I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear about your friend's situation.
If the taxi company is incorporated or an LLC, a bank that holds a mortgage on your friend's house in his name cannot legally take any of the company's assets. An LLC is a separate legal entity, and a company who sues one legal entity cannot take assets from another. Also, if the property is worth significantly less than is owed, the bank can only get a judgment against your friend for the difference between the sales price at auction and the fair market value, not the loan amount.
Also, your friend's car is exempt for being taken to pay a judgment if there is less than $4,000 equity in it. There's an additional $3,000 exemption for personal property. The lender can't just automatically grab whatever they want.
If the primary purpose is to keep the house, your friend can seek to negotiate a modification that would extend the life of the loan and give lower monthly payments, or he could look into refinancing if interest rates have dropped since he got the loan. Some people who have trouble paying their bills find relief in bankruptcy, but your friend would only be able to keep the house and the car if he still made the monthly payments, so it sounds like that may not be the best option at this point.
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