What you can still do after an MCA confession of judgmentThe affidavit, the frozen account, and the motion, 2026

After the judgment: how it was entered, what the affidavit had to say, and which moves are still available

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You authorized this years before the funder used it. The confession of judgment, called a cognovit in the older statutes, is the clause that lets a funder take judgment against you with no lawsuit filed, no process served and no defense heard. It sat among dozens of provisions in the agreement you signed the day the money landed. It was never negotiated. It was included.

It is the sharpest instrument the funder owns. It converts a payment disagreement into an enforceable judgment in the time a clerk needs to stamp a filing, and then the judgment does what judgments do: attaches as a lien, authorizes restraints on your accounts, and appears in every credit and lien search that follows.

How a clerk entered judgment without telling you

Default is whatever the funder declares it to be within the discretion the agreement reserves, and under agreements of this kind a single returned ACH debit or a dip in processing volume has been enough.

Once default is declared, the funder's attorney delivers an affidavit of confession to the court clerk. The affidavit attaches the confession you signed, states the amount claimed and describes the default. The clerk enters judgment. No judge weighs anything, no hearing appears on a calendar, and notice to you is not part of the procedure.

Notice the sequence. The declaration of default and the filing can happen the same week, and nothing in between requires the funder to talk to you, warn you, or answer a reconciliation request you already sent.

That is the whole mechanism. It is administrative, not adjudicative, and understanding that is what tells you where to aim. You are not appealing a decision. You are attacking a filing.

The frozen account is usually the announcement

For most owners the news arrives as a restraint on the operating account. Sometimes it is a letter from a sheriff or a marshal. Sometimes it surfaces in a lien search run by a lender, and nobody in your office had ever seen the judgment before that afternoon.

Check the amount immediately, because it will not match your own arithmetic. Entry carries the full remaining balance as the funder computes it, plus legal fees, collection costs, default penalties and whatever further charges the agreement managed to authorize. The arithmetic arrives at the courthouse pre-approved and unexamined.

That gap between the entered amount and any defensible balance is not a detail. It is one of the few things a court will look at once someone puts it in front of a judge.

Also check what the judgment attached to. A judgment lien reaches property in the county where it is docketed, and funders docket in more than one place when they know where you own things. A payoff negotiated without tracing every docketing leaves liens behind after the money is gone.

New York carried this trade, and then narrowed it

Funders across the country wrote New York venue into their agreements for years, because clerks there accepted confessions and entered them as routine regardless of where the borrower lived. In 2019 the legislature amended its civil practice rules to narrow the practice.

The practice survived, in a narrower form. Out-of-state defendants were removed from reach in consumer transactions. On the commercial side the cost of carelessness went up: the affidavit has to plead specific facts about the default, show the arithmetic behind the amount claimed and state the basis of the claim, with the purchase agreement and proof of default attached to the filing. Conclusory recitals no longer suffice.

This is jurisdiction-specific, and your agreement's venue clause decides which rules applied to your filing. Read the venue provision before you read anything else. It determines which court you are dealing with and what the funder's paperwork was required to contain.

What is still open after entry

Five things, and the last one is the one most files actually turn on.

1. The affidavit itself. Where a specific-facts standard applies, an affidavit that recites conclusions rather than pleading the default and showing the calculation is vulnerable. Get a copy of the filing and read what was actually sworn.
2. The amount. Fees, collection costs and default penalties stacked into the entered figure can be challenged on their own, separately from whether anything is owed at all.
3. The venue and the reach. Whether the court that entered it had any business doing so, given where you and the business are located and what the agreement said.
4. The underlying agreement. The reconciliation clause and whether the funder honored it. Recharacterization of the advance as a loan. Neither disappears because a clerk stamped a filing.
5. A negotiated resolution. A judgment is a collection tool, not collected money. An empty company pays a judgment holder nothing.

Timing is jurisdictional and unforgiving. Motions to vacate run on deadlines that vary by state and by court, and they start from entry rather than from the day you found out. That is the reason this is a this-week problem.

Why a funder with a judgment still settles

Because a judgment is paper until something is collected against it. A funder holding one against a business with restrained accounts, no reserve and live contract defenses is looking at a long enforcement effort with an uncertain end.

Settlements in this posture land in the same 40 to 70 percent band as anywhere else, and a file with a credible attack on the affidavit or on the reconciliation record lands nearer the bottom. What you are really negotiating is a package: a number, a satisfaction of judgment filed on the record, and termination of the UCC filings that came with the advance.

Get all three in the agreement. A payment made without a filed satisfaction leaves the judgment lien attached to your property and visible to every lender who searches.

What to do this week

In this order, starting today.

1. Get the court file. The affidavit of confession, the judgment as entered, and the amount with its itemization.
2. Read your venue clause and confirm which court and which rules governed the entry.
3. Assemble the payment history and every reconciliation request you sent, with the responses or the silence.
4. Deal with the restrained account before payroll. Know which accounts are frozen and which are not.
5. Get counsel on it now, because vacatur deadlines run from entry and nobody extends them for surprise.

This page is general information about how confessions of judgment operate in merchant cash advance agreements. It is not legal advice, and the rules differ by state and by contract. A licensed attorney in the relevant jurisdiction has to read your filing before anyone tells you what is possible in it.