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https://nypost.com/2020/09/21/almost-90-percent-of-nyc-bars-and-restaurants-couldnt-pay-august-rent/ Originally appeared on New York Post
Nearly 90 percent of New York City bar and restaurant owners couldn't pay their rent in August, heightening the continued crush the coronavirus shutdown has inflicted on Gotham’s economy.
Eighty-seven percent of bars, restaurants, nightclubs and event spaces in the five boroughs could not pay their full August rent, according to data from 457 businesses surveyed between Aug. 25 and Sept. 11, in a new study released Monday by the nonprofit NYC Hospitality Alliance.It’s a 7 percentage-point increase from June and a four-point jump from July, darkening the dire picture for eateries desperately seeking relief following six months of partial — and in some cases total — closure due to COVID-19 shutdowns.Some 34 percent of this group said they could not pay rent at all last month, and only 12.9 percent were able to meet full payments.“Restaurants, bars and nightlife venues have been financially devastated by the COVID-19 pandemic,” said alliance executive director Andrew Rigie.“Even before the pandemic when operating at 100 percent occupancy, these small businesses were struggling to stay open. Now we’re seeing widespread closures, approximately 150,000 industry workers are still out of their jobs, and the overwhelming majority of these remaining small businesses cannot afford to pay rent.“The hospitality industry is essential to New York’s economic and social fabric, and to ensure the survival of these vital small businesses and jobs, we urgently need rent relief, an indefinite extension of outdoor dining, a roadmap for expanded indoor dining, covered business interruption insurance and immediate passage of the Restaurants Act by Congress,” he added.When asked if landlords were waiving rent in relation to COVID-19 hardships, just 40 percent of businesses responded in the affirmative — 28.5 percent said less than 50 percent of their rental obligations were waived in August, 43 percent said 50 percent and 28.5 percent said they were given a break on more than 50 percent of their rental fees.Meanwhile, 90 percent reported they have been trying to negotiate their leases, but their landlords wouldn’t budge.The study also comes ahead of the long-awaited partial reopening of New York City’s indoor dining slated for Sept. 30 at 25 percent capacity.New York City will be the last region in the state — and also a month behind neighboring New Jersey — to get the green light for the practice, despite a majority of the Empire State’s 57 counties outside the five boroughs being approved for the practice since June.“I’m not really surprised because the industry is devastated by this pandemic,” said David Rosen, owner of several eateries including Williamsburg’s the Breakers. He is also co-founder of the Brooklyn Allied Bars and Restaurants and a member of the New York City Nightlife Advisory Board.“The analysis around why folks are not able to get firm relief from their landlord, or renegotiate around long-term lease agreements or changes, is interesting because the narrative for the past few months has generally trended in a positive direction,” said Rosen.“I can understand why landlords have been reticent to renegotiate because people have been under the impression that we would reopen or get back to normal,” he added, saying he, too, is in different stages of ongoing discussions with his landlords and doesn’t expect to fully reopen his venues until at least next spring.“What’s concerning about this report is I would assume given the past two months and with outdoor dining unfortunately will be peak revenue season during this pandemic for restaurants. As we head into the winter, even with indoor dining on the horizon, I don’t think that 25 percent indoor will exceed what exists already outside. This ‘inability to pay rent’ trend will continue, if not worsen,” he said.“We understand the difficulties facing restaurants, which is why we’re protecting commercial establishments from eviction, allowing bars to sell cocktails via take-out and delivery, and cutting red tape so restaurants can easily expand outdoor dining,” said Jack Sterne, a spokesman for Gov. Cuomo.
Guidelines will be reassessed by Nov. 1 and restaurants may be allowed to increase to 50 percent capacity depending on positive compliance and infection data, according to state officials.–– ADVERTISEMENT ––

