If you owe more than your medallion is worth, or if you are facing a foreclosure on your medallion, or have come to the conclusion that it is no longer worth it to work long hours only to have to pay your lender up to 50% of your gross income simply to stay in business, I may be able assist you.
The bankruptcy laws are there for a reason. You have done nothing illegal or immoral. A series of events and circumstances occurred that you, individually, had little control over but they have hurt you financially.
The filing of a Chapter 7 or Chapter 13 bankruptcy may enable you to get out from under your Taxi Medallion Loan and obtain a fresh start while also protecting all that you have worked for.
Each Owner’s situation is different. This is why my firm offers a FREE CONSULTATION to all Taxi Medallion Owners. In a short consultation, we can assess whether bankruptcy is the right option for you. Call us today at either 516-873-6330 or 800-479-6330 – you will be glad you did…
If you are not yet convinced I invite you to continue to read below…
A Short History of the Demise of the NYC Taxi Medallion
A NYC Taxi Medallion has always been considered an income producing asset by lenders. This means that its value, for lending purposes, is made up of two factors – the income that can be generated by drivers and market conditions.
In 2013, individual NYC Taxi Medallions values reached over One Million Dollars. Private lenders (Rapid Funding, Medallion Funding) were financing medallion purchases at up to 80-90% loan to value. First Jersey Credit Union came into the NYC market with the sole goal of generating loans to boost its market share. The traditional lenders (Melrose Credit Union, Banco Popular, LOMTO) made the business decision to continue to finance medallions regardless of value in order to hold market share. The average taxi loan rose to in excess of $600,000.00. The average taxi loan rose to in excess of $4,000.00 per month.
A NYC Taxi can be on the road 24 hours a day, 7 days a week. Taxi Drivers commonly rotate in 12 hour shifts. A single Taxi Driver can only generate a finite amount of fares per shift – an individual medallion can only generate a finite amount of fares per month.
From this amount all expenses must be deducted, including debt service. In most cases, a Driver’s largest expense is the payment on its taxi loan. If a loan payment is too large, no matter how many hours a car is on the road, a point comes where a medallion can no longer generate a working wage for a Driver – that point came in 2013 although no one yet realized it.
At about the same time, UBER was formed. Its formula was simple – riders can request a ride on their cell phones and within minutes a driver arrives. This is brilliant so long as you have enough drivers on the road. It did not take long for part time drivers to line up by the hundreds. Little by little, UBER, and later LYFT, began to cut into the Yellow Taxi market. The TLC did little or nothing to support Taxi Medallion Owners.
Some lenders saw it coming, such as Citibank, which in 2015, cut its ties with the Taxi industry and began to foreclose of medallion loans. The NYC Taxi and Limousine Commission (TLC) viewed this as a minor event. Unfortunately, this was the tip of the iceberg.
Starting in early 2015 the value of a NYC Taxi Medallion began to plummet – dropping by up to 75%, down to less than $200,000.00 by mid-2017. Many Taxi Owners owe $400-500,000.00 more than their medallions are worth. Further, with the arrival of UBER and LYFT, more and more drivers are having difficulty maintaining their taxi loan payments.
Drivers organized and began to lobby NYC and Albany to no avail. Lenders commenced a lawsuit against the TLC seeking some relief, but that was readily dismissed in State Court. Owners and Lenders were left to fend for themselves. The Free Market prevailed. The State and Local Governments are not going to provide any assistance.
Two final items of note:
Melrose Credit Union, First Jersey Credit Union and LOMTO Credit Union (all in conservatorship) are now “suing” medallion owners first and asking questions later. If you have received a summons from either lender, you cannot ignore this document or proceed pro-se (without an attorney) – we may be able to help…
Capital One Equipment Finance, another lender that has left the NYC Taxi market, is now aggressively pursuing collection efforts on the notes and confessions of judgment that drivers executed rather than foreclosing solely on the medallions.