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 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 $100,000.00 by mid-2019. 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.
DOT NOT BE LURED BY TEMPORARY PAYMENT AGREEMENTS WITH YOUR LENDER – THEY ARE JUST KICKING THE CAN DOWN THE ROAD. Although State and Local Governments are working on various programs, nothing has been finalized…YOU NEED SOMEONE ON YOUR SIDE. Over the past five years, I have met with over 1000 NYC Medallion Owners, and have successfully prosecuted over 350 Chapter 7 and Chapter 13 Bankruptcy cases.
Two other items of note:
Melrose Credit Union, First Jersey Credit Union and LOMTO Credit Union (all in Liquidating NCUA Conservatorship) have been “suing” medallion owners first and asking questions later. The NCUA has enlisted Fieldpoint Loan Servicing and Midland Loan Services (a subsidiary of PNC Bank) to service the remaining portfolio. If you have received a summons from any of these parties, or their assignees, you should not 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, was aggressively pursuing collection efforts on the notes and confessions of judgment that drivers executed rather than foreclosing solely on the medallions. They have also since sold off portions of their Taxi portfolios to private investors such as DePalma Acquisitions in Delaware.
In addition, Fieldpoint is negotiating settlements and workouts with Taxi Owners. Many of the settlement offers may now be feasible in light of the Covid Crisis. If you are a taxi owner who cannot qualify for bankruptcy relief, this may be an option to get out from under your debt, or even retain your medallion. Over the past year, my office has begun to negotiate successful workout agreements in a number of cases. PLEASE NOTE THAT IT IS NOT ADVISABLE TO NEGOTIATE WITH YOUR LENDER ON YOUR OWN – DO NOT NEGOTIATE AGAINST YOURSELF – THERE ARE TAX CONSEQUENCES REGARDING THE FOREGIVENESS OF DEBT THAT MUST BE CONSIDERED BEFORE ENTERING INTO A SETTLELEMNT. Call us at 800-479-6330 to see if this can work for you.
Richard S. Feinsilver, Esq. is now the “go to” source regarding this crisis. Rich has also appeared in the following articles of interest:
On July 9, 2017, Rich was quoted by Crain’s New York in an article entitled “As A Taxi Lender Seizes Medallions Cabbies Are Caught In The Carnage”
In August, 2018, Rich was quoted by the Federal Lawyer in an article entitled “The Yellow Cab – A NYC Icon on the Skids”
In addition, in 2019, Rich was interviewed by Brain Rosenthal of the New York Times foe their series “The Weekly” which is available on FX and Hulu.