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Irvine Bankruptcy Lawyer / Confession of Judgment Bankruptcy

Navigating the legal landscape of consumer bankruptcy can be confusing, especially when you come across unfamiliar terms and concepts. One term that sometimes comes up in bankruptcy cases is “Confession of Judgment.” At The Law Office of Charles A. May, we are committed to breaking down the complexities of bankruptcy law to help you make informed decisions. Read on to understand what Confession of Judgment is, how it works, and how it could affect your bankruptcy case. For help with Chapter 7 or Chapter 13 debt relief in Orange County, Los Angeles and throughout Southern California, contact The Law Office of Charles A. May to discuss your situation with a knowledgeable and dedicated lawyer.

What Is Confession of Judgment?

A Confession of Judgment is a legal document wherein a debtor admits liability and agrees, ahead of time, to the entry of a judgment against them for a specific amount of money if they default on a loan or fail to perform an obligation. Essentially, by signing a Confession of Judgment, you are waiving your right to defend yourself in court should a dispute arise in the future.

How Does a Confession of Judgment Work?

When you sign a Confession of Judgment, you are essentially speeding up the process for the creditor to get a court judgment against you in the event you default on your payments or obligations. Normally, a creditor would have to file a lawsuit and go through the legal process to obtain a judgment, which can be time-consuming and costly. With a Confession of Judgment, the creditor can bypass many of these steps and move directly to getting the judgment entered, often without your knowledge.

Why Would You Sign a Confession of Judgment?

It might seem counterintuitive to sign a Confession of Judgment to begin with, but it does have some advantages in certain situations. Since the Confession of Judgment avoids having a lawsuit filed against you, you avoid having to incur any legal fees associated with a lawsuit. Even if you let the case go to a default judgment without fighting it, you could be on the hook for the other party’s legal fees and court costs in the event a California fee-shifting statute applies to the case.

As one example, a creditor might request a Confession of Judgment as a condition of agreeing to a repayment plan on a past-due debt, relieving the creditor of the trouble of having to go to court should you default. If you agree ahead of time that going to court would be a losing battle for you, then signing the Confession of Judgment might make sense.

Is Confession of Judgment Allowed in Consumer Cases?

It is essential to note that Confession of Judgment is highly regulated, and its legality varies from state to state. In California, Confessions of Judgment are generally not permitted in consumer transactions. They are mostly used in commercial or business contracts. That said, it is crucial to consult with a knowledgeable California bankruptcy attorney to understand how the state’s specific rules may apply to your case.

For a Confession of Judgment to be valid in California, it must include a statement signed by the debtor under oath authorizing the entry of judgment and acknowledging the sum is due. The document must be independently reviewed by the debtor’s attorney who certifies they reviewed it and advised the debtor accordingly. Finally, the confession must be filed in the appropriate county court.

Implications for Bankruptcy

If you have signed a Confession of Judgment and are contemplating filing for bankruptcy, it is essential to understand how this could impact your bankruptcy case. Generally speaking, a signed Confession could make it easier for creditors to take action against your assets even after you have filed for bankruptcy. However, federal bankruptcy laws can sometimes override these state-specific provisions, offering you some level of protection.

Judgments can sometimes be discharged in bankruptcy when the debt underlying the judgment is dischargeable, such as a credit card bill or medical debt. However, if the Confession of Judgment is considered a “priority debt,” then it might not be dischargeable regardless. This is a complex legal area where you will want the help of a knowledgeable bankruptcy lawyer to take a close look at your situation.

What to Do if You Have Signed a Confession of Judgment

If you have already signed a Confession of Judgment and are facing financial difficulties, it is not too late to take action. The first step is to consult a knowledgeable bankruptcy attorney to understand your options and legal rights. Bankruptcy can be a complicated process, but having the right legal guidance can make all the difference.

Contact The Law Office of Charles A. May for Help With Confession of Judgment and Bankruptcy

Confession of Judgment is a complex legal mechanism that can have significant consequences for those contemplating bankruptcy. The Law Office of Charles A. May is dedicated to guiding you through the intricacies of consumer bankruptcy law in Southern California. If you have any questions or would like to discuss your specific situation, feel free to reach out to us for a free consultation.

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