So what happens when owner op doesn’t work out?

Everyone is asking about how to prepare for being owner op, but I don’t see anyone talking about the worst worst case scenario, you went bankrupt and have to give up oo.

let’s say Johnny finances a 70k truck and 30k trailer. He put down 20k down payment for both. He got his insurance, all paperwork, eld fuel cards etc. Johnny works for half a year then his truck broke down, needs in frame, but Johnny being Johnny spend his saving on down payment and doesn’t leave any for repair. So he’s stuck.

So let’s say Johnny just said screw this I’m out, what exactly happens from here?
How do you calculate the debt that he is probably going to collect?

 

I'd say if Johnny gives up that easy he was not in it to begin with . A good business man will always figure out a way to make money, and get back on the horse when he's thrown off.

 

It’s a fun little story I’ve put together inspired by another thread.
I know with lease ops you will have to break the lease and pay a certain amount in fine, but with financing.

But for financing, I assuming selling off your truck and trailer and take the lost in difference? What about insurance and authority? And I’ve never actually finance before so I don’t know how that works.

 

If you don't pay your bills , the repo man comes and gets your equipment.. Then the bank does what they want with it. Likely send it to auction. You will have to find a job to pay the bills instead of that happening. A good idea is not to go so deep into debt just to get into this business. If you can't save up any money. I'd say it's not a great idea to get into this business.

 

I would say Johnny needs to speak with an attorney who specializes in this type law to find out what his rights and obligations are.

 

Sell your equipment and hope it covers the loans. What most people don’t account for is taxes. If the truck and trailer are depreciated out and you sell both then it’s going to be a pretty hard hit when you’re already broke. So then you weigh the option of letting the finance company have it back. They will send it to auction and they will send a 1099 for the difference between what it brings and what you owe. If you have good credit and want to keep it that way then you can be making payments to the IRS for a long time. If you don’t care about your credit and don’t want a huge tax bill then let them come get it.

 

File chapter 7 wash your hands of it & go get a job

 

you can't sell it if there is a lean on it without full payment for the loan

 

We can we tell you...?
Colloquially speaking, they are in a deep sh...t! Repossessions, foreclosures, divorces, At best bankruptcies. Licking wounds for a long time.
Therefore, the most important thing is to start with lots of, I mean lots of cash in the bank...even half a million is not too much...that's right.

 

You can sell it, the title won’t be released until the loan is paid. It wouldn’t be the first time someone got jerked around trying to get the title for something they bought.