8 Grounds for Vacating a Confession of Judgment

If an MCA lender hit you with a Confession of Judgment, and you just found out your bank account is frozen, keep reading. A COJ is one of the most brutal tools in the MCA playbook. You sign it at funding, you probably didn’t read it, and the moment the lender claims you defaulted — they walk it into a county clerk’s office and get a judgment against you. No lawsuit. No hearing. No chance to tell your side. You find out when the money’s already gone.

Short answer: You can vacate a COJ, but the window is narrow and the grounds are specific. New York shut down out-of-state COJs in 2019, which helps. But if you signed one before then, or you’re a New York business, you’re still exposed. Below are the 8 grounds courts actually accept. Not theories. Not maybe’s. The ones that work.

1. The COJ was filed in the wrong venue

Most MCA COJs were filed in places like Orange County, NY, or Erie County — counties the lender picked because the clerks processed them fast and didn’t ask questions. If you never did business there, never lived there, and the COJ doesn’t have a proper basis for being filed there, you have an argument. Venue isn’t just a technicality. Courts have vacated COJs on this ground alone.

2. The affidavit of confession is defective

A COJ requires a sworn affidavit, and the affidavit has to meet specific statutory requirements. It has to state the sum for which judgment can be entered. It has to state the facts out of which the debt arose. If the affidavit is vague, if it just says “pursuant to the agreement,” if it doesn’t show how the default amount was calculated — it’s defective. Defective affidavits get vacated.

3. The amount entered is wrong

This is more common than people think. The lender enters judgment for the full purchased amount, plus default fees, plus attorney fees, plus interest — and somewhere in that math they double-count, or they include fees the contract doesn’t authorize, or they ignore the payments you already made. If the judgment amount doesn’t match what the contract actually allows, you have grounds. Pull your payment history. Do the math yourself.

4. There was no actual default

The lender claimed you defaulted. But did you? Sometimes the ACH bounced because the lender pulled it on the wrong day. Sometimes the “default” was a technical violation nobody would enforce — a missed notification, a clerical issue. Sometimes the lender declared default before you were actually behind. If you can show you weren’t in default when they filed, the COJ comes down.

5. The underlying agreement is usurious, or the MCA is really a loan

This is the big one. MCAs are sold as purchases of future receivables — not loans. That’s the entire legal fiction holding the industry together. If the “MCA” has a fixed term, a fixed daily payment that doesn’t actually reconcile to receivables, no meaningful reconciliation clause, and no real risk to the funder — it’s a loan. And if it’s a loan, the effective interest rate is almost always criminally usurious. New York’s criminal usury cap is 25%. Most MCAs price out at 80%, 100%, 200%+ APR. If a judge looks at the deal and calls it a loan, the whole thing collapses, and the COJ with it.

6. Fraud, duress, or the signature was procured improperly

Did the broker tell you the COJ was “just a formality”? Did they say it would “never get used”? Did you sign a stack of documents in 3 minutes because the funds were wiring that afternoon and you needed the money to make payroll? Did you even know what a COJ was? Procurement by fraud, misrepresentation, or duress is a basis to vacate. You have to prove it, and “I didn’t read it” alone isn’t enough — but if the broker’s email said the COJ was a formality, that email is evidence.

7. The COJ was filed outside the time window the statute allows

New York CPLR 3218 has requirements around when a COJ can be filed, and how old the affidavit can be. If the affidavit was signed years before it was filed, if it’s stale, if the lender sat on it — there are arguments. Not always winners, but arguments.

8. You weren’t a New York resident or doing business in New York, and the COJ was filed after 2019

In August 2019, New York amended CPLR 3218 to bar filing of COJs against non-New York debtors. If you’re a business in Florida, and an MCA lender filed a COJ against you in New York after August 30, 2019 — that filing is improper. Full stop. This was the single biggest change to COJ law in decades, and it wiped out the lender’s favorite move overnight.

What to do if you’ve been hit with a COJ

Move fast. The moment you find out there’s a judgment, the clock is running on restraining notices, levies, and information subpoenas going out to every bank and customer on your UCC. An order to show cause to vacate the COJ can be filed within days, and in some cases you can get a temporary restraining order the same day to unfreeze the accounts while the motion is heard.

Don’t call the lender. Don’t try to negotiate from a position where they’ve already got the judgment and you’ve got nothing. Get the COJ pulled from the court file, get the affidavit, get your payment history, get the agreement. Then figure out which of the 8 grounds above apply — usually it’s more than one.