Best Lawyers to Challenge a Confession of Judgment — 2026

Top COJ Defense Firms — 2026

If an MCA funder filed a COJ against you, you need attorneys who understand both the procedural requirements of CPLR §3218 and the substantive defenses that can void the underlying MCA contract. These are the three best firms for business owners facing COJ enforcement in 2026. Your search is over.

What Is a Confession of Judgment — and Why Is It So Dangerous?

Here's what happened to you — and to thousands of business owners just like you. When you signed the MCA agreement, you also signed a separate affidavit — typically buried in the paperwork — that authorizes the funder to enter a court judgment against you and your business without filing a lawsuit, without serving you with process, and without giving you an opportunity to be heard. The funder simply files the affidavit with a county clerk (almost always in New York), and a judgment is entered instantly.

The consequences are immediate and devastating. Once the judgment is entered, the funder serves a restraining notice under CPLR §5222 on your bank, freezing every dollar in your accounts. They can also file an income execution under CPLR §5232 to garnish business receivables. Business owners typically discover the COJ when payroll bounces, vendor payments fail, or their bank notifies them that the account is frozen. By that point, the funder has already obtained the judgment days or weeks earlier.

The MCA industry has used confessions of judgment as its primary enforcement mechanism for over a decade. Before the 2019 reforms, funders routinely filed COJs against out-of-state business owners in New York — forcing them to hire New York counsel to fight a judgment in a court they never agreed to appear in. A Bloomberg investigative series exposed the practice in 2018, triggering legislative action at both the state and federal level.

CPLR §3218: The Statute That Governs Confessions of Judgment

This is your weapon. New York's Civil Practice Law and Rules §3218 is the statutory framework governing confessions of judgment — and most COJ challenges begin with procedural defects. Here's the thing about CPLR §3218: it's strict. And most MCA funders cut corners. The statute requires:

1. Sworn Affidavit by the Defendant. The confession must be in a written affidavit signed by the defendant (the business owner or guarantor). The affidavit must be notarized and contain the defendant’s acknowledgment that they are authorizing entry of judgment against them.

2. Statement of the Sum. The affidavit must state the specific sum for which judgment may be entered. If the amount is left blank, calculated incorrectly, or inflated beyond what the contract authorizes, the COJ is defective. MCA funders frequently overstate the amount owed by failing to credit payments already received or by adding unauthorized fees.

3. County of Residence or Office. The affidavit must state the county in which the defendant resides or, if a corporation, where it has a principal office. This is where the 2019 reforms became critical — because CPLR §3218(a)(1) now requires that the defendant actually be located in New York for the COJ to be filed here.

4. Concise Statement of Facts. The affidavit must concisely state the facts out of which the indebtedness arose. Boilerplate language that merely recites the existence of a contract without specifying the actual default may be insufficient under the statute’s specificity requirements.

5. Attorney Affirmation (for amounts over $5,000). For any confession exceeding $5,000, an attorney must submit a separate affirmation certifying that they have personally reviewed the facts and that the confession is not being taken to secure a default judgment without a bona fide basis. This requirement is frequently ignored by MCA funders who rely on high-volume filing operations with minimal attorney oversight.

The 2019 Out-of-State COJ Ban: A Game-Changer for Business Owners

Before 2019, MCA funders exploited New York’s confession of judgment procedure against business owners nationwide. A restaurant owner in Texas, a contractor in Florida, or a retailer in California would sign an MCA with a New York choice-of-law clause — and months later discover that a New York county clerk had entered a judgment against them for tens or hundreds of thousands of dollars. The business owner would then need to hire a New York attorney to fight the judgment, adding legal fees on top of the MCA debt.

In 2019, the New York legislature enacted reforms that fundamentally changed this dynamic. The amended CPLR §3218(a)(1) now provides that a confession of judgment may only be filed in New York if the defendant is a New York resident or has a principal office in the state. Any COJ filed against an out-of-state defendant after August 30, 2019 is void and subject to immediate vacatur.

At the federal level, the FTC prohibited the use of confessions of judgment in business opportunity sales and has pursued enforcement actions against companies that use COJs as part of deceptive trade practices. The Small Business Administration has also issued guidance warning business owners about MCA contracts containing confessions of judgment.