https://www.marketwatch.com/story/as-yellow-taxi-drivers-struggle-city-announces-six-month-pause-on-new-licenses-2020-09-17
 Originally appeared on MarketWatchTaxi drivers struggling to make ends meet have demanded medallion debt forgiveness and limits on ride-share apps   Helicopters circled and horns blared in solidarity as a fleet of yellow cabs shut down traffic on the Brooklyn Bridge on Thursday, the latest effort by the city’s beleaguered taxi drivers to draw attention to their cause and demand debt relief for their high-price medallion loans. “Seventy percent of the drivers are not working. The taxi fleets have most of the taxis in storage,” said Sergio Cabrera, a longtime cabdriver and member of advocacy group Yellow Taxi United. “In 21 years of driving, I’ve never seen it like this.” With anger among taxi drivers hitting a breaking point, the Taxi and Limousine Commission (TLC) planned to announce a six-month pause on new licenses for for-hire vehicles, a move that could stem the tide of new competition, including from disrupters Lyft LYFT, +0.94%   and Uber UBER, +1.80%  . A formal announcement is expected on Friday. But the move does little to address drivers’ main demand for debt relief. The city’s yellow-cab drivers felt the full force of the blow when the coronavirus pandemic hit New York, with trips plummeting 84% from their pre-COVID levels by early April. And while there’s been a slow trickle of returning passengers over the past several months and new relief efforts by the city’s TLC, drivers say it’s still not nearly enough to sustain business as usual — or to pay back expensive medallion loans. With Manhattan still largely devoid of office workers and tourists, Cabrera said, drivers are turning to the outer boroughs for fares. “In the outer boroughs where the average people live, there is much more movement,” Cabrera said. “Manhattan is not busy, it’s not functioning the way it should be. I don’t know when it’s going to come back.” The strain on the city’s taxi drivers is compounded by years of tightening margins and spiraling debt, as competition from apps like Uber and Lyft has flooded city streets, and declining values of the high-price medallions required to operate have left many drivers hundreds of thousands of dollars in debt. In 2018, then-taxi commissioner Meera Joshi characterized a spate of driver suicides as "an epidemic" in the industry. “COVID is just the latest problem,” said Carolyn Protz, a driver and member of Yellow Taxi United as well as the NYC Taxi Medallion Owner Driver Association. “Our problems as medallion owners go back much longer.”Members of the New York Taxi Workers Alliance, a union representing both yellow cab and Uber/Lyft drivers, had staged Thursday’s slowdowns on the Brooklyn and Queensboro bridges to draw attention to demands for debt forgiveness for medallion owners. Representatives of alliance did not respond to multiple requests for comment. As with many issues facing small-business owners in the pandemic, city officials say that further support and bailout money should come from the federal government and financial institutions. rather than local government agencies already facing budget cuts and potential layoffs. “The city is obviously in a financial crisis. There’s not a current opportunity for a traditional bailout for medallion owners who are indebted to banks,” TLC Commissioner Aloysee Heredia Jarmoszuk told MarketWatch. “It would require federal action and some regulation for banks that may have taken advantage of medallion owners who find themselves with higher interest and untenable loans.” Last week, it was reported that Connecticut-based investment firm Marblegate Asset Management LLC has recently forgiven $70 million worth of medallion debt, and in some cases capped individual owners’ debts at a ceiling of $300,000. The average driver-owner carries $600,000 in $600,000 in medallion debt, according to the TWA, and over the past decade, medallion prices had been inflated from around $200,000 to as high as $1 million, an investigation from the New York Times found last year. Advocates say it’s a helpful step, but more aid is needed. “Even the amount that they’ve lowered the debt, it’s an undoable amount of money to make those payments on a monthly basis,” said Cabrera, the cabdriver and advocate. “Most of the banks have a forbearance going on medallion payments right now, so that has helped. But we need massive debt relief. We need the city to step in.” At the height of the pandemic, the TLC launched the Get Food NYC food delivery program, paying licensed taxi drivers to deliver meals to vulnerable New Yorkers. More than 20,000 drivers have participated in the delivery of over 100 million meals since March, according to city data, collectively earning close to $40 million, Jarmoszuk said. “We have a lot of problems, we cannot deny that,” Jarmoszuk added. “These things did not happen overnight. It could have been far worse, but we were able to put supports in place to lessen the blow. Solutions [will take time] but they will happen.” Still, drivers are concerned about their debt, and what the industry will look like on the other side of the current crisis. “My concern is for the future, after COVID,” Protz said. “Going forward, there need to be many less for-hire vehicles [on the road].”  “I’m in the Bronx by the [Bronx Terminal Market],” Cabrera said. “I’ll sit here until a call comes through or someone comes out of the mall. The days are long. The income is not where it needs to be to make any kind of payment on what I owe.”

