Discharge of insurance obligation

[despritfreya]

Question for OP:

1. How much tax is owed?

2. It is payroll or income tax or both? If payroll has it been assessed against you personally (6672 penalty) or just against your PC?

Des.

[URODOC]

No payroll taxes are involved. I dissolved the LLC at the beginning of Dec. Everything is paid up to date.
Overall liability is about $350k

[despritfreya]

If your income tax debt is over $350k I doubt you would qualify for a 13. The unsecured debt limit is approx $360k. Add to the taxes any other unsecured debt you have and there you go. . . You would end up in a Chapter 11 if you were attempting to reorganize the tax payments through bk.

A Chapter 7 will only get rid of taxes that meet the test for dischargeability. You would have to deal with the taxing agencies on your own for the balance.

Des.

[URODOC]

I guess that's why Chapter 7 is being discussed. I definitely do have taxes that are elibible for discharge.
Chapter 11 is obviously too expensive, and since I have no LLC anymore what would be the point?
Any role for 7 & 13 in this case?
I have a lien on my house which I know will not go away, but I can pay down over the next few years.
The question is the taxes for 2009 and 2010 which would not be dischargeable. Those plus the lien still leave me with a big nut.

[despritfreya]

Don't poo poo a Chapter 11. It is a very viable alternative to a Chapter 20 (7 then a 13). You keep control of your assets, you are your own Trustee. Yes it is more complicated and more expensive, but, in the end, can work just fine.

Having said that, a 20 can also work. Discharge what you can in the 7, come back and pay what you can't discharge in the 13. The problem I have found with bankruptcies for physicians is that the tax burden that cannot be discharged still keeps them over the debt limits for a 13 hence doing the 11 from the start. Add to that any outstanding student loans (if that is a factor for you) and all the more reason to look at the 11.

Des.

[iv65536]

The insurance premium is nothing more than a general unsecured debt that is dischargeable. However, the carrier will deny any coverage should a claim arise. While this is bit "over the top", you may want to list all patients that received services during this period as potential creditors classified as "for info only" with nothing owed - or pay for tail coverage if you can.

I do not know if a claim for pre petition malpractice will be discharged, even if you are a "no asset" case as the potential claimant is unknown and would not have been made aware of your bk. I have never done research on this particular issue but I suspect there is case law on it.

Interestingly I just had a case where the "malpractice" claim was initiated post petition for a pre petition alleged wrong, something my client was not aware of at the time we filed the case. My client had coverage so we added the patient to Schedule F and sent a letter to the patient's attorney to send us a stipulation to lift the stay so that the patient could proceed with seeking recovery from a 3rd party (the insurance provider).

Des.

Listing the individual patients as creditors I think would be very problematic and would produce HIPAA issues.

[despritfreya]

Listing the individual patients as creditors I think would be very problematic and would produce HIPAA issues.

Not positive but don't think so. . . one is not divulging type of treatment or even that the person is a patient. All one is doing on Schedule F is listing a name, address, "for info only" and $0.00 owed. But, our good doctor (OP) might be able to shed some light on that one.

Des.

[URODOC]

There would be obvious problems with HIPPA. Also, you would have to list thousands of patients! The statute of limitation only starts when the "injury" or whatever is discovered, not when it happens. A patient could walk around for years with a sponge in before it was discovered.
The real question here is whether or not the insurance company would refuse to cover all retrograde claims or just for this 3 month period. In addition I do have a tail policy.
This is all very confusing.

[despritfreya]

There would be obvious problems with HIPPA. Also, you would have to list thousands of patients. . .

I think the question posed by iv65536 was more in the nature of "what if" as opposed to your specific situation. Sometimes we do go off on tangents. And yes, listing all patients would be problematic but, on the other hand, if HIPPA precludes even the listing of a name and address in the context of a bk how is a medical care provider guaranteed the fresh start that is the cornerstone of bk? Food for thought.

The real question here is whether or not the insurance company would refuse to cover all retrograde claims or just for this 3 month period.

I would think that if you had a year policy and opted to pay it quarterly but failed to, the insurance provider would deny coverage for any claim arising during he policy period. Just a guess.

Des.