Legal Definitions - cognovit note

A cognovit note is a type of promissory note that includes a clause called a cognovit clause. This clause allows the lender to obtain a judgment against the borrower without going through the usual legal process.

For example, let's say John borrows $10,000 from Jane and signs a cognovit note. The note includes a clause that says John agrees to allow Jane to obtain a judgment against him if he fails to repay the loan. If John defaults on the loan, Jane can take the note to court and obtain a judgment against him without having to go through a lengthy legal process.

Cognovit notes are controversial because they give lenders a lot of power over borrowers. Some states have even banned the use of cognovit notes because they are seen as unfair to borrowers.