A Confession of Judgment (f/k/a cognovit) is a legal term that refers to a clause in a contract that a party agrees that in the event of a default, the defaulting party agrees to the entry of judgment, without notice or a trial. Not every state permits a confession of judgment, but Illinois does. This provision is often used in promissory notes, mortgages, guarantees or other contracts in which one party is borrowing money. Therefore, if a party defaults, the creditor can file the confession of judgment and may quickly begin collection procedures without the need to serve the defaulting party and allow them to participate in litigation.
A confession of judgment clause in a contract has the effect of appointing a creditor as the borrower (or guarantor) attorney-at-law, and that is why the creditor can appear in court without service of process and obtain a judgment for the unpaid amount of a loan. Please note that Illinois law sets forth a procedure that must be followed and our firm has routinely filed and collected on the confession of judgment cases.
If you are considering loaning someone money, adding a confession of judgment clause to the contract is a no brainer. First, you will save on legal fees because the confession of judgment clause will allow you to obtain your judgment very quickly. Second, you can begin collecting on your judgment much sooner because you will not need to wait to serve the borrower with a complaint and possibly have litigation over the course of months or years. However, it is important to note that Illinois courts will carefully scrutinize a confession of judgment and certain requirements must be met, so contacting our firm to assist you in drafting the initial contract is a wise idea. For example, the confession of judgment clause contained in the contract must clearly layout (and possibly limit) the extent of the borrower’s liability. Also, Illinois law allows for a debtor to challenge a judgment by confession if the debtor has a valid defense to the judgment. If you are looking for a business litigation attorney to assist you in regards to a confession of judgment, you have come to the right place. Please contact IllinoisAttorney.com to speak with an experienced creditor’s rights attorney to determine if a confession of judgment clause is the right tool for you or to enforce a contract that already contains a confession of judgment clause.
For an attorney in Illinois to assist you, contact IllinoisAttorney.com.