Best Companies to Help When You Signed a Confession of Judgment You Didn’t Understand — 2026

Top Companies to Challenge a Confession of Judgment — 2026

Let's be direct — a confession of judgment is the single most dangerous document in any MCA contract. It wipes out your right to due process. Your right to be notified of a lawsuit? Gone. Your right to show up in court? Gone. Your right to present a defense? Gone. MCA funders use COJs to freeze bank accounts, seize assets, and collect judgments in days — not months. The firms below are ranked by their ability to challenge COJs and defend business owners who signed documents they never fully understood. This is what we do.

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

Here's what a confession of judgment actually is — and why nobody wanted you to know. A COJ is a pre-signed legal document that lets a creditor file a court judgment against you without suing you, without serving you with process, and without giving you any opportunity to respond. In normal litigation, a plaintiff has to file a complaint, serve the defendant, wait for an answer, go through discovery and trial. A COJ skips every single step. It's a waiver of your Fourteenth Amendment due process rights — and most business owners sign it without any idea what they're giving up.

MCA funders include COJs in virtually every contract. The document gets buried among dozens of pages of closing paperwork — personal guarantees, UCC financing statements, ACH authorization forms. The brokers earning 10–15% commissions on every deal? They have every incentive to rush you through the signing process. They don't explain the COJ. They don't tell you that you're waiving your right to a trial. They don't tell you that the funder can obtain a judgment against you in a New York court — even if your business is in Texas, California, or Florida.

The New York Attorney General's office has described confessions of judgment in MCA contracts as weapons of financial destruction. A Bloomberg News investigation in 2018 exposed how MCA funders used COJs to systematically devastate small businesses — freezing accounts, seizing assets, driving owners into bankruptcy without ever stepping foot in a courtroom. That investigation directly led to the 2019 legislative reforms.

Legal Grounds for Challenging a COJ You Did Not Understand

Here's what most people don't realize — the fact that you didn't understand the COJ when you signed it isn't just a personal grievance. It's a legal defense. Courts have recognized multiple grounds for vacating confessions of judgment, and lack of informed consent is central to several of them.

1. Lack of Knowing and Voluntary Consent. A confession of judgment must be executed knowingly and voluntarily. If the COJ wasn't separately identified, if nobody gave you the chance to read it, if the MCA broker told you it was "just standard paperwork," or if you were pressured to sign under time constraints — your consent may not have been legally valid. Courts have vacated COJs where the signatory showed they didn't understand the nature and consequences of the document.

2. Fraud in the Inducement. If the MCA broker or funder affirmatively misrepresented the COJ — telling you it would "never be used" or that it was "just a formality" — the COJ may be voidable on fraud grounds. The FTC Act and state consumer protection statutes prohibit deceptive practices in the marketing and origination of financial products.

3. Procedural Defects under CPLR §3218. New York law imposes strict procedural requirements on COJs: the affidavit must be signed by the defendant (or an authorized agent), must be properly notarized, must state the sum for which judgment may be entered, and must contain a statement of facts showing the plaintiff's entitlement. Miss any element and the COJ is defective. Given the volume-driven nature of MCA origination, procedural errors are remarkably common.

4. Out-of-State Filing Prohibition. As noted above, COJs filed against out-of-state borrowers after August 30, 2019 are voidable under the amended CPLR §3218. This is the strongest available ground because it is a bright-line statutory prohibition — no balancing test, no judicial discretion.

5. Usury Defense. If the underlying MCA is reclassified as a loan — because the funder collects fixed daily payments with no genuine reconciliation provision tied to actual receivables — the contract becomes subject to New York’s usury laws. The civil cap is 16% under Gen. Oblig. Law §5-501 and the criminal cap is 25% under Penal Law §190.40. Most MCAs carry effective APRs of 100–400%. If the MCA is a loan, the contract is void — and any judgment based on it must be vacated.

