Malpractice lawyer says this about BK...

[newbeginning]

Just to give some background:

My wife was diagnosed with Stage IV breast cancer back in December '07. She has made a miraculous recovery (no cancer, thank GOD!), but is dealing with other related issues. We have decided (not lightly) to take legal action against former OBGYN, whom, we feel, should have taken further steps in the past to follow-through on some concerns my wife expressed.

Anyway, we finally got a malpractice lawyer to take the case. He says that it would be best not to file and that he could inform creditors that if there is an award, that they will be paid.

Mind you, we stopped paying creditors (most) back in December and many are banging on the door.

My question is, if anyone can help...:

1. Will creditors desist on calling if they are aware of the pending lawsuit?
2. Knowing the nature of medical malpractice suits, will they (creditors) wait until there is an outcome? (maybe for many months)
3. Don't want to sound cynical, but could the malpractice lawyer be worried, if all goes well, that he may get less than hoped for?
4. In general, what are the pros and cons if I hold-off on BK and let malpractice lawyer take care of creditors?

Anyone?

Thank you!

[arkienurse]

well, no bk advice for you, but I am so glad that your wife is doing better for now. I pray that she continues to do well.

[HHM]

Just to give some background:

My question is, if anyone can help...:

1. Will creditors desist on calling if they are aware of the pending lawsuit?
2. Knowing the nature of medical malpractice suits, will they (creditors) wait until there is an outcome? (maybe for many months)
3. Don't want to sound cynical, but could the malpractice lawyer be worried, if all goes well, that he may get less than hoped for?
4. In general, what are the pros and cons if I hold-off on BK and let malpractice lawyer take care of creditors?

Anyone?

Thank you!

First, I am glad things appear to have worked out, now to answer your questions.

1. Who can say, it would be up to the creditor to decide to desist, there is no legal process to force them too. I suppose you could offer them a lien on the judgement, but most major creditors won't do this because of the uncertainty of collection and the length of time. Short answer, they may desist, but I would not count on it.

2. Already answered in question 1.

3. I doubt it. First, creditors would have to get a judgement against you and then file a lien against the award. Your attorney will likely file an attorney's liens for his fee which would be superior to judgement creditors. Don't worry, your attorney will get paid.

4. You probably should hold off, the MAJOR con with filing BK with a pending lawsuit is the award becomes property of the BK estate; unless your state has an exemption (most don't), the trustee usually gets most, and sometimes all of any judgement award you would be entitled too (minus your attorney fees, )

[Flamingo]

One thing you need to know....your case can take years if the doctor fights your lawsuit. There are malpractice lawsuits handled by our firm that have been going on over 4 or more years. Don't worry about your attorney - he wouldn't have taken the case on if he didn't think there was any chance of recovery. I remember your previous postings and I responded to you then about your situation.

I would listen to your attorney and HHM as to not filing. The creditors will come after you especially if your lawsuit takes a long time and your attorney can hopefully advise you how to handle them during that time.

Best of luck to you - keep us informed as things progress....and I am very happy to hear about your wife and how she is doing!

[newbeginning]

Thank you all. It has been a harrowing experience watching my wife go through all of this. It has been a miracle, i believe, that she has made it through this as well as she continues to...

My malprac attorney seems to think that we have a good case. Our financial situation is ever more deep and a fair award would go a long to way to helping us deal with our CC debts and mounting medical bills ($100K+ combined). The attorney has suggested that I provide all of our creditors and he will write them about our situation. At least this will stop phone calls...

Also, if we do file, the creditors are ONLY entitled to amount we owe correct? Or do they also get to take whatever court/legal expenses that they had to endure?

Here is a question that should be obvious, but wanted to ask anyway:

If we do not go through with BK, and we do not plan to, and we manage to repay creditors with the award, if any, our credit score will/should immediately return to a high level, correct?

Anyway, thank you. Now the long vigilant journey begins to make certain that my wife does not go through this again....

[keepmine]

If you file, the lawsuit is the property of the bk estate and the trustee can do with it as he pleases. He may well contact defendants attorney and offer to settle for the amount you owe your creditors leaving you with nothing.
Or, defendants lawyers will find out about the bk doing basic opposition research and call the bk trustee and make him a settlement offer of the same amount.
Don't count on getting anything from the lawsuit if you file bk. Always remember, Mr./Ms trustee represents the interest of your creditors.

Paying old debts won't help your credit score at all. The only help will come as accounts age and finally, 7 years from chargeoff fall off the report.
Do a search on creditboards about how paying old chargeoffs without a pay for delete agreement won't help. And, most creditors won't accept PFD since it will violate their contract with the CRA's.

[newbeginning]

Thanks. It looks like holding off as long as we can before dumping this on our malprac attorney is the road we will take. In other words, we'll live with the phone calls until we get something that will force our hand.

