There are semi-trucks on the highway or freeway every day, so does it come as a surprise to hear the trucking industry is suffering? When these trucks go “too” slow, you may think they’re a nuisance, but you should consider the people behind the wheel. Many truck drivers worry about becoming collateral damage and losing their jobs in a struggling industry.
According to Business Insider, 2,500 truck drivers have already lost their jobs in 2019. Harsh weather, a declining economy and low rates all make it difficult for trucking companies to stay afloat. When they can’t make ends meet, what can they do?
Chapter 11 Bankruptcy
The Wall Street Journal reports the collective trucking industry is indebted millions of dollars to banks, union pension funds and fuel distributors. When faced with an insurmountable amount of money owed, many trucking companies file Chapter 11 bankruptcy to reorganize their debts and gain additional time to settle them.
This extra time comes primarily from an automatic stay, which prohibits debt collectors and creditors from harassing you while awaiting a verdict on your bankruptcy case.
Chapter 11 bankruptcy, also known as a “reorganization bankruptcy”, first provides companies the opportunity to present their plans for re-organizational changes to the court. By creating a restructuring strategy, trucking companies outline how they can alter their business to turn a profit. Some examples of these plans include:
- Scaling back the business,
- Reducing expenses and
- In some instances, liquidating assets.
The court needs to approve these plans and ideas before the company can move forward.
Filing Chapter 11 bankruptcy may help struggling trucking companies restructure with the hopes of turning into a profitable business and restoring jobs. However, it is truly a complicated matter. Every business is unique, so whether filing for Chapter 11 bankruptcy is right for a company depends upon the situation.