Confession of Judgment Laws by State: Where Lenders Can Still Use Them

The confirmed split leans toward limits: 15 jurisdictions generally prohibit these clauses and 3 more restrict them, against 12 that still allow them for business debts. Several of the prohibited entries rest on 2019 congressional testimony rather than a fresh read of the statute, so check your state's row before relying on it.

Florida voided pre-suit confessions as early as 1828, but most of the action is recent. New York, New Jersey, Virginia, California and Texas all moved between 2019 and 2025, and Virginia and Texas aimed their newest rules squarely at merchant cash advance contracts.

What a confession of judgment must include in states that allow it

Source: Ohio Legislative Service Commission, Ohio Revised Code 2323.13: Confession of judgment (Internet Archive copy of codes.ohio.gov); Virginia General Assembly (Virginia Law Library), Code of Virginia s. 8.01-433.1: Notice of confession of judgment provision; Delaware General Assembly, Delaware Code Online, 10 Del. C. s. 2306: Entry of judgment by confession; Equipment Leasing and Finance Association, State Law Compendium: New York, Confession of Judgment (CPLR 3218, 3201); Illinois General Assembly, 735 ILCS 5/2-1301: Judgments - Default - Confession (Internet Archive copy of ilga.gov); Minnesota Office of the Revisor of Statutes, Minnesota Statutes 548.22: Confession of judgment; Washington State Legislature, RCW 4.60.050 and 4.60.060: Judgment by confession without suit; statement in writing; Maryland Judiciary, District Court of Maryland, Form DC-CV-104: Complaint for Judgment by Confession (Md. Rule 3-611); Maryland General Assembly, Maryland Code, Commercial Law s. 12-311; Pennsylvania Code and Bulletin, Pa.R.C.P. 2951: Method of Proceeding (Confession of Judgment for Money); Virginia General Assembly (Virginia Law Library), Code of Virginia s. 6.2-2234: Sales-based financing; venue, fees, confession of judgment. Download as image

Consumer bans on confession of judgment (business debts are treated separately)

Source: Legal Information Institute, Cornell Law School (Code of Federal Regulations text), 16 CFR 444.2 Unfair credit practices (FTC Credit Practices Rule); Illinois General Assembly, 735 ILCS 5/2-1301: Judgments - Default - Confession (Internet Archive copy of ilga.gov); Ohio Legislative Service Commission, Ohio Revised Code 2323.13: Confession of judgment (Internet Archive copy of codes.ohio.gov); Maryland General Assembly, Maryland Code, Commercial Law s. 12-311; Colorado.Public.Law (reproducing Colorado Revised Statutes 2024), C.R.S. 5-3-207: Authorization to confess judgment prohibited. Download as image

Can a lender use a confession of judgment clause? by state

• 12Permitted for business debts
• 3Restricted
• 15Generally prohibited

What is a confession of judgment, and why do lenders want one?

Normally a creditor who says you owe money has to file a lawsuit, serve you, and win. That takes months and gives you a chance to dispute the balance, the fees or the claim that you defaulted at all. A confession of judgment skips all of that. You sign a document up front admitting you owe a stated amount, and the lender files it the moment it decides you are in default.

For the lender, it turns collection into paperwork. For you, it means the fight happens after the judgment is entered, usually while your accounts are already being levied. Older documents call the same thing a cognovit note or a warrant of attorney to confess judgment. The labels change. The effect does not.

The clause shows up most often in merchant cash advances, where some products carry an annualized cost of 400 percent or more, according to the House Small Business Committee. It also appears in equipment finance, commercial leases and some small business loans, often buried near the default section.

Which states ban confessions of judgment?

In our October 2026 review, 15 jurisdictions generally prohibit them. Some of these are flat bans. Massachusetts treats agreements to confess judgment as void, and Florida voids any power to confess given before a lawsuit is filed. California made judgments by confession unenforceable and barred superior courts from entering them, for any judgment obtained on or after January 1, 2023.

Others are narrower than the word "prohibited" suggests. Arizona and New Mexico void clauses signed before the debt is due, but still allow a confession signed after default, for example as part of a workout. Texas bars a pre-suit confession, and since 2025 its Finance Code also voids them in merchant cash advance contracts. New Jersey bars them in business financing extended to New Jersey businesses, a law approved in 2020.

The 3 restricted states each draw a different line. New York allows them only against its own residents. Virginia still permits them on business notes that carry a boldface notice, but since 2022 they are unenforceable in sales-based financing contracts. Louisiana uses them mainly in its executory process for foreclosures.

Where can lenders still use a confession of judgment?

