I am an owner/operator of an Inc. trucking company – I had to sign a personal guarantee on the truck I purchased. High fuel costs & low rates are forcing me out of business. I will have to give back the truck in 3-4 months if things don’t improve. What are my options? If I have to turn in my truck – and cannot afford to pay the difference – will filing bankruptcy alleviate that problem? Also – what if I can pay the difference – will my credit rating still suffer. Please advise.
Thanks.
The following is my opinion and is not to be taken as legal advice:
Because you have personally guaranteed the truck, any repossession of the truck will have a devastating effect on your personal credit as well. This also means that corporate bankruptcy will not relieve you from your duties as a personal guarantor.
Assuming that the truck is the only outstanding note on the business, the best thing you could do is sell the truck. If you can get enough money from the sale of the truck to cover the remaining principle and get out of debt without bankruptcy, that would be ideal for your credit.
If you cannot sell the truck, filing for personal bankruptcy may be the only way to get out from the debt, but remember that in most states they can still have action against you such as putting a lien on your home or whatnot.
Before going to any of these extremes, try contacting your creditors and see if they can renegotiate the terms of the contract. Most creditors will work with people because they would rather make some money than no money. Perhaps a slightly lower monthly payment is just what you need to get your business on track.
I hope this helps, good luck to you.
