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Dwayne B.
Dwayne B., Attorney
Category: Legal
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Experience:  Began practicing law in 1992
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I am a small business owner in California who presigned an

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I am a small business owner in California who presigned an affidavit of Confession of Judgement. I recently defaulted. It was a merchant cash advance from New York that purchased future recivables with a daily ach pull of 199.00. I paid out about 4,000 with 5,000 still left to pay. I defaulted 5/23/16. It's 6/5/16. How long before the freeze my account? Do I have time to file bancruptcy? Please help.
JA: The Lawyer will need to help you with this. Have you consulted a lawyer yet?
Customer: Just a bancruptcy lawyer last week. I haven't petition it yet.
JA: Is there anything else the Lawyer should be aware of?
Customer: I had two other that I stopped ach. Defaulting with them as well.
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Lawyer about your situation and then connect you two.
Submitted: 1 year ago.
Category: Legal
Expert:  Dwayne B. replied 1 year ago.

Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

It's impossible to tell how long before they try to freeze the account. If you signed a confession of judgment then it makes it substantially easier and faster on them. If they hurry they can get it done in a few days but most of the time it takes a week or so, maybe two.

You should have time to file a bankruptcy if that is what you want to do. Usually a lawyer can throw together a basic bankruptcy petition in a day or two and then get it filed which results in an automatic stay being issued by the judge. If you think that is what you want to do then don't delay, call the lawyer and tell him to do it ASAP. You ,ay even want to go and withdraw all of your money from the bank and cancel the ACH at the bank. Of course, you will declare the money in the bankruptcy, withdrawing it just keeps it from being tied up while the court sorts everything out.

Feel free to ask any follow ups in this thread.

Customer: replied 1 year ago.
They are from New York. So I checked to see if the judgement was file or an appointment if it will be filed. Is there anyway I can check if it was already files and to be inforced?
Customer: replied 1 year ago.
Also, if that particular bank or my only bank account get "freezed" is it possible for my bancruptcy lawyer to in-freeze my account so I can conduct business?
Expert:  Dwayne B. replied 1 year ago.

You will have to call the clerk of courts and ask them what has been filed. While some of them are online, I have never seen an office that was up to date. They may exist, but I think most of them upload in batches and so it can be days or weeks behind.

If course, the clerk's offices will be closed today but you can call tomorrow. Your name will be one of the ones on the case so you can have them search by that.

Yes, the bankruptcy law can get the judge to issues and order that will unfreeze the account but it can take a while to get that order. The stay I mentioned happens automatically and so after the judge issues that, which will done done immediately upon filing, they can't legally freeze the account.

Customer: replied 1 year ago.
Do you mean, once the creditor files the presigned affidavit of confession of judgement they still have to file other court papers to freeze my account to get the money? When I defaulted I was sent a very nasty email that they will do that.
Expert:  Dwayne B. replied 1 year ago.

Yes, but let me ask a few questions to make sure I have all the facts.

1) Were you being sued at the time you signed the Affidavit of Confession of Judgment?

2) Are the terms of the settlement and payments set forth in there?

3) If not, is there a separate document that has the terms of the settlement and payout agreement?

Expert:  Dwayne B. replied 1 year ago.

4) Is it the original creditor or a collection agency threatening you?

Customer: replied 1 year ago.
No. I was not being sued at the time I signed the affidavit of Confession of judgement.
The terms on it said if default I would have to pay 8,999 minus what has been paid before date of default and all fees. The contract is more detailed.
The original creditor finance mgr. emailed once I stopped ach which is automatic default that why did I do it. If I don't pick up the phone and call and rectify it and unblock the ach they will come for me and levy my account (s). I have not heard from them since May 26th.
Expert:  Dwayne B. replied 1 year ago.

I think they will likely have to file the lawsuit and then serve you and allow the answer time to pass before they can get a judgment and garnishment order.

