Bankruptcy Options for Owner-Operators and Small Carriers

Truck about to be repossessed? Filing stops it. Call first.

Diesel reached $5.85 a gallon on September 4, 2026. That is an all-time high, above the June 2022 record, and it rose 17 cents in two days. Freight rates did not move with it. The Owner-Operator Independent Drivers Association described the position directly: with rates already low, a sharp diesel increase eats whatever margin a small trucking business has left.

For a one-truck or five-truck operation, that shows up as a truck note larger than what the truck is worth, a fuel card carrying working capital it was never meant to carry, and a factoring arrangement that costs more every month.

Can a reorganization keep your trucks running?

Three questions. Nothing is sent anywhere until you choose to contact us.

1. Is your truck or equipment worth less than what you still owe on it? Yes No

2. Do you still have an active authority and loads coming in? Yes No

3. Is your total debt, business and personal, under $3,424,000? Yes No

A reorganization is very likely available to you, through Subchapter V if you run an LLC or corporation, or Chapter 13 if you operate in your own name. Equipment loans can be written down to what the equipment is worth, and repossession stops the day you file.

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You may still have options, including Chapter 11, a structured wind-down, or negotiating with the equipment lender from a position of strength. Call before the truck is repossessed.

Call (610) 255-7500 Ask which chapter fits

The two routes that usually fit

Subchapter V, for LLCs and corporations

If the operation is an entity and total debt is under $3,424,000, Subchapter V lets you keep the authority, keep the trucks running, and pay projected disposable income over three to five years. Equipment loans can be written down to the value of the equipment, which matters when a tractor financed at 2022 prices is worth far less today. No creditors committee, no absolute priority rule, and you keep ownership.

Chapter 13, for sole proprietors

If you operate in your own name with a personal guarantee on everything, Chapter 13 handles the business debt and the household debt in one plan, stops repossession of the truck, and can cure a mortgage arrearage at the same time.

What to do before you file anything

Do not let the truck get repossessed first. Once it is gone, the reorganization has no revenue to reorganize.
Do not sign a new factoring agreement or fuel advance to cover a note payment. It usually adds a secured creditor with a lien on your receivables.
Do not hand over the authority. An operating authority has value, and it is easier to keep than to get back.
Gather the last two years of settlement statements and the current equipment payoffs before the first call. That is most of what we need to tell you which chapter fits.

We represent owner-operators and small carriers in PA, NJ, NY and MD.

Call (610) 255-7500

Frequently asked questions

Can bankruptcy stop my truck from being repossessed?

Yes. The automatic stay stops repossession the moment the case is filed. If the truck has already been taken, it can sometimes be recovered, but acting before repossession is far easier.

Can I keep my operating authority in bankruptcy?

In a Subchapter V or Chapter 13 reorganization, yes. You keep operating, keep the authority and keep hauling while the plan is confirmed.

Can bankruptcy reduce what I owe on my truck?

Often, yes. In Subchapter V, and in many Chapter 13 cases, the secured loan can be reduced to the current value of the truck, with the remainder treated as unsecured debt.

Which chapter is right for an owner-operator?

Subchapter V generally fits an LLC or corporation with debts under $3,424,000. Chapter 13 generally fits a sole proprietor with regular income. We sort that out in the first call.

Sources: Axios (Sept. 4, 2026), quoting OOIDA; Epiq AACER and American Bankruptcy Institute filing statistics. Figures current as of September 2026.