NEW RULES - CONFESSION OF JUDGMENT

Governor Andrew M. Cuomo on August 30 signed legislation (S.6395/A.7500A) closing the legal loophole that allows creditors to use New York courts to secure confessions of judgment and seize the assets of borrowers for cases where the borrower has no connection to New York. Prior to this new law, creditors were able to exploit New York laws to freeze and seize a borrower's assets by obtaining a judgment entered in a court far from where the contested agreement was executed, making it difficult for a borrower to legally contest the unfair penalty.

Section 3218 of the civil practice law and rules, paragraph 1 of subdivision (a) is now amended