Years ago when he refinanced his loan, he signed all documents requested at the closing. One of the documents was a “Waiver of Right to an Attorney”. Another was a “Confession of Judgment”. He didn’t really understand what it meant.
Now that he can’t afford to make his note payments, he has discovered what it means: if he doesn’t pay, there will be a lien on his house, and even worse, it is possible the house could be sold by the bank!
Hard-working, he has supported his family well, has bought a home, and has paid down his mortgage. The problem is, because of all the equity in his house, he can’t file for chapter 7 bankruptcy! If he does, he will have to pay the bankruptcy trustee the “non-exempt equity(namely, the value of his house, minus the mortgage, minus “homestead exemption”).
Alternatively, he could file a chapter 13 or chapter 11 bankruptcy, under which he could pay this non-exempt equity to his creditors over a period of years.
Given this problem, and his inability to pay the non-exempt equity, combined with his decision to stop driving the cab, we developed a multi-step, long-term, non-bankruptcy solution.