What is a Confession of Judgment?

A confession of judgment is an agreement or a contract in which the defendant in the lawsuit agrees to take on the amount of liability and damages that both parties earlier agreed on. A defendant that signs a confession of judgment has forfeited his right to argue or conflict claims such as liability claims and damages that the other party may place in the future. Usually, a confession of judgment allows a party enter a judgement against another. It is a method often used by parties to bypass lengthy court proceedings and thorough legal procedures. In certain cases, a confession of judgment can be described invalid because it does not follow due court process.

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How is a Confession of Judgment Used?

A confession of judgment can be likened to a cognovit note in which a defendant acknowledges the claims of the plaintiff and pays a certain sum to waive defenses and lengthy court procedures. Parties who wish to avoid protracted litigation use confession of judgment, this prevents them from having a case dragging through the courts and being slowed down by may processes. In the case of a contract between a borrower and a lender, a confession of judgment allows a debtor or borrower settle all financial obligations to the lender, it is a cognovit note in which a debtor voluntarily agrees to pay the amount owed to the lender. If dispute the cognovit note, a borrower defaults, the lender can pursue a judgement against him without going through the court.

Different Ways a Confession of Judgment May Be Applied

There are diverse ways a confession of judgment can be applied, this vary from state to state. In many states, confessions of judgment can only be applied to commercial transactions and non-consumer debt. Many states however argue that confessions of judgment are bias and controversial as they do not give defendants a chance to present their defense. In Pennsylvania, confession of judgments can be used in commercial transactions or consumer dent and a borrower has the right to petition against the enactment of the judgement. Contracts between borrowers and lenders and business contracts often include confession of judgements. A lender can request confession of judgment from a borrower with poor creditworthiness, a supplier to a financially unstable firm can also require a confession of judgment.