Financial writer Liz Weston (@LizWeston) writes that many people who could benefit from bankruptcy don’t file because of fear and misplaced optimism.  See Fear of Bankrutpcy Holds Too Many People Back.
This is the second time that Liz Weston has suggested that more people consider filing bankruptcy (Do Debt Management Plans Work?), and this is notable since she is something of a financial guru with a long track record of encouraging Americans need to create spending budgets and advising many to seek assistance through credit counseling.
But something has changed in her approach. Maybe she is just seeing the futility of trying to dig out of debt when wages are stagnant, health insurance is non-existent or insufficient to cover ongoing medical bills, and it just seems like wasted effort to pay debts when new ones just spring up overnight.

About 14% of U.S. households — or roughly 17 million — owe more than they own, according to Federal Reserve Bank of New York estimates. Many of these households could benefit from having their debts wiped out, but fewer than 1% of U.S. households actually file for bankruptcy each year. Last year, there were 752,160 personal bankruptcy filings. Researchers refer to this gap as “missing bankruptcies” — the filings that could be happening, but aren’t.

THE FEAR FACTOR:
So what is holding Americans back from filing more cases? In a word, fear. Fear of living with bad credit. Fear of the judgment of future employers. But Weston says much of this fear is misplaced.

A bankruptcy filing remains on your credit reports for up to 10 years. But credit scores can start to recover soon after you file. It’s possible to get a VA or FHA mortgage two years after a bankruptcy. Most loans require you to wait at least four years.
People can start to rebuild credit a few months after their bankruptcy case is discharged by getting secured credit cards, which require a deposit, or credit-builder loans, available from some credit unions, community banks and online.

Yes, credit scores begin to recover as soon as the case is filed. Why is that?
There are two reasons bankruptcy enables the healing of credit scores.  First, once a case is filed all negative reporting stops. Creditors no longer report late payments, collection accounts, judgments, and other negative information.
Second, filing bankruptcy improves the single biggest factor in your credit score–the Debt-to-Income Ratio.  About one-third of your credit score is based on how much debt you owe compared to how much income you earn.  The higher that ratio the lower your credit score. Filing bankruptcy eliminates the debt, so the debt-to-income ration is immediately improved.
UNREALISTIC OPTIMISM:
Weston claims that too many people have an irrational belief that things will get better.

Misplaced optimism can also be a problem. The same hopefulness that causes people to take on too much debt also can lead them to put off the reckoning.

What Weston calls “misplaced optimism” is what I call Around-The-Corner Thinking.  “As soon as I get this debt paid then I can start saving money.”  The problem is, once you pay off that debt or solve that problem, a new set of problems pop up.  So you adjust your plan and will start saving money after that problem is solved, but before you know it yet another problem arises.
The problem with around-the-corner thinking is that it fails to recognize that new problems ALWAYS continue to arise.  That’s actually the norm.  The concept that we can start to achieve financial goals AFTER today’s problems are solved is delusional.  Today’s financial woes never end.  Employers continue to lay off workers. Health insurance companies continues to not pay claims. Recessions continue to occur.
So instead of delaying making contributions to that retirement plan, instead of delaying saving for the house down payment, instead of delaying college until after the credit card debt is paid, start doing that today and consider filing bankruptcy to solve a debt problem that is not going away. Stop being overly optimistic and face the music of you debt problem. It’s not going away.
Am I taking Liz Weston’s advice too far? Gosh, this sounds so bleak!  Well, by all means, we should find ways to pay back debt if possible.  But do you really have a Plan to get out of debt, or is it just unrealistic optimism?
It’s time to stop fearing the debt problem and time to start addressing it realistically.

Consumer Finance Protection Bureau Announces They Don’t Chase Underground Debt Collectors “We are unable to send your complaint to the company for a response.” That’s what the Consumer Finance Protection Bureau told Chuck Sterling. “The company is not in our complaint system.” Chuck, a former client, received an email today, threatening to “take him into […]
The post Consumer Finance Protection Bureau Won’t Chase Underground Debt Collectors by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.