Quick Summary:

ISigning a confession of judgment (COJ) does not automatically mean you’re out of options. In many cases, you can still challenge or even vacate the judgment. But timing is critical. Once a COJ is filed, lenders can move quickly to freeze accounts and seize assets, so acting fast matters. An attorney experienced in handling MCAs can help you identify the best course of action and protect your business.

If you’re reading this, you’re likely already dealing with the fallout of a merchant cash advance agreement that included a confession of judgment (COJ). Maybe you’ve even received notice that a judgment has been filed — or worse, your bank account has already been frozen.

This is a high-pressure situation. But even now, there are still legal paths forward. Here’s what you need to know.

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What Is a Confession of Judgment in an MCA Agreement?

A confession of judgment is a type of clause in some MCA agreements. It allows a provider to obtain a court judgment against you without prior notice or a hearing if they claim you’ve defaulted or breached your contract in some way.

MCA funders use COJs because they give them speed and leverage. Instead of going through a traditional lawsuit, they can move directly to enforcement. Often, this involves freezing bank accounts or seizing assets before you have a chance to respond.

So, if you signed a contract that includes a COJ, it’s important to understand your legal rights and what to do next.

Can You Fight a Confession of Judgment After You’ve Signed It?

Yes — in many cases, you can.

Even after a COJ has been signed and filed, it may be possible to challenge or vacate the judgment. But the window to act is often very short. You have the strongest chance of reversing a COJ before the judgment is entered or immediately after filing.

It’s also important to understand that there are often two separate battles:

  1. Challenging the COJ itself (how it was filed and enforced)
  2. Challenging the underlying MCA agreement (whether it was legally valid)

In some cases, both strategies can be used together.

Not all COJs are enforceable. There are several legal angles your attorney may use to challenge them. Some common defenses include:

Procedural defects

These focus on whether the lender followed proper legal steps:

  • Improper or defective filing
  • Missing or invalid documentation
  • Lack of authority from the person who signed the COJ
  • Failure to meet state-specific filing requirements

Substantive defenses

These challenge the fairness or legality of the agreement itself:

  • Unconscionability (terms that are excessively one-sided)
  • Fraud or misrepresentation in how the MCA was presented
  • The “disguised loan” argument: If the MCA functions like a loan with a fixed repayment obligation, it may violate usury laws, potentially voiding the COJ

State-law defenses

COJs are heavily regulated at the state level:

  • Jurisdiction and venue challenges
  • Violations of state-specific COJ rules
  • Restrictions on out-of-state filings (for example, New York significantly limited this practice in 2019)

Personal guarantee defenses

If the COJ extends beyond your business and into personal liability, additional defenses may apply depending on how the guarantee was structured.

Steps to Take Immediately After a Confession of Judgment Is Filed

If a confession of judgment has already been filed against your business, the situation can escalate quickly. In some cases, MCA lenders move to freeze bank accounts or restrain funds within days of obtaining the judgment. T

hat’s why your response in the first 24 to 72 hours can have a major impact on your ability to protect your business operations and preserve legal options.

1. Confirm whether the judgment has actually been entered by the court

Business owners are sometimes threatened with a COJ filing before the MCA attorney formally takes action. So, it’s important to determine exactly what has happened, which court the judgment was filed in, the amount claimed, and whether any enforcement actions have already started.

An attorney who regularly works with MCA litigation matters can help you obtain and review the court filings quickly.

2. Contact an attorney who handles MCA litigation and confession of judgment cases

These cases move much faster than ordinary commercial disputes; general business attorneys or in house counsels may not be familiar with the aggressive tactics MCA funders use or the procedural defenses available.

The earlier an experienced attorney gets involved, the more opportunities there may be to challenge the filing, seek emergency relief from the court, or negotiate before additional enforcement measures occur.

This includes the signed contract, confession of judgment paperwork, bank statements, proof of payments, notices of default, emails or text messages with the funder or broker, and any communications discussing repayment terms or modifications.

Even details that seem minor can become important if your attorney is evaluating potential fraud, misrepresentation, or procedural defects in the filing.

