Professionals and Bankruptcy

For most people, deciding to file for Bankruptcy feels much more like a moral decision than like a business decision. For a professional person, Doctor, Lawyer, Accountant or Engineer, filing for Bankruptcy represents not only bad luck or bad decision making, it also carries a fear of stigma, a fear of rejection. The good news is that the anti-discrimination provisions of the Bankruptcy Code make adverse regulatory action remote, if not illegal. The bad news is that, like everyone else, the professional filing for Bankruptcy will have to struggle with what that means in his or her life and make choices that make their future a successful one.

Professionals are also concerned that they will not qualify for Bankruptcy. Or, perhaps worse, they are afraid that their income or professional status will force them to become an expensive type of Bankruptcy case. Professionals are not treated any differently under the law than any other person filing for Bankruptcy. The one difference applies only to Doctors, who must show that their patient records and patient services are protected in Bankruptcy, in order to avoid the appointment of a Patient Care Ombudsman.

Many professionals will push the envelope of their troubles way beyond their comfort level in order to avoid seeking help in Bankruptcy. In so doing they may extend their financial woes out beyond the point where they can retain control over their important assets. Professionals who find that they are using more than 60% of their credit limits, or paying taxes late or not at all, or borrowing from high interest rate sources just to keep things afloat, should immediately do some realistic self assessment and consider seeking out an insolvency professional for help.

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