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Imagine you're running a small business. You borrow some money. You're paying it back. Maybe you've fallen behind, maybe you haven't. And then one day out of the blue, you can't get any of your money out of the bank. Your accounts are locked up. They've been seized without any notice to you. This is happening to small business people across America every day. And it's enabled by an obscure document called a confession of judgment. It just kept getting worse, there was no money left. I was ready to take my life to clear everybody else. I'm Zach Mider, I'm a reporter at Bloomberg News. I'm Zeke Faux, I'm a reporter for Bloomberg News and Business Week Magazine. And we're the ones who wrote Sign Here to Lose Everything. This is an extraordinary period for America's economy. We've seen triple digit swings in the stock market. Major financial institutions have teetered on the edge of collapse and some have failed. After the financial crisis a decade ago, a lot of small businesses needed loans and they couldn't always get them from traditional banks. Instead people who stepped in were called cash advance companies. These guys call businesses across the country and they're offering quick money and they say that if you're in tight spot they can get you 50, a hundred grand overnight. The loans are very expensive, with interest rates as high as 300 or 500 percent annualized. That's 20 times as much as you'd pay on a credit card. The merchant cash advance industry has attracted all sorts of characters because of the potential to make a quick profit. So there are cash advance brokers with convictions for drug smuggling, stock fraud. If you go and talk to someone in the shady side of Wall Street, the odds are, they either work in cash advance, or they've considered it. One of the biggest companies in the cash advance space is Yellowstone Capital and it was actually founded by this guy David Glass. I didn't get to where I am today by losing my client's money. Glass actually served as the inspiration for the classic stock scam movie Boiler Room. You call me when the stock doubles alright? Glass heard about this cash advance boom and started Yellowstone. And it quickly grew to be one of the biggest cash advance brokerages. They're lending to small businesses. Picture like a plumber, an electrician, or a shopkeeper. But they realize quickly that some businesses were taking loans and then just stealing the money essentially. Like they had no intention of paying it back. So a lawyer, working for Yellowstone and some other cash advance companies, had an idea that they could revive this age old practice called confessions of judgment. A confession of judgment is something that the borrower signs as a condition of getting the loan. It basically means they give up their right to be heard in court. So later on if they miss a payment, or even if the lender wants to claim they missed a payment, it doesn't have to be true, the lender can go to court with this confession of judgment, which gives them the power to raid the borrower's bank account. Confessions of judgment aren't even valid in many states. But New York state law allows this practice. The borrowers are all across the country. Cleveland, or Topeka, Kansas, or Los Angeles, but typically they're all required to sign a confession of judgment that's valid in a New York court. When you stop and think about it, it's crazy that a borrower would admit in advance to not paying back a loan, when they haven't even received the money yet. It was so illogical, I really wanted to know more. We thought about, uh maybe we should do a story, but we didn't have a sense of the scale. Like is this something that's used a lot? And we ultimately found like more than 25,000 of these judgments filed in the last coupla years. They were being used to go after borrowers all over the country. And Yellowstone was filing these things at a rate of like several a day. This system has no safeguards. We found lots of borrowers who said that confessions of judgment were filed against them when it was not warranted, or the cash advance company seized more money than they were owed. We found, after talking to borrowers, that a lot of them had had their lives turned upside down by confessions of judgment. My name is Jerry Bush, Jr., I basically was a plumber for about 30 years. Jerry Bush ran a plumbing business with his father, near Roanoke, Virginia. And the company got a lot of jobs, but he had cash flow problems and he started taking these cash advances. The confession of judgment that was part of the contract that you had to sign and they have very high interest rates, but we needed money. So he kept taking more and more of these loans in order to get the money to pay the loans he already had. It got to be so bad that he was paying back $18,000 a day at one point. So I hada close doors because there was no way I could make the payments. The way these contracts work, the cash advance companies shouldn't be able to go after someone to collect if their business fails. But because Jerry had signed these confessions of judgment the cash advance companies went after him. They got my father's retirement money. They took it out of my son's account, which he was 17, but they said my name was on the account. So they took all his savings. I kept gettin' calls. One funding company told me, he said you have two ways out. Win a lottery, or die. I took the chance and I was ready to take my life to clear everybody else. He took a lot of pain pills, walked out into the woods near his house and recorded a video in which he said goodbye to his son and wife. They found him and took him to the hospital. I'm survivin' every day. My hope is that they will stop these confessions of judgments. I write to senators, Congress, almost every week and I'm just hopin' we can get some laws passed. After we filed the story in November of 2018, we got quite a lot of response from government officials. On the federal level, members of Congress in both chambers have filed legislation to end the practice of confession of judgment nationwide. In New York, the state Attorney General has opened an investigation and among the companies they're looking at are Yellowstone Capital. This is a story that needed a light shone on it actively by the press. If we hadn't published it when we did, you wouldn't see the official reaction that you see now. But while that's going on, people are still having confessions of judgment filed against them everyday. If you look up Yellowstone Capital, you can see their salesmen on Instagram posting pictures of their Lamborghinis, diamond watches, fancy vacations, so they seem to be doing great. Even if confessions of judgment go away, there are all kinds of other abusive practices in the cash advance industry. From brokers signing customers up for loans they don't really want, to lenders tryin' to collect money they were never owed. So you're probably gonna be hearing more about this industry for years to come.