Confession of Judgment Bill Still Awaits Governor’s Signature

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cuomo speechNew York State Governor Andrew Cuomo will have only ten days to sign S6395, the bill that prohibits companies from entering Confessions of Judgment in New York against non-New York State debtors, once its delivered to him. Only two possible contingencies could prevent that from happening:

(1) An official veto
(2) a pocket veto

Neither is expected to take place. Reining in the use of COJs was an official part of the Governor’s 2019 justice agenda.

The law only requires that a debtor reside or have a place of business in a New York county and that the judgment only be filed and entered in that county. Whether the filing party is located in New York or Florida or Alaska makes no difference. For a personalized legal analysis, contact an attorney.

The law also only affects a narrow process, the entering of a COJ in New York. It does not prevent parties from filing lawsuits in New York.

As the bill requires the Governor’s signature to become law, the usage of COJs in New York has dwindled but has not disappeared. New York State court records examined by deBanked demonstrate that some companies are continuing to file COJs in New York against out-of-state debtors and that county clerks are continuing to honor them. However, a handful of debtors appear to be challenging previously entered COJs on the basis of S6395’s passage through the state legislature. It remains to be seen how fruitful such defenses might be.

In recent weeks, a number of companies in the small business finance industry have publicly announced that COJs will no longer be required going forward.

You can follow the bill’s path to the Governor’s office here.


This article has been updated to reflect that the deadline rules first require delivery to the Governor

Last modified: July 18, 2019
Sean Murray


Category: merchant cash advance, Regulation


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