It doesn't mean they can't lie to the court or cut corners somehow but to do it properly you should have at least 30 days or so from when they file the lawsuit. Most courts don't like to take a confession of judgment that was signed without a lawsuit being filed and then just automatically issue a garnishment on it because they know that the person may have made payments, etc. However, some collection companies and their lawyers misrepresent or leave out facts and get judges to sign order but the judge will be miffed if they do that and don't tell him.

Expert:  Dwayne B. replied 1 year ago.

So, the answer is still to have the lawyer file bankruptcy ASAP. That definitely stops them in their tracks because your lawyer will send them the Notice of Automatic Stay and they can't do anything or they will be held in contempt by the bankruptcy judge.

Customer: replied 1 year ago.
i had a feeling that might be so. It's nice to hear that.
Expert:  Dwayne B. replied 1 year ago.

That's the way it is supposed to work anyway.

If your question has been answered then I'd offer my best wishes to you and ask that you please not forget to leave a Positive Rating so I receive credit for my work.

Of course, please feel free to ask any follow up questions in this thread. I want to be sure that all of your questions are answered. In addition, once you issue your Positive Rating the question will lock open and you can come back to it anytime in the future if you think of something else.

Customer: replied 1 year ago.
I thought automatically the presigned Judgement of Confession was all they needed to levy, freeze, my account. So, they must sue me first. What type of paperwork will I be receiving if indeed they file the signed affidavit of Confession of judgement. Also, that is the reson I was looking at the New York courts to see and perhaps to talk to someone there is they have filed.
Expert:  Dwayne B. replied 1 year ago.

It shouldn't be, unless it was signed following a lawsuit and entered as a judgment by the court. The court is going to want some kind of proof that you actually signed it and that it is the correct amount, at least if the judge looks at what he is signing.

You will likely receive a Petition for breach of contract along with some type of request for the judge to recognize the confession of judgment, although that can be just a few lines in the petition.

Customer: replied 1 year ago.
just so I am clear, and you have been very helpful, 7. On my Affidavit of Confession of Judgement states: Merchant Defendant and I hereby agree that the execution and delivery of this Affidavit of Confession and any entry of judgement there on shall be without prejudice to any and all rights of the plaintiff, which reserves all of its rights and remedies against Defendant. I'm confused by what this means as this paper has not been filed at time of signing.
Expert:  Dwayne B. replied 1 year ago.

It's unusual for one of these to be signed without a lawsuit being filed.

Really those paragraphs appear to be just legalese meaning if there are other issues they can be litigated as well. It's pretty standard language in any agreement like this and doesn't affect anything we've talked about.

Customer: replied 1 year ago.
Is there anyway they can by-pass suing me and automatically win the judgement against me and without notifying me? I have not received a call, email, letter/certified or not, and have not been served a summon or any form of paper of being sued. I do know now that the non-filed, signed, and notarized Affidavit of Confession Judgment I signed on 4/26/16 was like a security umbrella for them which I understand any creditor would do. I didn't foresee defaulting.
Expert:  Dwayne B. replied 1 year ago.

Kind of. They can try something tricky where they are supposed to give you notice but don't.

They could also ask the court to issue an injunction and freeze the account on a temporary basis while they serve you and go through the lawsuit. The judges really don't like to do this because of the various constitutional issues with due process but it is theoretically possible. Usually it is done when they have an actual interest in the account (ex. You were in a partnership together) and not just when a creditor is trying to get money.

Customer: replied 1 year ago.
I don't see myself recovering and saving my business/livelihood with bancruptcy. I don't think these type of creditor would work with me to catch up without being stuck with them indefinitely and seeing no light at the end of the tunnel. do you suggest I contact the Supreme Court of New York county and talk to a clerk/advocate or Cani file a petition myself from California.
Expert:  Dwayne B. replied 1 year ago.

Contact the clerk about what?

Also, are you talking about filing a petition for bankruptcy yourself?

