Although physicians are known for making a lot of money, they too can run in to financial problems and may even find themselves in a position where filing for bankruptcy makes the most sense.
For instance, a Louisville pediatric practice, which was organized as a professional limited liability company, recently filed for Chapter 7 bankruptcy in a Kentucky federal court. The office had been in business for over 30 years, and, at the time of the filing, was owned by three doctors.
A few months ago, the doctors themselves became affiliated with a larger hospital and clinical group which serves patients in the Louisville area. The bankruptcy filings indicated that the physicians took a little under $60,000 in business property with them over to their new facility. They also indicated that the patients' records, about 7,000 of them, had been transferred.
According to the practice's paperwork filed with the court, the business had about $28,000 in remaining property that could be distributed to the business's creditors. The paperwork stated that, on the whole, the business owed $113,000 to different organizations.
This bankruptcy was filed under Chapter 7. Although businesses are permitted to use Chapter 7 bankruptcy, the end result of this type of business bankruptcy proceeding would be that what is left of the business is sold off, and the business officially closes its doors. Still, there are some advantages to a business's officially going through bankruptcy rather than simply shutting down.
If anything, though, this case illustrates that businesses of all types and individuals from all walks of life can easily run in to financial problems. When this happens, it is important for those affected to remember that bankruptcy may be an important step toward resolving these problems.
Source: Louisville Business First, "Long-time Louisville pediatrician practice files for Chapter 7 bankruptcy protection," Chris Larson, Feb. 22, 2018.