What's happening
This bill limits where judgments by confession can be filed, clarifies residency rules, and allows government agencies broader filing options.
Why it matters
Reduces "forum shopping" for creditors. by requiring judgments by confession to be filed only in the county where the defendant actually resides or, for businesses, where they have a place of business—making it harder for creditors to file in distant or inconvenient locations.
Clarifies residency rules for businesses. (“non-natural persons”) by specifically defining their residence as any county where they operate, closing loopholes and providing clearer guidance for courts and litigants.
Expands government authority. by allowing government agencies enforcing civil or criminal law to file judgments by confession in any county statewide, potentially making it easier for the state to pursue debts or penalties.
Could provide greater fairness to debtors. by ensuring cases are handled in locations with a clear connection to the parties involved, rather than in counties chosen for tactical advantage.
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Who cares
Headline styles
Limit Judgment by Confession
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Signed chap.214
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading rules cal.395
- Substituted for A7500A
- Referred to codes
- Delivered to assembly
- Passed senateVote 61–1
- Ordered to third reading cal.1714
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Tighten Confession Judgment Rules
Assembly Floor Calendar · Sponsor Jeffrey Dinowitz
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6395
2019-2020 Regular Sessions
IN SENATE
June 7, 2019
Introduced by Sen. HOYLMAN -- (at request of the Office of Court Administration) -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the civil practice law and rules, in relation to judgment by confession
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 1 of subdivision (a) and subdivision (b) of section 3218 of the civil practice law and rules, paragraph 1 of subdivision (a) as amended by chapter 311 of the laws of 1963, are amended to read as follows:
1. stating the sum for which judgment may be entered, authorizing the entry of judgment, and stating the county where the defendant resides [or if he is a non-resident, the county in which entry is authorized];
(b) Entry of judgment. At any time within three years after the affidavit is executed, it may be filed, but only with the clerk of the county where the [defendant] defendant's affidavit stated [in his affidavit that he] that the defendant resided when it was executed or[, if the defendant was then a non-resident, with the clerk of the county designated in the affidavit] where the defendant resided at the time of filing. [Thereupon the] The clerk shall then enter a judgment in the supreme court for the sum confessed. [He] The clerk shall tax costs [to] in the amount of fifteen dollars, besides disbursements taxable in an action. The judgment may be docketed and enforced in the same manner and with the same effect as a judgment in an action in the supreme court. No judgment by confession may be entered after the defendant's death. For purposes of this section, a non-natural person resides in any county where it has a place of business.
Notwithstanding any other provision of law to the contrary, a government agency engaged in the enforcement of civil or criminal law against
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11359-03-9
S. 6395 2
a person or a non-natural person may file an affidavit in any county within the state.
§ 2. This act shall take effect immediately and apply to judgments by confession entered upon affidavits filed on or after such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the civil practice law and rules, in relation to judgment by confession
This proposal is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of his Advisory Committee on Civil Practice.
This measure would amend section 3218 of the Civil Practice Law and Rules to remedy abuses in the use of confessions of judgment by credi- tors against out-of-state debtors. This measure is in response to recent press reports regarding creditors that execute confessions of judgment in New York State even though the associated agreement or debtor have no nexus to the State.*
Read the full memo (659 words)
Under the current statute, a confession of judgment is a written and signed statement, in the form of an affidavit, in which a debtor admits liability and agrees to pay the sum confessed as owed to the creditor pursuant to an agreement. A confession of judgment is a legitimate tool that may facilitate commercial transactions, resolve or avoid liti- gation, support collection of moneys owed under an equitable distrib- ution plan, or ensure that government agencies can recover funds on behalf of victims. When the debtor does not perform or pay according to the agreement, a confession may be filed as a judgment with the county clerk, even in the absence of a pending court action.**
But, in recent years, creditors, often from out-of-state, have entered confessions of judgment in various New York counties against debtors who themselves are out-of-state small business owners with no connection to New York. This practice has resulted in some unscrupulous creditors using New York law and procedure to freeze and then seize debtors' assets based on a judgment entered in a venue far from where the agree- ment was executed and the parties reside, making it difficult for a debtor to contest abusive conduct by a creditor.
This measure seeks to correct such abuse without frustrating legitimate use of confessions of judgment within the State. It limits the venue for filing a confession of judgment to in-state debtors, based on where the debtor resided at the time the affidavit was executed or, if the debtor moves, where he or she resides at the time of filing the judgment. This approach is intended to prevent creditors from abusing confessions of judgment by using New York courts as a venue to profit from debtors with no New York connection.
Under this measure, a non-natural person, such as a corporation, would be deemed to reside in the county where it has a principal place of business.
This measure would provide an exemption for government agencies engaged in enforcing civil or criminal law against a person or non-natural person, including non-residents. Government agencies often use confessions of judgment to ensure that they can recover assets to pay, for example, restitution to victims. Therefore, the proposal would permit government law enforcement agencies to enter such judgments in any county within the State.
This measure, which would have no fiscal impact, would take effect imme- diately and apply to judgments by confession filed on or after the effective date.
Legislative history
None. New Proposal
* Zachary R. Mider and Zeke Faux, 'Sign Here to Lose Everything', Bloom- berg Businessweek (online, November 20, 2018), https://www.bloom berg.comigraphics/2018-confessions-ofjudgment/?smd=confessions-of-judg ment.
** In the mid-1980s, the Federal Trade Commission (FTC) banned confessions of judgment in consumer transactions and bank transactions: " It is an unfair act or practice within the meaning of Section 5 of
THE FTC Act for a lender or retail installment seller directly or indirectly to take or receive from a consumer an obligation that: 1) Constitutes or contains a cognovit or confession of judgment ( for purposes other than executory process in the State of Louisiana), warrant of attorney, or other waiver of the right to notice and the opportunity to be heard in the event of suit or process there on." (16 CFR 444.2.)
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.