This is all so nerve-wracking...too much going on all at once.

[keepmine]

Thanks. It looks like holding off as long as we can before dumping this on our malprac attorney is the road we will take. In other words, we'll live with the phone calls until we get something that will force our hand.

This is all so nerve-wracking...too much going on all at once.

Well, you are a Texan and have a lot of protection from creditors that others don't have.
First of all, they can't garnish wages so, if you get sued just keep a minimal amount in the bank or, go to a cash only existence.
I'm just thinking out loud here but, not sure I'd mention the potential litigation to your creditors. The SOL in Tx. is 4 years. See if you can run out the clock. You just may get lucky. Maybe only a few creditors will bother suing if they see judgments ahead of them.
If not, once you get the settlement, put it in things that are exempt assets and wait awhile longer before you file.

[Phillymanhere]

newbeginning,

I wish you luck on the malpractice suit, but I want to offer a caution. To be clear, I am speaking to myself as much as I am speaking to you.

I think it's a mistake to "count on" the suit going your way. Potentially a major mistake. I do not know the details of your case, but for a lawyer to say you have a "good case" doesn't strike me as meaning all that much. It just means the lawyer is comfortable making a legal argument on your behalf and thinks it has a good chance of winning. But define "good chance"! ... Is it a 95 percent chance of winning? A 90 percent? A 50 percent chance?

A lot of people with financial problems, in my experience, are folks who "count on" all kinds of bonuses, gifts, inheritances, investments, and business schemes that never pan out. A few years ago, I counted on a windfall from a long-term project I was working on. I never got a dime off this project. A year ago, while I was still in denial, I counted on the proceeds of an investment recommended by a friend who is pretty sharp about investments. I ended up losing money.

So, I humbly counsel that when it comes to finances, it is best not to count on potential windfalls of any kind. I sense from your post that you are thinking you have a 75 percent (or higher!) chance of winning this suit and getting a windfall. I think it's best to reduce those odds to 20 percent. Make the windfall at most plan B. My father, a man who always managed to save money, would in fact put the success of a lawsuit as a plan D or E. He would totally not count on it. So whenever he got a break or an unexpected score, it truly was a windfall.

In fact, I can see in my own life where anticipation for a windfall made my financial condition worse. Why? ... Because when I convinced myself that the big score was near, I started to act and think as if it the winfall was guaranteed. And I often incurred additional debt.

Just a few thoughts. I do hope you win the suit.

[Flamingo]

Thanks. It looks like holding off as long as we can before dumping this on our malprac attorney is the road we will take. In other words, we'll live with the phone calls until we get something that will force our hand.

This is all so nerve-wracking...too much going on all at once.

Newbeginning - you state in an earlier post above that your malpractice attorney is going to write the attorneys about your situation and for you to provide him with a list of them. Then you mention directly above that you are going to hold off as long as you can before dumping this on your malpractice attorney. Since you are represented by an attorney now as to your situation, he has advised you what to do. I would not further question the process and listen to what he tells you. If it is bothering you this badly, advise your attorney and ask if he can have another one of his colleagues advise you as to your BK situation to put you at ease. I'm sure he has been through this before as a malpractice attorney because most people who do file malpractice claims have huge medical bills or other bills run up due to the situation/injury. He would not tell you not to file if he did not think it was in your best interests. If you are not comfortable with the attorney and what he is advising you, seek other counsel.

[Flamingo]

Sorry - in my first sentences above, I meant write the "creditors" not "attorneys."

[newbeginning]

Thank you for your responses.

I am not nearly as confident in the case as our attorney seems to be. The pessimist in me. In fact, as much as I "think" about the prospect of getting some kind of award, we do not live in anticipation of it. If no award, then we file as originally planned. If so, we take of care of our financial obligations and move on.

I will be discussing further just exactly what the malprac attorney intends to do and what it means for us. I trust the attorney ("recruited" by trusted legal friends). I just worry about the prospect of creditors "rushing" to further legal action once they find out that there is a lawsuit in the making.

Thank you.

[Mark80]

Once your debts go into collection can't you send them a letter to stop any further contact to you outside of written? I don't know where I read that (maybe here) but if its true you could do this and atleast stop the phone calls. I have some debts passed due and just turned my ringer off and I have any friends and family call my cell if its an emergency!

[Phillymanhere]

New,

I feel better hearing this. Like I said, I was talking as much to myself as to you .... by the way, have you approached this from the other end? Have you scheduled meetings with bk attorneys and get their perspective on the best strategy?

You'll need to find someone really good, maybe a trustee would work here. But I think it would be good not to take a malpractice attorney's wisdom as the truth regarding bankruptcy. I'm thinking you need the bk attorney's view as well.

[AngelinaCat]