Confessed Judgement Promissory Note?

[Amy26]

Ok, is this a good or a bad thing?

My condo was officially sold back to the bank on 4/5/10. As some of you know, I have been working with the HOA (or trying to) to make payments on my account to settle with them.

I have been making payments of 50 dollars every month and proposed a while ago for them to let me make payments of 50 dollars... never heard anything. I notified them of the condo's sale and asked for a statement of my account and the status of my request which was supposed to be under board review.

I heard nothing until today and they sent me a letter and an attached "Confessed Judgment Promissory Note".

The letter says that they acknowledge sale of my condo and that my previously request to pay them 50 dollars a month was rejected but they have agreed to do 100 a month. It then says as a condition of the payment plan, I have to sign the attached Confessed Judgment Promissory Note.

It says the note secures the total due and I owe them 970 dollars and will make 10 payments to them to clear up the balance.

All this I am fine with this.... however, the name of the document freaks me out and makes me wonder is this an official judgment against me that will show up on my credit report if I sign this document?

I have no problem with the payment arrangements and was actually very pleased that they offered to do this.... but this "note" freaks me out. Is this really a bad thing? Should I just charge 970 dollars on a credit card or something and not sign this judgment note? I'm very confused.

[shark66]

AFAIK, there's no judgment without a court...

As for the credit report. if your condo was foreclosed on, a matter of this nature - whether reportable or not - should be the very least of your worries...

My $0.02 only...

Good luck.

[Amy26]

Ummm... so what exactly was your response to my thread?

I have no idea what you mean by "As for the credit report. if your condo was foreclosed on, a matter of this nature - whether reportable or not - should be the very least of your worries..."

I am not worried about the foreclosure... I'm worried about the document that my HOA sent me.

[shark66]

They (HOA) can call it "judgment" or they could call it "War & Peace" but fact of the matter is that there is no judgment without the court involvement, not in this country anyway.

Foreclosure - as I'm certain you know yourself - has a pretty devastating effect on one's credit report. Nothing apart from bankruptcy itself is comparable in those terms.

That's why I said that whatever effect this HOA business may or may not have on your credit report is not something you should worry about. The damage has already been done and things are not likely to get much worse than they already are in that respect.

I'm sure that someone with more experience on what HOAs can or can't do will chime in and decipher whether the matter at hand is reportable to begin with.

Good luck.

[Amy26]

Well, actually foreclosure has no effect on my credit report because the property was included in my bankruptcy and it will forever and after show as IIB. And if for some reason it changed, I would have it removed.

Not sure why you keep saying the "damage has already been done" ... yes bankruptcy sucked, but its not the end of the world and my credit is fine. And I can't see why anything would get worse for any reason. As you can see from my signature, my credit scores are actually very good for less than year after bankruptcy.

Thank you for your response regardless... however the matter is strictly about this promissory note and what it means.

I did look it up a little online and I think it just means I am giving them license to file a judgement against me if I fail to make their payment terms. I just wanted to know if anybody had any experience with this sort of thing and if there are any blaring red flags in me signing this note to pay off this debt.

[walkthaplank]

It sounds like you are agreeing to a stipulated judgment.

A stipulated judgment or agreed judgment is a judgment which both sides agree to have entered. If the agreement is not followed, the plaintiff can file an affidavit of default wherein the judgment can be entered without notice to the defendant(s). This default judgment is binding and failure to comply with it means that an enforcement action could be taken. Enforcement actions vary, but can include wage garnishment and/or property lien(s).

Whether it is good or bad is up to you. You are giving them permission to enter a default judgment against you if you don't pay.

Googled it...

What Is A Confessed Judgment?
A confession of judgment clause is usually contained in a note signed by the borrower and authorizes the creditor to obtain a judgment without providing advance notice to the debtor. If a debtor defaults, the creditor simply files a complaint in confession of judgment in court and issues an execution against the debtor's assets. This could in effect change an unsecured interest into a secured interest.

[MSbklawyer]

A confession of judgment means that you are agreeing to waive your right to defend the lawsuit should they sue you.

It's not a judgment until they sue you. But once they do, a lawsuit + a confession of judgment = a judgment.

I haven't seen one of those in a long time. Somewhere in the back of my mind something is telling me that a confession of judgment that predates the filing of the suit is invalid. I'd be hesistant as hell to sign it.

[StartingOver08]

As MSbklawyer points out....not a good idea to sign a confession of judgment.

Why won't they accept a payment agreement, like a regular note, instead of a confession of judgment? Seems to me that there is a possibility that once you sign it they will convert it right away to a judgment. A judgment after a BK is a credit killer.

This is a negotiation with your HOA. You have filed and been successfully discharged from the BK. Don't let them push you into signing something that is waives any of your rights. If they won't let you just sign a regular note then something fishy is going on anyway, IMHO.

[Amy26]

Hmm... interesting points... well I dunno where I'm gonna come up witih 970 dollars by June 1st then to avoid signing it.

They have been pretty unreluctant to work with me at all.

I am also in the process of applying for a top secret clearance... so, perhaps this wouldn't be a good thing to have hanging over my head.

[Amy26]

Ok, I went down there and paid it off. Thank you for the advice about not signing it. We're going to be dirt poor till june 15th... but at least I won't have that over my head anymore.

Thanks again.