Monthly Archives: January 2014

Rise in Physician Bankruptcies

Why are doctors being driven to bankruptcy is a question that many physicians and patients are asking and concerned about. Indiana bankruptcy attorneys have seen an increase in the number of physicians coming to them for help. If you one of those hardworking physicians worried about money and having to file bankruptcy, you are not alone. The trend has been accelerating in recent years with many practices shutting down.  Physician bankruptcy not only affects practices of many doctors, it also affects patients who end up with less choices of getting nearby healthcare.

 

Factors Contributing to Recent Physician Bankruptcy Trends 

While you may think that malpractice filings are behind physician bankruptcy filings, you would be wrong. A combination of other factors can be attributed to the recent rise in bankruptcy among physicians. The weak economy has caused patients to cut back in doctor visits. Insurance companies and Medicare cutbacks have reduced reimbursements physicians receive. Medical malpractice costs have gone sky high with many specialty physicians such as OB-GYN’s having to self-insure in order to make ends meet. High prescription drug costs and business operating expenses and incremental changes in Obamacare have added to doctor’s woes making it more difficult to keep afloat.

 

Options to Help Physicians Get Out of Debt

There are alternatives if you seek help right away. By talking to an experienced Indiana bankruptcy attorney, you may be able save your practice and keep your doors open.

Physicians who are struggling may be able to keep their business assets and their practices by restructuring their debt and filing for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Filing for bankruptcy protection prevents your creditors from suing you and obtaining judgments against you.

 

Benefits of Chapter 11

Chapter 11 allows you to reorganize your business by reducing your debt with your creditors by agreeing to enter into a court-approved reorganization plan over a three to five year period. The good thing about Chapter 11 is it gives you time to come up with an effective business plan and reduce your debt at the same time. After you complete the plan, any unsecured business debts you may have are discharged by the Court. If you are looking for a second chance keep your practice and service your patients, Chapter 11 may be the right answer for you.

 

Indiana Bankruptcy Lawyers Assistance

If you are a physician facing financial difficulties, our Indiana bankruptcy lawyers at Walton Legal Services can help you sort out the best options for your business to get you out of debt. Whether you decide Chapter 11 bankruptcy is the right option for you or not, it is recommended that you speak with an Indiana bankruptcy attorney right away before you lose your practice and have to shut your doors.

 

Sources: http://www.naturalnews.com/040416_medical_bankruptcy_obamacare_doctors.html#ixzz2nYKDmhttp://money.cnn.com/2013/04/08/smallbusiness/doctors-bankruptcy/index.htmllg6

Alternatives to Bankruptcy for Indiana Business Owners

While many financially troubled businesses are opting for Chapter 11 to help them restructure their business so they can keep their business going and retain their business assets, Chapter 11 bankruptcy reorganization may not be the right solution for all businesses. Business owners who are not planning on staying in business and want to liquidate business assets without added time delays and costs under formal bankruptcy may opt for an assignment for benefit of creditors instead.

 

What You Should Know About Assignments for Benefit of Creditors

Here is what you should be aware of if you do choose an assignment for benefit of creditors:

  • An assignment for benefit of creditors is not for owners who want to stay in business.
  • It does not stay creditors from attempting to collect a debt against you.
  • It does not discharge any debt until you have repaid the debt in full.
  • What it does allow you to do is avoid filing a formal bankruptcy.
  • The assignment for benefit of creditors is a vehicle for you to transfer title and control of your assets to a trustee/assignee, who is a neutral third party.
  • The assignment gives the trustee/assignee the power and authority to sell your assets and pay off your creditors.
  • Any judgments or liens filed after the assignment cannot attach to the assets that are held in trust by your designated trustee/assignee.
  • If the trustee/assignee believes that operating your business for a short time is the right thing to do to increase the value of the assets, the trustee can do so. Such determinations may depend upon whether the trustee/assignee needs any state licenses to operate or to liquidate business assets.

How it Works

At the time of the assignment, the business owner must turn over all business investment records and books listing assets and liabilities as of the date of the assignment, a list of creditors and their contact information and any other outstanding debt to the trustee/assignee. The trustee/assignee must record the assignment with the Clerk of the Circuit Court in the county where the business is located or the business owner resides. The trustee/assignee must publish a notice for three consecutive weeks in a newspaper of general circulation in the county where the proceeding has been filed notifying creditors of the appointment of the trustee/assignee.

 

It is the responsibility of the trustee/assignee to notify all your creditors and other parties of interest including government taxing authorities. The trustee/assignee must have the business assets appraised, including any real estate, and prepare an accounting for submittal to creditors and the Court. There should be a date established for creditors to file claims. The Court will authorize the sale and sale terms. The sale may be private. The Court will review claims and allow or disallow the payment of the claims.

