The decreasing value of its vehicles and declining profit margins put significant strain on the company's financial health. With approximately $19 billion in debt and a sharp decline in travel due to the pandemic, Hertz was forced to file for bankruptcy.

Contrary to some headlines, Hertz did not go out of business; rather, the company filed for Chapter 11 bankruptcy protection in May 2020. This was a strategic move to restructure its massive $19 billion debt during the COVID-19 pandemic, which saw travel demand—and thus car rental revenue—drop to nearly zero overnight. Hertz successfully exited bankruptcy in June 2021 after being bought by a group of investors and has since undergone a massive "Back-to-Basics" transformation. As of early 2026, Hertz is a publicly-traded, functional company, though it has faced recent headwinds. These include high costs associated with maintaining its electric vehicle (EV) fleet and significant financial pressure from an unfavorable "residual value" environment (where used cars aren't selling for as much as expected). Despite an "earnings miss" in early 2026 due to government shutdowns and fleet recall volumes, management maintains that the company has a "robust liquidity position" and expects to return to profitability by the middle of 2026.