Despite these reforms, some MCA funders continue to file out-of-state COJs — either because they are unaware of the law, or because they calculate that most business owners will not challenge the filing. This is why having an attorney who knows the 2019 reforms is critical. A motion to vacate an out-of-state COJ filed after August 2019 is virtually guaranteed to succeed.

How Attorneys Vacate a Confession of Judgment: Step by Step

The vacatur process follows a specific procedural path under New York law. Here is how experienced COJ defense attorneys approach it:

Step 1: Emergency Bank Freeze Relief. If the business owner’s bank account is already frozen, the first priority is emergency relief. The attorney files an order to show cause in the county where the judgment was entered, seeking an immediate stay of enforcement and dissolution of the restraining notice. Courts treat these motions as emergencies and will typically schedule a hearing within 48–72 hours. The attorney must demonstrate either a procedural defect in the COJ or a meritorious defense to the underlying claim.

Step 2: Motion to Vacate. The formal motion to vacate is filed under CPLR §5015(a), which provides several grounds for relief from a judgment: (1) excusable default, (2) newly discovered evidence, (3) fraud, misrepresentation, or other misconduct, (4) lack of jurisdiction, or (5) the judgment is void on its face. For COJs, the most common grounds are that the confession is procedurally defective under §3218 or that the underlying contract is void as usurious under NY Penal Law §190.40.

Step 3: Challenge the Underlying Amount. Even if the COJ is procedurally valid, attorneys challenge the amount. MCA funders routinely inflate COJ amounts by failing to credit payments, adding unauthorized default fees, or applying the full contracted purchase amount without deducting prior remittances. Under CPLR §5015, a judgment entered for an amount exceeding what is actually owed is subject to modification or vacatur.

Step 4: Assert Substantive Defenses. The vacatur motion includes all available defenses to the underlying MCA contract: usury (the contract is void because it carries an effective APR exceeding 25% under NY Gen. Oblig. Law §5-501), unconscionability (the terms are so one-sided that enforcement shocks the conscience), fraud in the inducement (the funder misrepresented material terms), and breach of the implied covenant of good faith (the funder interfered with the merchant’s ability to perform).

Step 5: Settlement Leverage. In many cases, filing the vacatur motion creates powerful settlement use. The funder faces the prospect of losing the judgment entirely — and the discovery process will expose its collection practices, underwriting methods, and treatment of reconciliation requests. Most funders prefer settling at 30–60% of the outstanding balance rather than litigating a vacatur motion that could set a negative precedent for their entire portfolio.

Due Process Challenges: The Constitutional Argument Against COJs

Beyond the procedural requirements of CPLR §3218, confessions of judgment raise serious constitutional due process concerns. The Fourteenth Amendment guarantees that no person shall be deprived of property without due process of law. A confession of judgment allows deprivation of property (frozen bank accounts, levied assets) without the fundamental due process protections of notice and an opportunity to be heard.

Federal courts have addressed this tension in the context of commercial transactions. In D.H. Overmyer Co. v. Frick Co., 405 U.S. 174 (1972), the Supreme Court held that a confession of judgment clause can be valid if the waiver of due process rights was voluntary, knowing, and intelligent. But the Court emphasized that the analysis must be case-specific — and that a COJ obtained through a standard form contract, without meaningful negotiation, in a transaction with unequal bargaining power, may not satisfy the voluntary waiver standard.

MCA contracts are precisely the type of adhesion contracts that raise Overmyer concerns. Business owners sign MCA agreements under financial distress, often without legal counsel, with no ability to negotiate terms. The COJ clause is buried in pages of dense legal language. The merchant has no meaningful understanding of what they are waiving. Defense attorneys increasingly argue that MCA confessions of judgment fail the voluntary, knowing, and intelligent waiver standard — making them constitutionally defective regardless of compliance with CPLR §3218.

The federal court system also provides removal options for business owners in states that do not have confession of judgment statutes. If a funder files a COJ in New York against a defendant who has a basis for federal jurisdiction (diversity of citizenship and amount in controversy exceeding $75,000), the defendant can remove the case to federal court, where the due process protections are more strong.

The Yellowstone Capital Precedent: Mass COJ Vacatur

The NY Attorney General’s $1.065 billion judgment against Yellowstone Capital in January 2025 was, among other things, the largest mass vacatur of confessions of judgment in history. The judgment required Yellowstone and its 25 affiliated companies to vacate all pending confessions of judgment filed against merchants nationwide. Thousands of COJs were vacated in a single enforcement action.

