Can a Confessed Judgment in Maryland Be Opened or Vacated by a Business Owner in 2026?

If you are a Maryland business owner and you signed a note with a confession of judgment clause, you might just have learned, too late, that the process is pretty fast. You wake up one day and there is the judgment, entered by a court clerk, and no one even bothered to tell you. So now can you have the judgment opened up, vacated, and set aside? Sure, sometimes - but not for the reason you probably want. The answer comes from a ruling laid down by the Maryland Court of Special Appeals in December 2006, in NILS, LLC v. Antezana.

The court held that you can’t get a confessed judgment opened up, vacated or modified by disputing the validity of the debt. You must demonstrate a meritorious defense, and that defense must relate to the execution of the note or to the amount of the judgment. This is counter-intuitive. You might think you should be able to open a confessed judgment by showing that you never owed the underlying debt. It helps to think of the deal as having three “layers.” A first layer is the assumption of debt by the borrower. A second layer is the parties’ execution of a note or other instrument for a certain amount. The third layer is the entry of the confessed judgment in a certain amount.

An attack on the first layer (the “original debt”) does not open the judgment. In signing the note with the confessed judgment clause, you conceded the validity of the original debt. You have waived that defense. A defense on the second or third layer is a different matter. If you have one, you can raise it and ask the court to open, modify, or vacate the judgment. The court provided some examples of those defenses: who signed the note, whether it was voluntary, whether it was authorized, whether the balance due was correct or whether the court erred in not taking account of credits or payments made when entering judgment.

The facts here make the explanation easier. A widow, acting individually and on behalf of her late husband’s estate, sold a house to a buyer for $5 million. The buyer paid $1 million down and executed two promissory notes, secured by deeds of trust, for the balance of the purchase price. The buyer subsequently failed to make some of the payments due under the notes and late fees began to accrue. Eventually, the buyer obtained alternative financing, which he used to pay off the balance of the principal amount due under the notes. Subsequently, the buyer signed two additional notes of $75,000 each in favor of the sellers. Those notes were not for the original purchase money but for the late fees that had accrued as a result of the buyer’s missed payments. They each contained a confessed judgment provision that would go into effect if they were not paid on time.

The notes matured and were not paid, and in September 2005 judgment by confession was entered on each in the Circuit Court for Montgomery County. The buyer petitioned the court to vacate the judgments. His claim was that the late fees behind the two notes were an unenforceable penalty that the law would not uphold. The Court explained that the debtor has the burden to establish the meritoriousness of a defense, and that meritoriousness of a defense is a question of law for the court. The court must determine whether the defense implicates the second or third layers of the analysis, or attacks the antecedent debt. The debtor’s challenge of the late fees implicated the antecedent debt, and therefore was not a meritorious defense.

The court went further and declared that even if the debtor could show that it was under financial pressure when it signed the note with the confessed judgment clause, that still would not be a meritorious defense, since that still only goes to the first layer. That’s harsh. But the reasoning is that few people enter into debt arrangements out of the goodness of their hearts. So, as long as the debtor admits that the debt is valid and that the debtor signed the note willingly and voluntarily, there’s no need for the court to go behind the note.

But who does that decision benefit? It makes confessed judgments harder to attack, and it works for creditors who are trying to use them to collect money. It also outlines the first barrier a debtor needs to overcome in trying to open, vacate or modify a judgment once it is entered by the clerk of court. Creditors saw this ruling as good news: once the debtor signs the note, the first level is complete and the debtor’s defenses to it are over. The Court reminded the creditors, however, that defenses to the second or third layer can still convince a Court to open, vacate or modify the judgment. The business owner has to work with that.

So what does this mean to the business owner who is facing a confessed judgment this morning? First, figure out what will not work. Once you executed a note or instrument with the confessed judgment provision, the first level of the transaction was complete, and you lost all defenses to that part. Arguments that the debt was unfair, the fees were punitive, or you were pressured into signing are not the type of defense that the opinion says will open a judgment. The second and third layers should be considered carefully, because you may still have your day. Who actually signed the note? Was that person authorized to sign for the business? Was the note signed voluntarily? Is the judgment figure correct, or did it fail to include payments and credits that were due?

As the court noted, a judgment entered by confession is still subject to being freely stricken, on a motion, so long as the defense relates to the making of the instrument or the correctness of the amount of the judgment. The burden of proof is on the business, and the call is the judge’s.