 

Indiana Bankruptcy Attorney Assistance

If you are a distressed business owner and need advice about getting out of debt, you should contact an Indiana bankruptcy attorney. The attorneys at Walton Legal Services can discuss Chapter 11 reorganization and bankruptcy options including an assignment for benefit of creditors as well as other options to find the best solution for your business debt problems.

 

Listing Your Bankruptcy Debts

When you file for bankruptcy, you must list all your outstanding debts on the bankruptcy petition as well as your assets. Debts include secured accounts such as home mortgages and car loans and unsecured debts such as credit cards, department store accounts, medical and dental bills, cell phone and other bills.

 

You cannot select which debts will be discharged under bankruptcy. The decision to keep your accounts open or to close them is up to your creditor. Your bankruptcy attorney has no authority to make these kinds of decisions either. Your bankruptcy attorney can negotiate with your creditors to try to get them to keep your account open if our can show that you are able to make the payments on time, but there is no guarantee that they will agree to do so. Also, keeping accounts open may depend on what type of bankruptcy you file.

 

Under Chapter 7, your unsecured credit card debts are generally discharged. Secured debt such as a home mortgage or debt secured by other collateral may be kept if your creditor agrees. Under Chapter 11, your debt is restructured. Any remaining unsecured debt is generally discharged after you complete your court-approved reorganization plan over a 3-5 year period.

 

Reasons Why you May Want to Keep Your Credit Card or Other Account

There are reasons why you may want to keep an account open such as the need for a credit card to travel or for an emergency. You may want to keep your department store charge open or other account if you have maintained a good credit history with a particular creditor. There may be a joint account or co-signer involved.

 

If you have a car loan or a home mortgage, you probably are going to want to keep your car and home if you can afford the payments. It is possible for you and your Indiana bankruptcy to negotiate a resolution to the debt so you may be able to keep both accounts. However, if at any time you default on your payment, the creditor can attempt to collect the debt against you after the bankruptcy discharge. This means that your lender could start foreclosure proceedings against you to foreclose on your home or your car finance company could repossess your vehicle.

 

Walton Legal Services: Indiana Bankruptcy Attorneys

A good Indiana bankruptcy attorney can explain how you can resolve your credit card debt issues and assist you with bankruptcy filing.  The attorney can answer any questions you may have regarding the bankruptcy proceedings and which debts you may be able to retain. Keep in mind that after your bankruptcy is discharged, you may be able to re-establish your credit by obtaining a secured credit card or getting a co-signer. Also, your credit will improve over time.

 

For questions about bankruptcy filing and listing your credit card and other debts, it is recommended that you speak with an Indian bankruptcy attorney.

When to File Chapter 7 or Chapter 11 for Your Business

If your business is having financial problems, you may want to consider filing for bankruptcy protection. If your business is a sole proprietorship or partnership, your personal liability is higher than if your company is a corporation. In a sole propetorship, you are considered responsible for 100% of the debts of your company. Creditors could go after your personal assets. While in a partnership, you and your partner are each responsible for your respective proportion of debts, you could also be responsible for 100% of the debts, if your partner does not have enough assets to cover your partner’s share of the debt.

 

If your business is a corporation, corporations are considered separate entries so you are not personally liable for your company’s debts unless you personally guarantee your company’s business loan or collateral securing the loan. Keep in mind also that your initial investment and that of your other shareholders in the company are at risk when your business files for bankruptcy. Similar to a corporation, if your company is a LLC, you may be personally liable if you guarantee a loan or collateral securing a loan

 

Chapter 7

 

Chapter 7 bankruptcy protection is used when a company no longer wants to stay in business. The company’s assets, including business equipment, are sold to pay off creditors. Chapter 7 relieves your business’s contractual obligations under a lease and gets rid of your business debts.

 

Chapter 11

 

Chapter 11 bankruptcy protection is used for businesses that wish to continue conducting their business and keep all their assets. Under Chapter 11, your business agrees to enter into a reduced debt reorganization plan with creditors, subject to the Bankruptcy Court’s approval. Basically a Chapter 11 is a reorganization and restructuring of your business. Under the reorganization plan, your company agrees to pay off its debt to its creditors over a 3-5 year period. After the plan has been completed, the bankruptcy is discharged.

 

Indiana Bankruptcy Attorney

 

Filing for business bankruptcy is complex. Before you decide to file for bankruptcy of your business, you should discuss the decision with an experienced Indiana bankruptcy attorney. An Indiana bankruptcy attorney can sit down with you and help you choose the best option for your business and your financial situation.  The attorney will be able to file the Petition of bankruptcy on your behalf, attend court hearings and negotiate the reorganization plan with your company’s creditors.