5 Steps to Take the Day Your MCA Company Files a Confession of Judgment
The judgment was entered without your knowledge. The response must be filed with your full attention.
A confession of judgment is a pre-signed document that allows the funder to obtain a court judgment against you without filing a lawsuit, without notifying you, and without permitting you to defend yourself. The first indication you receive is typically a bank notification: your account has been restrained. Or a call from a vendor: a payment bounced. Or a letter from the county clerk's office, if you are fortunate enough to receive one before the bank freeze takes effect.
The judgment exists. It is not permanent. Here is what to do today.
Confirm the Judgment and Obtain the Filing Documents
Contact the court in which the judgment was entered (in most MCA cases, this is a New York county court). Request a copy of the judgment, the confession of judgment document, and the affidavit of default. These documents reveal the jurisdictional basis for the filing, the amount claimed, and the representations the funder made to the court.
Your attorney needs these documents. Obtain them today.
Retain an Attorney Who Has Filed Motions to Vacate
A motion to vacate a confession of judgment under CPLR 5015 is a specific procedural remedy with specific grounds: lack of jurisdiction, fraud or misrepresentation, excusable default, and the invalidity of the underlying agreement. An attorney who has filed these motions before understands the required showing, the evidentiary standards, and the timeline.
Courts in New York treat motions to vacate COJs with seriousness, particularly since the 2019 amendments restricting confessions of judgment for out-of-state businesses. If your business operates outside New York, the jurisdictional challenge may be dispositive.
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(212) 300-5196Move to Lift the Bank Restraint on an Emergency Basis
The bank account freeze is the immediate crisis. An attorney can file an emergency motion to lift the restraining notice while the motion to vacate the judgment proceeds. In cases we have handled, bank restraints have been lifted within three to five business days of filing.
The freeze feels permanent. It is not. But every day it remains in place is a day the business cannot process payroll, pay vendors, or cover essential expenses.
Document Everything
Preserve the bank statements showing the restrained balance. Preserve all communications from the funder and its counsel. Note the date you first learned of the judgment (this date is relevant to the timeliness of the vacatur motion). Document any representations the funder made about the confession of judgment at the time of signing.
Todd Spodek
Lead Attorney & Founder
Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.
The funder filed on a Tuesday. The attorney filed on Wednesday. The restraint was lifted by the following Monday.
Do Not Contact the Funder Directly
The funder obtained a judgment. It has no incentive to negotiate with you directly when it holds the enforcement power of a court order. Any communication you initiate without counsel is a concession without leverage. An attorney's motion to vacate, filed promptly, is leverage.
The confession of judgment was designed to end the dispute before it began. The motion to vacate reopens it. The reopening changes everything.
