Refresher in Confessions of Judgment

This article is meant to be a refresher on how you bring a Confession of Judgment action. As any good lawyer will say, you need to start with the statute.

Confession of judgment is found in 735 ILCS 5/2-1301(c). It states: “Except as otherwise related by this subsection(c), any person for a debt bonafide due may confess judgment by himself or herself or attorney duly authorized, without process.”

Confessions of Judgments are allowed only in business and commercial transactions. They have been barred in consumer transactions since 1975 in Illinois. The creditor uses the confession of judgment to quickly begin collection proceedings.

The ability to confess a judgment needs to be clearly set forth in a document executed by the debtor. The confession terms are typically found in Notes and Guaranties with commercial transactions. In order to file a confession of judgment lawsuit, that document instrument must be attached to the complaint. The complaint must be verified. The complaint must be filed in the county where the note obligation was executed, or where one or more defendants reside, or where the debtor’s real or personal property is located.

The confession complaint needs to be signed off by another attorney. The attorney that you choose must not be in the same firm as you. That attorney is “representing the debtor.” That attorney who signs off on the confession of judgment complaint can be sued for malpractice by his “client” or have an ARDC charge by that “client.” So, if you are asked by a colleague or friend to sign the confession of judgment, be aware that you are opening yourself up to potential liability. That “client” is also the disgruntled debtor.

If you are asked by a colleague or friend to be that attorney who signs off on the confession of judgment on behalf of the debtor, there are some due care steps you should take. You should first verify the loan/business transaction. Read the confession language in the contract and verify that the debtor waived notice of the confession. Review facts in the complaint and the amounts claimed. Ask to see a breakdown in calculation of the amounts claimed. Review all the documents to be sure they are all signed by your client. If credits are claimed or collateral is liquidated, ask to see proof. Review it as if you were drafting the answer, challenging every paragraph. Additionally, you should also ask the plaintiff to indemnify you for all acts, suits, and claims by the debtor, including your attorney fees and costs to defend you if sued by the debtor. Obviously, negotiate the indemnification prior to signing the Confession.