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Bankruptcy for Doctors and Lawyers Increasingly Common Under Chapter 11

Bankruptcies Increasing for Doctors and LawyersiStock_000005107511XSmall

The professional community is not immune to bankruptcy.  Many professionals are struggling to keep their practices above water as commercial real estate values continue to lag, hoards of new doctors and lawyers enter the workforce, and advances in legal and medical technology continue to whittle away at small town practices.  This has created a “perfect storm” for some small town medical and legal practices.  CNNMoney.com reported yesterday that many doctors are being pushed into bankruptcy.  The trend has accelerated in recent years, and has serious consequences for doctors and clients.  Chapter 11 bankruptcy filings by physician practices have spiked recently, noted Bobby Guy in the article, who is co-chair of the American Bankruptcy Institute’s Health Care Committee.  The ABI tracks bankruptcy trends tied to distressed businesses. The weak economy has taken a toll on doctors’ revenue, as consumers cut back on office visits and lucrative elective procedures, said Guy. Doctors also blame shrinking insurance reimbursements, changing regulations, and the rising costs of malpractice insurance, drugs and other business necessities for making it harder to keep their practices afloat. For more on legal and medical bankruptcies, pick up Argyle Publishing’s Attorney’s Handbook on Small Business Reorganization Under Chapter 11 (8th ed., 2013) or the ABI’s Health Care Insolvency Manual.

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