Customer: replied 1 year ago.
I meant to contact the courthouse where the Confession of judgement might/have been filed and inquire what I can do to stop from them to freeze account or if I am being sued. No. I will have a bancruptcy lawyer.
Customer: replied 1 year ago.
Also, does it matter if I have the orientalist signed Affidavit of Confession of Judgement paper? I faxed them instead of overnighting them like they wanted. I read where the court might not accept/signed if it's not the original?
Customer: replied 1 year ago.
I mean, original signed Confession of Judgement.
Expert:  Dwayne B. replied 1 year ago.

Yes, contact everywhere you can. However, it is extremely unlikely that, even if they filed the judgment there in NY, that they can "domesticate" it there in CA without notifying you and giving you a chance to answer the request for garnishment. They can't do it without being dishonest anyway. The court has to allow you a chance to respond to the proposed "domestication of the foreign order" in case you have an argument against it.

No, the court will accept a copy unless there is some question as to authenticity. If the court notices that it is a copy the judge will certainly consider it yet another reason to give you a chance to respond.

Great on using the bankruptcy lawyer instead of trying to do it yourself. I would never, ever recommend someone do that themselves (or prepare real estate documents or represent themselves in a criminal matter). Those are things that really require a lawyer's expertise.

Customer: replied 1 year ago.
The only thing I see on the paper regarding me being in California is: 8. "If for any reason entry of judgement in the above specified amount or execution on the same is outside of jurisdiction of this court, Merchant Defendant and I hereby concentrate to the personal jurisdiction, entry of judgment, and execution therein in any State of Federal Court of the United States of America."I feel truly badly defaulting and at this point and just trying to figure out how much time I have to save my business. I know not much. And, if my business account is frozed, I won't be able to conduct business. You have giving me great info and greatly appreciate. It seems bancruptcy will be my only option.
Customer: replied 1 year ago.
Could you please in simple term tell me what an actual "Confession of Judgement" means. With all my research I assume it's the knowledgement that I owe the amount "borrowed" minus what I have paid. And, that it is THE paper that will eventually be used to sue me to retrieve money owed by way of freezing my accounts, etc.
Expert:  Dwayne B. replied 1 year ago.

That paragraph is pretty standard as well. It doesn't actually add anything since that is the law anyway.

Bankruptcy sounds like the most viable option.

Customer: replied 1 year ago.
Ok, so I should really file for bancruptcy before they sue me and before they freeze my account, then? And, if they do, I can still file for bancruptcy and will possibly discharge what's owed? I just hope tomorrow morning my account is not frozen so at least I will know I have time.
Expert:  Dwayne B. replied 1 year ago.

Yes, absolutely to both the questions.

The problem it will create is that the bank account won't be automatically "unfrozen" when you file bankruptcy. The lawyer will have to ask for a hearing, they'll have to be notified and given time to attend, etc. so the bank account could be frozen for 30 days or more. It's not likely that it would be frozen for that length but it is certainly possible and I assume that would cause issues for you (I know it would for me!) so it is much better off to act fast and beat them to the punch.

Customer: replied 1 year ago.
I possibly have time then. Seeing how today will be two weeks that I had my bank block their daily ach of $199.00 and they found out and called me on 5/25/16 and 5/27 was their last contact with me. I might have time to file bancruptcy. Perhaps 30 days from 5/25.
Expert:  Dwayne B. replied 1 year ago.

I would think that if you get your lawyer started on it tomorrow then you will beat them to it.

Customer: replied 1 year ago.
I understand I have not much time to waste. My concern was that the signed Affidavit of confession of judgement would automatically freeze my account without being sued first. Everybody told me they had to sue me first to obtain a judgement to freeze my account.
Customer: replied 1 year ago.
Thank you so much! I will.
Expert:  Dwayne B. replied 1 year ago.

I think they have to sue first but not necessarily to "get" a judgment, just to have the court acknowledge the one they have. That takes less time than getting a judgment but still should be plenty of time to file bankruptcy.

Expert:  Dwayne B. replied 1 year ago.

Best wishes to you and please don't forget to leave a Positive Rating so I receive credit for my work.