Small community hospitals all over the United States are facing severe financial pressure to remain solvent. The pressure comes from two sources: the expansion of large medical companies and increasing costs. These factors have forced a small hospital in western Tennessee to go through a forced business bankruptcy under Chapter 11.
For people in eastern Tennessee, the filing of a bankruptcy petition under either Chapter 7 or Chapter 13 can feel like the first step on a long, dark and unpredictable journey. In reality, the decision to seek relief from debt via a bankruptcy proceeding will produce several immediate benefits. One of the most important is the automatic order for relief and the automatic stay.
Most businesses show signs of financial weakness before they cease operations or declare bankruptcy. Occasionally, a business will close without prior warning to employees or clients and commence a business bankruptcy proceeding. A high-end mental health treatment center in Auburn, near Knoxville, that focused on female clients recently closed its doors with no advance warning to clients or employees.
Anyone in our state who is wondering about the wisdom of filing a Chapter 7 bankruptcy should make an effort to understand the kinds of assets that cannot be claimed by creditors. These assets are usually referred to as "exemptions" because they are exempt from the claims of creditors.