Don’t lose hope even if pandemic causes financial, emotional turmoil

The dental profession incurred many serious problems during the coronavirus pandemic. These problems ranged from severe financial and emotional problems to the lack or relationships with patients, many of whom had become friends. 

During the last 10 to 15 years, the dental profession saw tremendous financial growth, higher income levels and stability. There was a surge in dental service organizations (DSOs), small two to three dental practice partnerships acquiring others, and solo practitioners who flourished both financially and from a growth standpoint. The dental community had reputations that were looked at on a high level by the general public and peers. Equipment sales companies and dental supply houses were gaining market share having increases in gross revenue and net income.

When COVID-19 struck, dental professional practitioners began laying people off, cutting hours and reducing the compensation of employees. When the coronavirus became rampant, tensions rose, many dental practices were forced to close and there were 24-hour, 7-day a week lockdowns forced at home.  

Sickness and death statistics were coming into the media and remitted to the public from everywhere in the United States and the world. Sharing a space with another for 24 hours a day and seven days a week became difficult since there was no break from each other. The dentist and his or her spouse or partner had to live with each other on a constant basis without separation. This condition caused some people-including dentists-to see no choice but to think about divorce proceedings because stress levels were so high at home without a workplace or a dental practice for a respite. Besides the emotional challenge of living together, the income flow was at the level of a drought.

A problem related to the patient income flow being so low was that the bills continued to come to the practice regardless since supplies had been received.  Equipment was ordered and accepted at the office and there were monthly loan payments to be made. There was little to no cash flow available to pay those bills.  

Prior to deciding to prepare or to file for a divorce, was there some type of mediation or resolution conference between the parties?  

A divorce filing can always take place so there really was not a rush to do so if any possibility existed to resolve the issues that caused some of the problems. If there was no attempt at reconciliation, mistakes were being made. If the financial problems were part of the problem and tensions, discussions with the dental practice advisors would be a good approach since a blue print for the future financial outlook of the dental practice would be a good thing to use as a talking point. It may have helped to relieve some of the money pressures now existing.

Solving financial problems by discussing potential bankruptcy solutions is another approach to settling severe financial conditions. Getting protection from creditors is the concept behind the bankruptcy filing. It is a drastic situation for a horrible financial problem that does not seem to have a remedy with additional cash flow from patient income on the near horizon. The dental advisors and a bankruptcy attorney should be on the list for retention to see if this was the right way to go.  Sometimes when an outside independent party looks at a situation, there is a different opinion about how severe the problem may be.  

Reputation, recovery from the filing and personal emotions about it are important items to consider as well as the protection from the creditors that the filing of the bankruptcy petition offers. The dental advisor can discuss these important factors with the dentist after preparing projections for the future cash flow of the office, when it opens for business.  The bankruptcy attorney can help with the financial effect of the court filing and how it may affect future relationships with dental suppliers, equipment sales companies and credit worthiness, especially with lenders. 

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The onslaught of dental supply bills, equipment loan payments and general office overhead:

The dental supply house, equipment sales company and lender should be open minded to a discussion about the state of financial affairs of the dentist who is suffering so much financially. The dentist should not be surprised if he or she is part of a much larger group of professionals in the same financial condition. The dental supply house and the equipment sales people have probably heard this story before from others during the crisis caused by the virus. They don’t want the dentist to file for protection from his or her creditors because that is them and they know that they will suffer financially by not receiving all of the payments that are due. That filing would leave the creditors with much less than if something could be resolved among them. 

As an example, if the terms of the equipment loan were extended so that the monthly payment was lower, the situation could be brought current and no one’s relationship with the supply house or lender would suffer. The call is an important first step to resolving the problem since these creditors would know what was occurring. The same concept of talking to the creditor involved with the dental supply house, landlord, and all those who have payments that are in arrears may lead to some debt forgiveness or reduced monthly payments with an extension of the time needed to pay. 

As long as the dental practice financial advisor offers hope and a good income projection once things have returned to a somewhat normal time, the one-on-one approach may result in some good surprises. What may have been an excellent long-term relationship can still be one. If all the parties are willing to talk about how to settle the problem and to allow the dentist additional time for his or her payments to be made to the supply house and the other creditors, things will not seem so bad. 

It is important to approach the dental practice financial advisor who probably has experience with these types of financial matters so an alleviation of the problems will occur.