Cognovit Note


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Cognovit Note

An extraordinary document by which a debtor authorizes his or her creditor's attorney to enter a confession in court that allows judgment against the debtor.

A creditor may ask the borrower to sign a cognovit note when credit is extended. If the debtor falls into arrears the creditor can obtain a judgment against the person without notification to the debtor. There is usually little the debtor can do to attack the judgment when it is discovered. The Supreme Court has held that cognovit notes are not necessarily illegal but most states have outlawed their use in consumer transactions.

References in periodicals archive ?
96) the Supreme Court considered whether to enforce a cognovit note, a
Startec received notice on August 13, 2004 that it has been sued on a Cognovit Note by its former partner KI Development LLC, and that a substantial judgment has been confessed.
Kawamura separately agreed to the company's demands and wrote a cognovit note to end the case.
These include 61,380 Class B Preferred Shares, 2,970,000 Class A Preferred Shares, 2,610,000 Series A Sub-Ordinated Debentures, and a $500,000 Cognovit Note and Judgment, held by the bank.