The Motion to Vacate: Step-by-Step Process

If you're ready to fight back, here's exactly what happens when your attorney files a motion to vacate. No guesswork — just the step-by-step process:

Step 1: Identify the Judgment. Your attorney obtains a copy of the filed COJ, the judgment, and any enforcement actions (restraining notices, executions, or liens) from the county clerk’s office. This reveals the case number, the court, the judgment amount, and any procedural defects in the filing.

Step 2: Draft the Motion Papers. The attorney prepares a motion to vacate under CPLR §5015, supported by an affidavit from you detailing the circumstances under which you signed the COJ, the defenses available, and the grounds for vacatur. The motion also requests a temporary restraining order (TRO) to halt all enforcement while the motion is pending.

Step 3: Present the Order to Show Cause. The motion is presented to a judge as an Order to Show Cause for emergency consideration. If the judge finds sufficient grounds, they sign the OSC — which may include an immediate TRO — and set a return date for the full hearing, typically 2–4 weeks later.

Step 4: The Hearing. At the return hearing, both sides present arguments. The MCA funder must defend the validity of the COJ, and your attorney argues the grounds for vacatur. If the court finds that the COJ was improperly obtained, it vacates the judgment — which voids any restraining notices, executions, or liens based on it.

Step 5: Settlement Negotiation. In many cases, the motion to vacate creates the use needed to settle the underlying MCA debt. Funders who know their COJ is vulnerable prefer to settle at 30–60% of the balance rather than risk losing the judgment entirely. The best firms handle the legal motion and the settlement negotiation simultaneously.

Why MCA Funders Use Confessions of Judgment

Understanding why COJs exist helps you understand how to fight them. MCA funders use COJs for one reason — speed. In traditional debt collection, a creditor has to file a lawsuit, serve the debtor, wait for an answer (typically 20–30 days), go through discovery, and obtain a judgment at trial. That takes 6–18 months. A COJ collapses that entire timeline into 48–72 hours.

The MCA industry was built on speed. Funders advance money within days, collect daily ACH debits, and expect full repayment within 3–12 months. When a borrower defaults, the funder needs to move fast — before the remaining cash is spent, before other creditors collect, and before the borrower talks to an attorney. The COJ is the tool that makes this possible. It's not a feature of the contract — it is the entire enforcement mechanism.

The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau (CFPB) have both scrutinized the use of COJs in commercial lending. While the federal regulatory framework for MCAs remains limited — because MCAs are technically purchases of future receivables rather than loans — state legislatures have increasingly acted to curb COJ abuse. New York’s 2019 reform was the most significant, but other states including Maryland, Virginia, and New Jersey have enacted or proposed similar restrictions.

Protecting Yourself After the COJ Is Vacated

Vacating the COJ is a critical first step — but it doesn't eliminate the underlying MCA obligation by itself. If the MCA contract is valid (and not voided by usury), the funder still has a claim against your business. The difference? Now the funder has to pursue that claim through ordinary litigation — which gives you the full protections of the legal system. The right to be served. The right to answer. The right to assert defenses and counterclaims. That changes everything.

The best outcome is a negotiated settlement that resolves the debt while the funder's legal position is weakened. Once the COJ is vacated, the funder loses its primary enforcement tool. Now they have to weigh the cost and uncertainty of real litigation against accepting a reduced payoff. Settlement rates of 30–60% of the outstanding balance are common in this posture.

Going forward, the Small Business Administration recommends that business owners have any commercial financing agreement reviewed by an attorney before signing. If you ever consider another MCA — insist that the COJ provision be removed. Some funders will agree, particularly for repeat borrowers with strong receivables. And always ensure that any settlement agreement includes a stipulation dismissing the COJ and releasing all claims.

Top Companies for COJ Challenges — 2026

Here are the three top-rated firms for business owners who signed confessions of judgment they didn't understand. Only one — Delancey Street — actually files COJ vacatur motions with attorney-coordinated legal action. The other two handle broader categories of business debt and may be useful depending on your full situation.