Signing a Confession of Judgement or Consent Judgement agreement is a legal written agreement between a lender and creditor (borrower). The Confession of Judgement is signed by the lender, agreeing to pay any money owed to the creditor, enabling both parties to avoid going to court to resolve any disputes if they had to arise.
A Confession of Judgement is a serious legal matter that should not be taken lightly. This agreement was created in order to protect lenders if a borrower defaults.
Furthermore, in a court of law, the Confession of Judgement is seen as a legal written contract or agreement signed by a defendant who is agreeing to pay a set amount of damages to a plaintiff and accept liability for damages caused to the plaintiff.
A confession of judgment is also sometimes called a cognovit note. These are used by creditors to protect themselves from protracted legal battles with borrowers who default.
The agreement has a three-year validity. The final agreement has no effect unless a creditor files it to court in the event of a lender not being able to make any repayments.
Once all repayments have been made, and the final amount has been settled, the lender can request a copy of the Confession of Agreement – clearly indicating that all payments have been made to the creditor (borrower) and both parties have signed off on the agreement.
In some extreme cases, a Confession of Judgement agreement is drawn up and signed by both parties to delay any inherent trials, as this can become lengthy and extremely expensive for both parties involved. This allows lenders an extended period to make any outstanding payments to creditors.
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