Here’s Why Truck Driver Bankruptcies Are on the Rise

The last two years have been a harrowing experience for almost everyone. With a global pandemic, mass unemployment, skyrocketing consumer goods costs, and shortages of essentially everything, it has been a difficult time to live through. 

It has also been a particularly difficult time to work through. 

For few professions is this truer than for truck drivers. These professionals are responsible for quietly ensuring that Americans across the nation have access to the things they want and need. However, numerous challenges raised by the pandemic and other major world events in the last two years have made doing their jobs difficult for these drivers. 

The Rate of Truck Driver Bankruptcies is Up

Given the fact that bankruptcy is on the rise in general, it is probably no surprise to hear that the same is true for truckers. The rate at which truck drivers have declared bankruptcy in the last two years is substantially higher than any other time in recent years. 

As with many industries, the reasons why this is happening are many – and varied. 

Companies Closing Down or Laying Off Truckers

Over the course of the last two years, numerous trucking companies have been forced to close. Some of these companies had to declare bankruptcy themselves, while others closed their doors to prevent it. Still others simply did not have the staff, the frequency of work, or the resources to continue to operate in the current economic environment. 

While most truckers are independent contractors, most of them also work in cooperation with a company that supplies their vehicle, their jobs, or other important aspects of their career. Even those who are entirely independent cannot work if there are no jobs to do.

Sudden job loss was a leading reported cause of bankruptcy in the last two years. Truck driver bankruptcies are no different. The men and women who keep the country moving are increasingly facing a future without a job – and without the stability they need to pay their bills. 

Less Reliable Work for Drivers

If you have been to the grocery store in the last two years, you undoubtedly know what supply chain shortages are. These complications have been brought on by a variety of factors, including international conflicts, the coronavirus, and the resulting economic fallout. Whatever the reason for them, they are causing problems for more than just disappointed consumers. 

Most of what truckers haul is freight for end consumers or materials used to create it. With that in mind, fewer finished items being produced means fewer materials needed, as well. All of that means less work for truckers who rely on these jobs and are increasingly unable to find them. 

Additionally, many truckers who are either totally independent or work with a smaller company rely heavily on spot freight. Spot freight is essentially a smaller job or less inventory to haul than otherwise might be available when working with or through a larger company. This can help save on numerous expenses, such as fuel and even insurance. 

However, these jobs are increasingly scarce. With more and more companies trying to save money wherever they can, larger freight companies are negotiating deals with smaller producers. These deals are leaving smaller companies and independent trucking contractors out in the cold – and with few options to keep money coming in.

Fuel Prices Causing More Truck Driver Bankruptcies

Of course, rising fuel costs are one of the primary factors in the rising numbers of truck driver bankruptcies. Both gasoline and diesel fuel are rising rapidly, and many truckers are finding it difficult to keep their machines properly fueled. 

Gas prices were already becoming a problem in the early months of the pandemic. With demand and costs so unpredictable, many truckers found it challenging to keep their trucks ready to roll. In 2022, though, the cost of doing so has become prohibitive for many drivers. Prices have soared by as much as two dollars per gallon in some areas, with drivers in coastal hotspots like California paying $7-$9 per gallon!

With prices that high, it is no wonder that road traffic has decreased this year!

Unfortunately, those prices have also made working difficult for truckers. Since most drivers are responsible for the cost of their fuel, this expense cuts deeply into the profit they make from various jobs. With those margins getting thinner and thinner, bills are getting more and more difficult for many truck drivers to pay. 

Rising Personal and Professional Debt for Truckers

With the various costs of owning and operating a truck taking their toll on drivers, it is no wonder so many have incurred such significant debt in the past two years. The number of drivers using credit cards or loans to pay for supplies or services for work has risen dramatically. 

All of that borrowing is done with the hope of repaying. What happens, though, when the ongoing pandemic and numerous other scenarios make that repayment nearly impossible? For many drivers, the answer is bankruptcy – and that can be very scary. 

Facing Bankruptcy? Let Us Help You Navigate the Process!

The changes that have led to the increase in truck driver bankruptcies are unlikely to correct themselves quickly. Some may never do so. That does not have to leave you feeling hopeless, though. 

Bankruptcy might be taboo, but it is actually a great way to get a fresh financial start when you are dealing with overwhelming debt. It can also seem like an intimidating and confusing process – like a map that is impossible to read. All you need is a little help to make sense of things, though. 

To find that help, talk to the experienced team at the Van Horn Law Group. We can help take the mystery out of bankruptcy. Your Florida bankruptcy attorney will walk you through the entire process, so you never have to navigate alone. 

Do not let changes beyond your control leave your financial future in ruins. Talk to our team today to learn more about how we can help!