RESOURCES FOR FINANCIAL RESUSCITATION
GENERAL. Writers at Money magazine and bankrate.com offer objective articles on credit, debt, bankruptcy and other personal finance topics: www.money.cnn.com; www.bankrate.com.
COUNSELING. Many for-profit and nonprofit credit entities provide credit counseling, debt consolidation and consumer educational material. One of the largest nonprofits is:
www.myvesta.org
BANKRUPTCY. This website includes bankruptcy attorney listings, bankruptcy laws by state, a free personal financial evaluation and information on Chapter 7 and Chapter 13 bankruptcy:
www.totalbankruptcy.com
First, the bad news. Then some more bad news. Truck repossessions are up, thanks in part to fuel costs. But if fuel or anything else has you thinking of bankruptcy, think again. New bankruptcy regulations, designed to keep deadbeats from abusing the system, have kicked in. Without going into detail, here are the hurdles:
· Filing for bankruptcy is more expensive and involves more deadlines.
· The income test is tougher. That determines whether you can go for Chapter 7, where debt is erased, or Chapter 13, in which you have a repayment plan.
· Your cars and other property can be assessed at a higher value, making you more liable for repayment.
· You’re required to attend a credit counseling session, often at a fee.
Many thousands of Americans rushed to file before the bankruptcy changes took effect Oct. 17. For clients of American Truck Business Services in Denver who joined the bankruptcy brigade, fuel appeared to be a contributing factor, but fuel costs alone do not seem to be wiping out large numbers of owner-operators, says Todd Amen of ATBS.
The new regs aren’t the only good reason to consider solutions to financial woes other than seeking bankruptcy, says Perry Wiseman, owner of Truckers Accounting Service in Omaha, Neb.
Bankruptcy “pretty much destroys any hope of working for yourself for the near future, probably seven to 10 years,” Wiseman says. “You’re never going to be able to take out loans again unless you’re paying really, really high interest, at least double what it would be if you had decent credit.”
Instead, try to fix things. On the personal side, debt consolidation is often necessary, but make sure you use a reputable agency that doesn’t charge too much. Reduce expenses. Sell unneeded assets.
On the business side, take advantage of fuel efficiency measures, such as idle and speed reduction. In some cases, such as the lack of a fair fuel surcharge, a change of carrier can help. Perhaps you can sell the truck and become a company driver. If you’re not working with a financial adviser who fully understands the owner-operator business model, find one. The fee will pay for itself.
Turning around your near-failure can do more than save you from the many consequences of bankruptcy. It likely will grant you a diploma from the School of Hard Knocks that equips you to prosper as an owner-operator. The slickest bankruptcy attorney can’t offer that.
