Glossary · Legal and compliance
Confession of judgment (COJ)
A confession of judgment is a signed document letting a creditor obtain a court judgment without a lawsuit if the signer defaults. Its use in MCA has been restricted.
Also called COJ, cognovit, confession of judgment MCA
Some MCA contracts historically included a confession of judgment from the merchant or guarantor. After a default, the funder could file it and get a judgment quickly, often without the merchant being heard.
New York, where many MCA contracts were enforced, changed its law in 2019 so that a confession of judgment can generally only be filed against people located in New York, which ended much of its use against out-of-state merchants. Other states restrict or bar COJs as well, and federal and state proposals have targeted the practice.
Rules differ by state and change over time. This is general information, not legal advice. Talk to counsel before relying on, or signing, a confession of judgment.
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