For business debts, 12 states still allow them: Delaware, Illinois, Iowa, Maryland, Minnesota, Missouri, Nevada, North Carolina, Ohio, Pennsylvania, South Carolina and Washington. Most attach formalities, and those formalities are where a defective judgment can be challenged.

Ohio requires a conspicuous warning next to the signature on instruments signed since January 1, 1974, or the warrant is invalid. Delaware will not treat the judgment as final until the debtor gets notice of a chance for a hearing. Illinois limits where the judgment can be entered. Minnesota and Washington want a verified statement setting out the facts of the debt.

Watch the choice of law clause, too. A lender in a permitting state may write its contract under that state's law and pick its courts. Your home state's ban does not automatically stop that, and courts in some states have been asked to enforce confessed judgments entered elsewhere.

Why New York changed everything

For years, New York was the place to file. Its courts accepted affidavits from debtors anywhere in the country, and merchant cash advance firms used that heavily. In the first five months of 2019 alone, they obtained more than 5,500 New York court judgments against borrowers, according to a House Small Business Committee memo citing Bloomberg.

On August 30, 2019, New York changed its rule so the affidavit can be filed only in the county where the debtor lives in New York. An out-of-state bakery owner can no longer be hit with a New York confessed judgment that way. The affidavit also has to be filed within 3 years of signing.

That did not end the practice. Lenders can still look to states that allow these clauses, and to other tools like personal guarantees and automatic debit authorizations.

Do these rules protect consumers and individuals?

Mostly, yes. The FTC banned confessions of judgment in consumer loans in 1985 through its Credit Practices Rule, and states such as Illinois, Ohio, Maryland and Colorado add their own consumer bans. The gap is business debt. If you are a freelancer or sole owner who signs a business loan or cash advance, the federal consumer rule does not cover you, even though the money will come out of your pocket.

That gap matters most when a personal guarantee sits next to the confession clause. Then the judgment can reach your personal accounts as well as the business's. Picture a designer with a two-person studio who takes a cash advance to cover a slow quarter. The studio misses a few daily debits. Without a confession clause, the funder has to sue and prove the default. With one, it can file and freeze her personal checking account within days.

What to do if your contract has one

• Find your state's row on the map and note whether it says permitted, restricted or prohibited. Then read the note, because the exceptions matter.
• Check the governing law and venue clauses. If they point to a permitting state you have no tie to, ask to change them to your home state.
• Ask to strike the confession clause entirely. The worst answer is no, and in a state that already voids it, the clause may not hold up anyway.
• If it stays, narrow it: a fixed maximum amount, a written default notice, and a cure period of real business days before anything is filed.
• Do not sign a blank or open-ended affidavit, and keep a copy of everything you sign.
• If a judgment has already been entered, talk to a lawyer quickly. Defects in the required warning, notice or filing county can be grounds to vacate it, but the deadlines can be short.

Sources and method

Every number on this page comes from the sources below, each opened and read on or before October 18, 2026. A second, independent review checked every figure against its source and corrected anything that did not match. 30 of 51 state entries were confirmed; any that could not be are marked "Not yet confirmed" and left out of every count and chart.

