Medical & Dental Practice Bankruptcy: Subchapter V
A practice can bill strong and still run short when payers slow-walk reimbursement, the buy-in loan comes due, and the equipment leases never let up. Subchapter V bankruptcy reorganizes that debt so the schedule stays full while the numbers get fixed.
Protect the practice, keep the schedule full
Owning a practice means carrying serious debt against income that arrives on the insurer's timeline, not yours: the loan you took to buy in, the imaging and the chairs, the lab and supply accounts. When reimbursement tightens, that gap turns into a cash crunch. Subchapter V reorganizes the debt into a plan you can run while you keep seeing patients.
Practice debts we restructure
- Equipment financing on chairs, imaging, and lab equipment, including leases that are really loans
- The loan you took to buy into or acquire the practice
- Lab, supply, and pharmacy account balances
- Buyout money owed to a departing partner or associate
- Lines of credit carrying you between reimbursements
- SBA and EIDL loans from the practice's leaner stretch
How Subchapter V helps practices
- Keep the practice open and patients on the schedule
- End lender suits and collection calls when the case opens
- Keep the equipment you need and restructure equipment deals that are really loans
- Work through partner buyouts and slow insurer receivables together
- Run the practice as the owner from first filing to discharge
How it works
A clear path for practice owners.
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1
Step 1 of 4
Free consultation
We review your equipment leases, your acquisition loan, and your aging receivables to gauge whether Subchapter V is the right fit for the practice.
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Step 2 of 4
File and stop collections
Filing puts the automatic stay in place, so lenders and collectors stand down while you keep treating patients on your usual schedule.
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Step 3 of 4
Build the plan
We assemble a three-to-five-year plan sized to collections the practice can reasonably expect once the receivables clear.
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Step 4 of 4
Keep practicing
After the court confirms the plan, you fund it out of ongoing production and the practice comes through intact.
Common questions about Subchapter V for Medical and Dental Practices
Will this affect my professional license?
Filing Subchapter V does not, on its own, cancel a medical or dental license. Licensing runs on a separate track from bankruptcy, and reorganizing the practice's business debt is generally not the sort of event that puts a license at risk. We flag anything specific to your board and your circumstances before we file so nothing catches you off guard.
What happens to my insurance and Medicare receivables?
The money payers still owe you is an asset of the practice, and reorganizing does not erase it. We account for slow and disputed reimbursement inside the plan rather than pretending the cash lands on time, and we work through any provider-agreement questions in general terms up front, since those turn on your specific payer contracts.
What happens to my equipment leases?
It depends on what each lease really is. Some equipment 'leases' are loans in disguise, for example when you can buy the gear for a nominal amount at the end. Those can be restructured in the plan like any other secured loan. A true lease works differently: you can keep the equipment by catching up the missed payments and staying current on the lease terms, or you can give back gear you no longer need. We review every lease to tell you which kind it is and what it means for the practice.
I am buying out a partner or owe an associate. Does that fit?
Usually it does. A buyout note or money owed to an associate is a business debt that can ride inside a Subchapter V plan, and we walk through exactly how yours gets treated during the consultation.