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Simple English definitions for legal terms
judgment note
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A quick definition of judgment note:
A judgment note is a type of promissory note that is not legal in most states. It includes a power of attorney that allows the creditor to appear and confess judgment for a specific amount of money. This means that if the debtor does not pay the debt, the creditor can obtain a court judgment against them without going through a trial.
A more thorough explanation:
Definition: A judgment note is a type of promissory note that is illegal in most states. It contains a power of attorney that allows the creditor to appear and confess judgment for a specified sum without going through the usual legal process.
For example, if a borrower signs a judgment note for $10,000 and fails to make payments, the creditor can use the power of attorney to obtain a judgment against the borrower without going to court. This means that the creditor can seize the borrower's assets or garnish their wages without a trial.
It's important to note that judgment notes are illegal in most states because they bypass the legal process and can be used to take advantage of borrowers who may not fully understand the consequences of signing such a document.