The confession of judgment has already been entered. Your account may be frozen, your receivables may be under restraint, and the judgment appears on the public court record with your name attached to a dollar figure you do not agree with. This is the position from which vacatur proceeds, and it is not as static as it looks.

Six steps describe the standard path to challenging a confession of judgment filed by an MCA company. The path differs depending on whether the grounds are procedural or substantive, but the sequence is consistent.

Step 1: Obtain the Full Docket Record

Before any motion is prepared, obtain the complete docket record from the court where the judgment was entered. This includes the confession of judgment affidavit itself, the attorney’s authorization instrument, the date of filing, the affidavit of service if the judgment holder served notice of enforcement, and any prior filings by the same funder. The docket often reveals procedural defects that are not apparent from the collection notice alone: stale filing dates, missing residency identifications, improper notarization, or out-of-state defendant designations that violate the 2019 amendment to CPLR Section 3218.

Step 2: Identify Whether the Challenge Is Procedural or Substantive

Procedural challenges — defects in the COJ’s execution, notarization, or filing — can be raised by motion under CPLR Section 5015. This is the faster path. If the affidavit was notarized without a wet-ink signature, filed more than three years after execution, or filed against an out-of-state defendant in violation of the 2019 restriction, a motion supported by the relevant statutory text and the defective document itself may result in vacatur without extensive litigation.

Substantive challenges — criminal usury, fraudulent inducement, unconscionability — require a plenary action: a separate lawsuit commenced by the judgment debtor against the judgment creditor. A 2025 ruling in New York confirmed this procedural distinction, holding that substantive defenses to a COJ require independent litigation rather than a motion within the original proceeding. The plenary action takes longer but presents all available defenses without the constraints of the motion procedure.

Step 3: Request Emergency Relief if Accounts Are Frozen

If a bank account has been restrained, the motion or order to show cause should include a request for a temporary restraining order lifting the freeze pending the full hearing. Courts grant emergency relief where the business demonstrates irreparable harm — which is not difficult to establish when the account freeze is preventing the payment of employees, rent, or suppliers. The emergency relief application must be filed in the same court and presented to a judge with the jurisdiction to modify the enforcement.

The TRO is not the endpoint. It is the oxygen that keeps the business alive while the full challenge is litigated.

Step 4: Prepare the Supporting Affidavit and Memorandum

Whether the challenge proceeds by motion or plenary action, the business owner’s affidavit is the factual foundation. It must describe how the MCA was obtained, what representations were made during the sales process, the actual revenue history during the payment period, whether reconciliation was requested and refused, and the specific facts supporting the legal theory of challenge. An affidavit that says the judgment is unfair proves nothing. An affidavit that says the daily debits were fixed regardless of revenue fluctuation, that reconciliation was refused in writing, and that the effective annual rate calculated from the disclosed figures exceeded twenty-five percent is a document courts work with.

Step 5: Conduct Discovery on the Underlying Agreement’s Validity

In a plenary action challenging the COJ on usury or fraud grounds, discovery allows the business owner’s attorneys to obtain the funder’s internal documentation on the transaction’s structure, the broker’s commission arrangement, the funder’s own calculations of yield, and communications about the agreement’s characterization. Internal documents sometimes confirm what the contract’s structure implies: that the transaction was underwritten and managed as a loan, with a fixed maturity and a targeted return, regardless of its contractual label.

Step 6: Negotiate From the Position the Vacatur Creates

A funder facing a plenary action that asserts criminal usury — the agreement is void, not merely unenforceable — is in a different position than a funder collecting an uncontested judgment. When the vacatur proceeding is combined with a counterclaim for wrongful enforcement, the funder’s own litigation exposure has grown. Most MCA vacatur cases resolve through negotiated settlements that significantly reduce the balance, eliminate the judgment, and restore access to the restrained accounts.

Settlement from a position of organized legal challenge is not the same as settlement from a position of panic. The sequence of these six steps is what creates the difference.

A first call costs nothing and establishes where your challenge is strongest.

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