Cognovit Note

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.

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ante; (48) a cognovit note, by which a debtor consents to judgment in
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(96) the Supreme Court considered whether to enforce a cognovit note, a
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Overmyer was an Ohio case involving a cognovit note, an "ancient legal device by which the debtor consents in advance to the holder's obtaining a judgment without notice or hearing, and possibly even with the appearance, on the debtor's behalf, of an attorney designated by the holder." (93) Unlike other states at that time, (94) Ohio law permitted cognovits.
Kawamura separately agreed to the company's demands and wrote a cognovit note to end the case.