4. Consider business continuity

If your operating accounts are frozen, your payroll, rent, vendor payments, and incoming receivables may all be affected. An attorney can advise you on lawful steps to protect ongoing operations and reduce disruption while avoiding actions that could create additional legal issues.

Business owners should not start transferring funds or closing accounts without legal guidance, as lenders may argue those actions were intended to evade collection.

5. Don’t assume that silence or delay will buy you time

MCA providers often rely on business owners feeling overwhelmed and waiting too long to respond. In reality, acting quickly may improve your chances of vacating the judgment, limiting enforcement, or negotiating a more manageable payment plan before the situation becomes even more difficult.

How a Motion to Vacate Works

One of the most powerful legal tools available is a motion to vacate.

This is a formal request asking the court to set aside the judgment based on procedural errors or substantive legal defenses.

In many cases, your attorney will also request a stay of enforcement, which can temporarily pause:

  • Bank account freezes
  • Garnishments
  • Asset seizures

If successful, a motion to vacate can significantly shift the balance of power, turning a one-sided judgment into a negotiable dispute.

Negotiating With the MCA Funder After a COJ Has Been Filed

Many business owners assume that once a confession of judgment has been filed, there is no room left to negotiate. In reality, settlement discussions often continue even after the MCA has obtained a judgment. And in some cases, the filing itself becomes the pressure point that pushes both sides toward a resolution and more often when the merchant is represented by strong counsel.

Enforcing a judgment can be time-consuming, expensive, and uncertain, especially if the merchant hires a good attorney and raises legitimate legal defenses. If your MCA defense attorney identifies procedural problems with the filing or substantive issues with the MCA agreement itself, the MCA collector may decide that negotiating a settlement is less risky than fighting a motion to vacate in court.

Settlement discussions can also help stop the immediate operational damage caused by a COJ. Resolving the dispute quickly may allow the business to stabilize cash flow, regain access to accounts, and avoid litigation costs.

However, not all settlement offers are good ones. Some MCA funders may propose aggressive repayment terms that just recreate the same financial pressure that caused the default in the first place. Others may verbally promise to release the judgment but fail to properly document the agreement. That’s why settlement negotiations should always be handled carefully and reviewed by an attorney who knows MCA tricks before anything is signed.

A well-structured settlement agreement should clearly spell out:

  • The total settlement amount
  • Payment deadlines and installment terms
  • Whether enforcement activity will pause during payments
  • A formal satisfaction of judgment once the agreement is completed
  • A release of personal guarantees, if applicable
  • Confirmation that the lender will not pursue additional collection activity related to the MCA

Why Working With an MCA-Experienced Attorney Matters

MCA cases are highly specialized. They follow a different legal playbook than traditional business disputes.

An attorney who regularly handles MCA litigation can:

  • Identify overlooked procedural errors
  • Build stronger defenses
  • Move quickly to stop enforcement actions
  • Negotiate from a position of leverage

How Tayne Law can help

Tayne Law Group has extensive experience helping business owners facing MCA confessions of judgment. We work with clients to evaluate motions to vacate, negotiate settlements, and protect both business and personal assets.

If a COJ has been filed against you, the most important step you can take right now is to speak with an experienced MCA defense attorney immediately. Acting early means you’ll have the widest range of options at your disposal.

Call 866-890-7337 or request a free phone consultation. All conversations are confidential, and we never share or sell your information.

Frequently Asked Questions

How long do I have to fight a confession of judgment after it’s been filed?

In many cases, the timeline is extremely short — sometimes just days. Courts expect prompt action, especially if enforcement has already begun.

Can the MCA lender seize my bank accounts before I challenge the COJ?

Yes. That’s one of the biggest risks of a COJ. MCA attorneys can often move quickly to freeze accounts, which is why immediate legal action is critical.

Does it matter what state the COJ was filed in?

Yes. State laws vary widely, and some states impose strict limits on COJs, especially for out-of-state defendants.

Can I fight a confession of judgment on my own?

Technically, yes. However, it’s not advisable. MCA litigation is complex, and missing a key argument or deadline can make it much harder to reverse the judgment.

What happens to my personal assets if there’s a personal guarantee?

If the MCA contract includes a personal guarantee, your personal assets may be at risk. However, there may still be legal defenses depending on how the guarantee was structured.