When signing a promissory note, both parties are legally agreeing to the terms listed in the note. If the borrower does not abide by the repayment terms and defaults on the loan, the creditor has the right to a complaint in confession of judgment against the borrower.
When signing a confessed judgment promissory note, the borrower generally forfeits his rights to a trial if he defaults on his agreed-to payments.
The contents in a confessed judgment promissory note are the name of the borrower, the amount being borrowed, the interest rate on the loan, the payment dates and the state in which the borrower resides.
A confessed judgment complaint has the potential of making unsecured interest secured. Secured interest rates are not fixed like unsecured interest rates, which means the interest can increase over the loan period.
Borrowers should be warned that a confessed judgment promissory note can require the borrower to repay the amount immediately if a loan and interest payment is missed.
In some states, judges and courts now give a debtor the benefit of opening a petition to the court, where he has the option to challenge the judgment being filed against him. If the challenge raises doubt, the debtor’s case is opened and he has the benefit of taking the lawsuit to trial.