AGREED JUDGMENTS ARE UNENFORCEABLE

Loan workouts occur every day.  Often, the lender requires the borrower to provide an “agreed judgment” as a part of the workout.  This is intended to ensure that the lender does not have to litigate the case. 

If the debtor “revokes” his agreement to the judgment before the judgment is filed or signed by a judge, the agreed judgment is worthless.  All the debtor needs to do is assert a defense of breach of contract.

The good news is that the Court will enforce the terms of the loan modification agreement.  If the debtor, as in this case, failed to make a required $30,000.00 payment, the Court will grant summary judgment.

See The People's Bank v. Raymond E. Lacy.