Posts Tagged: ‘Uber’

Judge Cancels Loan Debt for Man Who Upgraded Car for Uber

March 25, 2016 Posted by kingcade

An Illinois insurance salesman who became an Uber driver to improve his financial situation will be able to eliminate a nearly $10,000 auto loan debt. Federal Judge Jacqueline Cox agreed to discharge $9,786.61 of debt that Oswaldo Rodriguez owes to auto lender GM Financial for the new Chevrolet SUV he bought in October 2014.

“He genuinely thought that he could earn enough money through Uber to finance the debt,” Judge Cox said in a six-page opinion filed earlier this month in U.S. Bankruptcy Court in Chicago.

The ruling comes after Uber has become one of the most visible companies behind an emerging “gig economy,” where a number of Americans are making money through platforms like Uber, Etsy and Airbnb. But while almost 1% of U.S. adults earned income that way during September 2015, a recent study of bank transactions found that the work only supplemented, not replaced a full-time job.

The average monthly income for someone who provided labor via one of these platforms was $533, representing a third of that person’s total income, the study found.  People often think they can take on side jobs to avoid bankruptcy.

U.S. bankruptcy law allows borrowers to cancel some of their debts, but lawyers for GM Financial argued that the fine print does not allow a borrower to cancel a debt of more than $650 that came from buying a luxury item or service less than 90 days before the filing.

The Judge ultimately ruled against the lender, pointing out that in her opinion the term “luxury goods” does not include items that a bankrupt person needs for their “support or maintenance.”

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