“I got your name last night at Kennedy Airport while the drivers were talking, waiting for fares. Someone else had been to see you and gave me your number.”
That is how our meeting started when he arrived with his older cousin and another relative, all taxi medallion owners. It ended 3 hours later, with a plan.
When his cousin started driving, years ago, a medallion cost $125,000. Working hard, you could make a good living. But as medallion costs started increasing by $100,000 per year in the Bloomberg years, the loan payments became higher and higher.
Although he paid over $800,000 for his medallion, he was able to pay the note by leasing out the car for another shift. That worked, so long as the market remained stable. But with Uber, the market has crashed and it is now hard to find someone to lease to. And nobody wants to buy for a price that will pay off the loan.
Meanwhile, he is struggling. It takes half a shift just to pay the overhead. The regulations, taxes, fees, gasoline costs, repair costs, credit card machines and absence of fares are choking him.
So what does he do? Renew for a one year? Extend for 3 months? Just keep paying monthly? Give in to the bank’s demand that he sign a confession of judgment if he defaults? Give the bank a mortgage on his house, as they request? File for bankruptcy?
After a thorough analysis I determined that there were hidden risks to filing for bankruptcy right now. So I developed a customized non-bankruptcy plan for him.
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