1. U.S. House Committee on Small Business (Majority staff), Hearing memorandum: "Crushed by Confessions of Judgment: The Small Business Story" (June 25, 2019)
2. U.S. House Committee on Small Business, Prepared Statement of Hosea H. Harvey, Ph.D., "Crushed by Confessions of Judgement: The Small Business Story" (June 26, 2019)
3. New York State Senate, Senate Bill S6395 (2019-2020): Relates to judgment by confession (signed chap. 214) (Signed August 30, 2019)
4. Equipment Leasing and Finance Association, State Law Compendium: New York, Confession of Judgment (CPLR 3218, 3201) (Last review December 31, 2024)
5. California Legislature, SB 688 (Wieckowski), Chapter 851, Statutes of 2022: Civil actions: judgments by confession (Approved by Governor September 29, 2022)
6. Legal Information Institute, Cornell Law School (Code of Federal Regulations text), 16 CFR 444.2 Unfair credit practices (FTC Credit Practices Rule) (Current CFR text, read October 2026)
7. eCFR, Office of the Federal Register, 16 CFR 444.2 Unfair credit practices (Current as of October 2026)
8. The Florida Senate, Florida Statutes s. 55.05: Judgments; power of attorney to confess invalid (2026 Florida Statutes)
9. Arizona State Legislature, A.R.S. 44-143: Formal requirements for and limitations upon confession of judgment under power of attorney (Current Arizona Revised Statutes, read October 2026)
10. Equipment Leasing and Finance Association, State Law Compendium: Confession of Judgment in Arizona (Last update January 1, 2025)
11. The 194th General Court of the Commonwealth of Massachusetts, Massachusetts General Laws c. 231, s. 13A (Internet Archive copy of malegislature.gov) (Archived 2025 copy)
12. Texas.Public.Law (reproducing statutes.capitol.texas.gov), Texas Civil Practice and Remedies Code s. 30.001: Instrument to Waive Service or Confess Judgment (Verified May 26, 2025)
13. Ohio Legislative Service Commission, Ohio Revised Code 2323.13: Confession of judgment (Internet Archive copy of codes.ohio.gov) (Effective January 1, 1974; page last updated November 3, 2021)
14. Illinois General Assembly, 735 ILCS 5/2-1301: Judgments - Default - Confession (Internet Archive copy of ilga.gov) (Archived 2024 copy)
15. Virginia General Assembly (Virginia Law Library), Code of Virginia s. 8.01-432: Confession of judgment irrespective of suit pending (Page dated 10/18/2026)
16. Virginia General Assembly (Virginia Law Library), Code of Virginia s. 8.01-433.1: Notice of confession of judgment provision (Page dated 10/18/2026)
17. Minnesota Office of the Revisor of Statutes, Minnesota Statutes 548.22: Confession of judgment (Current Minnesota Statutes, read October 2026)
18. Delaware General Assembly, Delaware Code Online, 10 Del. C. s. 2306: Entry of judgment by confession (Current Delaware Code, read October 2026)
19. Missouri Revisor of Statutes, RSMo 511.070: Confession of judgment entered, when (Internet Archive copy of revisor.mo.gov) (Effective August 28, 1939; archived 2026 copy)
20. Nevada Legislature, NRS 17.090: Judgment by confession for debt due or contingent liability (Internet Archive copy of leg.state.nv.us) (Archived 2026 copy)
21. Equipment Leasing and Finance Association, State Law Compendium: Nevada, Confessions of Judgment (Last review January 1, 2025)
22. Iowa Legislature, Iowa Code 676.1: Judgment by confession - how entered (Iowa Code 2026)
23. North Carolina General Assembly, N.C. Gen. Stat. 1A-1, Rule 68.1: Confession of judgment (Internet Archive copy of ncleg.gov) (Archived 2026 copy)
24. South Carolina Legislature, South Carolina Code Title 15, Chapter 35, Article 3: Judgment by Default or Confession (Current South Carolina Code, read October 2026)
25. Washington State Legislature, RCW 4.60.050 and 4.60.060: Judgment by confession without suit; statement in writing (Current RCW, read October 2026)
26. Montana Legislature, MCA 28-2-709: Illegality of agreement to allow another person to confess judgment (Montana Code Annotated 2025)
27. Montana Legislature, MCA 27-9-101: When and in what courts judgment may be confessed (Montana Code Annotated 2025)
28. Pennsylvania Code and Bulletin, Pa.R.C.P. 2951: Method of Proceeding (Confession of Judgment for Money) (Reflects changes through 56 Pa.B. 5370 (August 8, 2026))
29. Maryland Judiciary, District Court of Maryland, Form DC-CV-104: Complaint for Judgment by Confession (Md. Rule 3-611) (Current form, read October 2026)
30. Maryland General Assembly, Maryland Code, Commercial Law s. 12-311 (Current Maryland Code, read October 2026)
31. Equipment Leasing and Finance Association, State Law Compendium: New Mexico, Confessions of Judgment (Last review January 1, 2025)
32. Equipment Leasing and Finance Association, State Law Compendium: Idaho, Confession of Judgment (Last review January 1, 2025)
33. Equipment Leasing and Finance Association, State Law Compendium: Connecticut, Enforcement of Foreign Judgments (Last Review January 1, 2025; Last Update January 1, 2025)
34. Colorado.Public.Law (reproducing Colorado Revised Statutes 2024), C.R.S. 5-3-207: Authorization to confess judgment prohibited (CRS 2024, accessed by publisher May 26, 2025)
35. Amundsen Davis LLC, Confessions of Judgment - Indiana Style (May 25, 2018)
36. Virginia General Assembly (Virginia Law Library), Code of Virginia s. 6.2-2234: Sales-based financing; venue, fees, confession of judgment (Code of Virginia, read October 2026 (history: 2022, c. 516))
37. New Jersey State Library, Legislative history: P.L.2019, c.430 (S3581), N.J.S.A. 2A:16-9.1 and 2A:16-9.2 (P.L.2019, c.430, approved January 21, 2020)
38. Texas Legislature Online, Texas H.B. 700, 89th Legislature (enrolled text) (Enrolled 2025; effective September 1, 2025)