. What exactly happens after one failed ACH debit?
5. Which events create immediate default?
6. What written notice must be provided before enforcement?
7. How long is the cure period?
8. Does default accelerate the remaining purchased amount or another claimed balance?
9. What default fees, attorney fees or collection costs can be added?
10. Where would you file an ordinary contract action?
11. Where do you contend a confessed judgment could legally be entered?
12. What UCC filing will be made and what collateral does the underlying security agreement cover?
13. Does taking additional financing trigger default or cross-default?
14. Will every negotiated change appear in the agreement and guarantee?
15. Will you send a clean final execution PDF before signature?

These questions make an MCA contract review before signing more useful because they force the discussion away from labels and toward actual enforcement mechanics.

Frequently Asked Questions

Review a Confession of Judgment Merchant Cash Advance Clause Before You Sign

The safest time to analyze a confession of judgment merchant cash advance provision is before the contract is executed.

Start with the exact language—not the salesperson’s description. Identify every COJ, cognovit provision, warrant of attorney and judgment affidavit. Then confirm the current law of the jurisdiction that could actually be asked to enter the judgment.

Treat the governing-law clause and the venue clause as separate questions. New York’s current CPLR §3218 is a good example: selecting New York law does not eliminate the statute’s independent residence and filing requirements.

Next, inspect the merchant cash advance personal guarantee, UCC authorization, default triggers, notice-and-cure language, acceleration clause, stacking restrictions, attorney fees and collection costs.

If the confession of judgment merchant cash advance provision creates an unacceptable level of procedural risk, request deletion before signing and verify that the deletion appears everywhere in the final execution package.

That approach gives the merchant a much clearer answer than asking whether a state merely appears on an internet list of confession of judgment states: What exactly did I authorize, who is liable, what event triggers enforcement, which court can use the procedure, and what rights remain if a dispute occurs?