Inside NY Limits On Creditor Use Of Confessions Of Judgment

By Robert Fryd and Andrew Coyle (March 9, 2020, 4:15 PM EDT) -- Last year, New York amended Section 3218 of its Civil Practice Law and Rules to prohibit the use of confessions of judgment against out-of-state debtors. Although the amendment has been in effect for six months, many still appear to be unaware of it, and several issues raised by the amendment remain to be resolved by the courts.

Among these issues are (1) whether debtors, who previously lacked standing to challenge their creditors' filings of confessions of judgment in an improper county, may now do so, and (2) whether a confession of judgment which, under the amendment, can no longer be filed...

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