Prominent doctor’s bankruptcy case has important lessons

| Mar 22, 2017 | Personal Bankruptcy |

A well-known New York doctor, whose patients have included the former governor of New York as well as noted television figures, recently filed for individual bankruptcy. The doctor states that while at one point he was a successful “anti-aging” doctor, he has fallen on hard times, in large part because of a heated and protracted divorce battle with his now ex-wife. He claims he owes $5 million in litigation and defense costs.

The doctor’s ex-wife has a slightly different version of events, claiming that the real reason he filed for bankruptcy is to avoid alimony payments, of which, the wife claims, he owes $500,000 in back pay.

Indeed, the doctor has had several brushes with the law of late. While his two-week jail sentence had to do with his trying to access protected documents related to his custody proceeding, the doctor has also had to settle with the state Attorney General in a consumer protection case, as he falsely represented that his services would be covered by insurance. He also pleaded guilty in connection with allegations that he groped a woman.

Still, the doctor’s case presents two important lessons. The first is that, subject to some important exceptions, bankruptcy can give relief from the harshest effects of a bitter divorce proceeding, including, potentially, relief from litigation costs and fees. Second, the doctor’s millions and assets and debts made him a good candidate for a Chapter 11 bankruptcy, even though a Chapter 11 reorganization is normally used for businesses to manage debt.

The doctor’s case should give hope to those who may be in hard times, but who are still earning an income. Using bankruptcy to discharge debt or to otherwise get financial relief and a fresh financial start in life is possible.

Source: New York Post, “Scandal-ridden doctor blames bankruptcy on $5M divorce suit,” Julia Marsh, March 14, 2017

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