The Yellowstone case demonstrated several critical points for COJ defense: (1) Funders who systematically use COJs as collection tools are vulnerable to regulatory enforcement, not just individual challenges. (2) COJs tied to void underlying contracts (usurious MCAs) are themselves void and must be vacated. (3) The NY Attorney General’s office is actively policing MCA industry practices, including COJ abuse. (4) Courts are willing to order mass vacatur when the underlying scheme is found to be predatory.

For individual business owners, the Yellowstone precedent provides powerful ammunition in COJ vacatur motions and settlement negotiations. Defense attorneys cite Yellowstone to demonstrate that the legal system is moving aggressively against COJ abuse — and that funders who resist vacatur risk triggering the same type of enforcement action that destroyed Yellowstone Capital.

Common Defects in MCA Confessions of Judgment

Experienced COJ defense attorneys have identified patterns of defects that appear across the MCA industry. These are the most common grounds for vacatur:

1. Overstated Amount. The single most frequent defect. The funder files the COJ for the full contracted purchase amount minus a nominal credit for payments received — but fails to accurately credit all remittances. In cases involving daily ACH debits over months, the accounting can be off by thousands or tens of thousands of dollars. Any overstatement is grounds for vacatur or modification under CPLR §5015.

2. Out-of-State Filing (Post-2019). Any COJ filed against a non-New York defendant after August 30, 2019 violates CPLR §3218(a)(1) and is void as a matter of law. This is the easiest ground for vacatur and requires no substantive defense to the underlying claim.

3. Missing Attorney Affirmation. For confessions exceeding $5,000 (which includes virtually every MCA-related COJ), CPLR §3218 requires a separate attorney affirmation. High-volume funder operations frequently omit this requirement or use boilerplate affirmations that do not satisfy the statutory standard.

4. Defective Notarization. The defendant’s affidavit must be properly notarized. Defects include notarizations taken in states where the notary was not commissioned, notarizations without proper acknowledgment language, or notarizations that do not match the date of execution. The NY Department of State governs notary requirements, and any defect renders the confession invalid.

5. No Actual Default. The funder files the COJ claiming the merchant defaulted, but the merchant was current on payments or the alleged “default” was triggered by the funder’s own actions (e.g., changing the ACH debit amount without notice, debiting from a different account). If there was no actual breach of the MCA agreement, the COJ has no factual basis and must be vacated.

6. Void Underlying Contract. If the MCA contract is void — because it is usurious under NY Penal Law §190.40, or unconscionable under UCC §2-302 — then the confession of judgment derived from that void contract is also void. This is the most powerful substantive ground for vacatur because it eliminates the entire debt, not just the judgment.

How to Choose a COJ Defense Attorney

Not every attorney who claims MCA experience can effectively challenge a confession of judgment — and hiring the wrong one costs you time you don't have. Here are the four questions that separate the real COJ defense experts from everybody else:

1. Can you obtain emergency bank freeze relief? When your accounts are frozen, hours matter. A COJ defense attorney should be able to file an emergency order to show cause within 24–48 hours and obtain a hearing within 48–72 hours. If the attorney says relief will take weeks, they are not the right choice.

2. Do you know the 2019 CPLR §3218 reforms? The attorney should immediately ask where your business is located. If you are outside New York and the COJ was filed after August 2019, the case for vacatur is essentially automatic. An attorney who does not raise this issue unprompted does not specialize in COJ defense.

3. Can you attack both the procedure and the substance? The best COJ defense is multi-layered: procedural defects under CPLR §3218, plus substantive defenses to the underlying MCA contract (usury, unconscionability, fraud). An attorney who only attacks the procedure may vacate the COJ but leave you vulnerable to the funder filing a new lawsuit. An attorney who attacks both creates use to resolve the entire dispute.

4. What are the fees and when do you pay? Legitimate COJ defense firms charge reasonable fees with no upfront fees before delivering results. Any firm that demands large retainers before taking action — particularly when your bank account is already frozen — is not aligned with your interests. The FTC’s Telemarketing Sales Rule prohibits debt relief companies from collecting fees before settling or resolving the debt.

Top COJ Defense Firms — 2026

Here are the three firms we recommend for business owners facing confession of judgment enforcement in 2026. Your search is over. Only one — Delancey Street — offers true COJ defense with attorney-coordinated vacatur motions, emergency bank freeze relief, and multi-layered settlement use.