A more thorough explanation:

A confession of judgment is a legal agreement that allows a creditor to obtain a judgment against a debtor without notice or a hearing if the debtor fails to make a payment. This agreement is usually included in a contract and may require the debtor to waive their right to defend themselves or be represented by an attorney appointed by the creditor.

John borrows $10,000 from a lender and signs a contract that includes a confession of judgment clause. The clause states that if John fails to make a payment, the lender can obtain a judgment against him without notice or a hearing. John misses a payment, and the lender uses the confession of judgment clause to obtain a judgment against him.

In this example, the confession of judgment clause allows the lender to obtain a judgment against John without giving him a chance to defend himself or be represented by an attorney. This can be unfair to John and is why confession of judgment clauses are controversial.

Confessions of judgment are controversial because they can facilitate predatory lending practices and violate due process rights. Some states, such as Indiana, prohibit the use of confession of judgment clauses in contracts. In 2020, the Maryland Court of Appeals held that state law prohibits the use of confession of judgment clauses in consumer transactions. In 2019, New York amended its laws to limit the use of confessions of judgment against out-of-state debtors.