To demonstrate how a confession of judgment typically operates, we will discuss the procedure for obtaining a judgment by confession in our home state of Illinois.
With such a provision in place, upon an event of payment default, the creditor's attorney (or for that matter, any other licensed attorney) may file suit in a court having jurisdiction (and if you included a jurisdiction and venue clause, that will be the creditor's home court), attaching the settlement agreement containing the confession of judgment provision, along with a confession of judgment signed by the attorney-in-fact, and an affidavit of the creditor setting forth the amount of the judgment being sought (taking into account settlement payments made, and including attorneys' fees, accrued interest and other costs).
Promissory notes that allow for a confession of judgment usually contain language such as the following:
A creditor who has the right to a judgment simply needs an actual confession of judgment signed by the debtor or any attorney.
A central empirical finding presented in Neighbors and Strangers is that when colonial citizens began relying with greater frequency on formal, written credit instruments, litigation in the vast majority of cases ended in either confession of judgment or default.
19) In Plymouth County from 1724 to 1750, however, the median interval between the date of the agreement and the lawsuit in cases ending in confession of judgment was over four years (1549.
One of the major benefits of the confession of judgment is that the lien of the judgment and any proceedings to enforce the lien (for example, a sheriff's sale of the mortgaged property and/or seizure of the borrower's bank accounts) will continue without interruption while any proceedings instituted by the borrower to challenge the judgment are pending.
In summary, the confession of judgment procedure has the advantage of being fast, and because it is a variation of a lawsuit based on the note, it also has the advantage of resulting in a personal judgment.
Pursuant to the note, Mid-Power signed and delivered a Confession of Judgment under which Davis could, without notice to Mid-Power, obtain a judgment for $10.
Mid-Power filed the motion for temporary restraining order and preliminary injunction in an effort to preclude Davis from filing the Confession of Judgment and executing on Mid-Power's assets, so that Mid-Power's liability under the note could be determined at a trial on Mid-Power's substantive allegations in its lawsuit against Davis.
Thus, in default and confession of judgment cases, the entirety of the large fees associated with debt collection through the courts was paid by debtors.
38) Conclusion of the case led to additional charges, whether for the trial, for default or confession of judgment (six pence to the judges, six pence to the clerk for recording the outcome), or for imprisonment of the debtor (two shillings and six pence for "turning the key on each prisoner committed").
The Confession of Judgment sounds too good to be true.
Even if the jurisdiction permits Confessions of Judgment generally, it may not permit a Confession of Judgment for the type of transaction in which you are involved.