After the COVID-19 epidemic caused a severe decline in travel demand, Hertz, one of the biggest automobile rental firms in the world, filed for Chapter 11 bankruptcy in May 2020. High debt levels and rising competition from ride-sharing firms like Uber and Lyft had previously caused the company problems.
Hertz has been liquidating its fleet since declaring bankruptcy in order to raise money and reorganize its business. In order to lower its debt burden and emerge from bankruptcy as a stronger and more sustainable corporation, the company has also engaged in negotiations with its creditors.
The bankruptcy of Hertz has, nevertheless, significantly impacted the value of its stock. The company’s stock is currently traded on over-the-counter markets after its shares were delisted from the New York Stock Exchange in late 2020. Hertz’s bondholders and creditors are likely to be given precedence in any settlement or restructuring plan, so stockholders may not get their money back.
It’s important to remember that Hertz and Herc Rentals are two different businesses. The Dollar and Thrifty vehicle rental brands are also owned by Hertz Global Holdings, which is Hertz’s parent company. On the other hand, Herc Rentals is a distinct business that focuses on providing equipment rental services.
The answer to the question of whether a rental car agency can report you to collections is yes. The corporation has the right to sue you and turn over your debt to a collections agency if you don’t pay the rental fees or return the car on time. Your credit score may suffer as a result, making it more challenging for you to get loans or credit in the future. It’s crucial to comprehend why you were included to Hertz’s “do not rent” list and to take action to correct the situation. This may entail making up any unpaid rent, challenging any inaccurate charges, or presenting documentation of insurance or a current driver’s license.
In conclusion, the bankruptcy of Hertz has been difficult and uncertain for the business and its stakeholders. The corporation is taking action to restructure and come out of bankruptcy as a better and more competitive company, nonetheless. Investors don’t yet know what the future holds for the Hertz stock, but before making any decisions, it’s critical to be aware of the risks and possible outcomes.