Bankers Healthcare Group Lawsuit in New York, NY

Bankers Healthcare Group (now BHG Financial) is a financial institution that usually files lawsuits against debtors who fail to pay their debt. If you are being sued by Bankers Healthcare Group, an attorney can represent you in settlement negotiations to ensure that you can get the best deal from the claim.

Bankers Healthcare Group Causes of Action

Bankers Healthcare Group normally files cases against debtors on the ground of breach of contract, unjust enrichment, and accounts stated. Breach of contract happens when one party fails to comply with his obligations under the contract. There is unjust enrichment when one person receives a benefit at another person’s expense that is not intended as a gift. Account stated is another cause of action based on a contract between a creditor and debtor and manifestation of assent by a debtor to the creditor’s stated sum as the correct amount due and demandable.

From all these causes of action, the easiest cause of action to prove is account stated because it usually requires a statement of balance due (such as a monthly credit card account statement) and a manifestation that the debtor accepted the statement as correct.

Possible Defenses

Possible defenses in a claim for amount due by the Bankers Healthcare Group includes, but is not limited to, statute of limitations, bankruptcy, and mistaken identity. The type of defense available depends on the unique circumstances of your case.

Payment of Amount Owed

When a claim has been filed against you by Bankers Healthcare Group for payment of debt, the best strategy is to negotiate. You can either pay the amount due in installments or negotiate to pay a smaller lump sum amount. BHG will generally agree to receive a smaller lump sum amount than receive payments in monthly installments over a long period of time.

How BHG Loans Are Structured

Bankers Healthcare Group, now operating under the name BHG Financial, focuses on professional and small-business lending, with healthcare professionals being a historic core of its customer base. The typical BHG loan is an unsecured commercial loan in amounts ranging from $20,000 to several hundred thousand dollars, with rates and fees that often exceed what a traditional bank would charge. Borrowers sign a promissory note, a personal guaranty (because the loans are typically made to a professional practice with a principal who guarantees personally), and a series of ancillary disclosures. The loan documents usually contain a confession of judgment clause, a New York choice of law and venue clause, and an arbitration option that BHG can invoke at its discretion.

Confession of Judgment Clauses

Many BHG loan documents include a confession of judgment (COJ) executed at the loan closing. New York amended CPLR 3218 in 2019 to substantially limit the use of confessions of judgment, especially against out-of-state debtors. The current law makes it much harder for BHG to enforce a New York COJ against a borrower who is not a New York resident. If you signed a COJ as part of a BHG loan and BHG has now filed it as a judgment against you, the timing and details matter — there may be strong arguments to vacate the judgment if New York's jurisdictional requirements were not met.

Personal Guaranties

BHG loans are typically made to a professional entity (a PC, PLLC, or similar) and personally guaranteed by the principal. When the entity defaults, BHG pursues both the entity and the guarantor. The guaranty is the reason BHG cases so frequently involve personal assets, including wages, bank accounts, and homes. Negotiating a settlement is usually an exercise in establishing what the guarantor can actually pay and persuading BHG that pursuing collection beyond that amount will yield no additional recovery.

Negotiation Strategy

BHG, like most commercial lenders, would rather settle for less today than spend years trying to enforce a judgment. The factors that drive BHG's settlement posture include:

• The age of the debt and the length of time it has been delinquent.
• The strength of the documents — whether the note, guaranty, and any COJ are clean and enforceable.
• The borrower's apparent ability to pay (which BHG will research by pulling court records, tax records, and public asset searches).
• The presence of defenses, such as fraud in the inducement, usury, or improper transfer of the loan.
• The cost and burden of continued collection efforts.

We have negotiated BHG settlements at significant discounts to the alleged balance, sometimes for 40 to 60 cents on the dollar, depending on the circumstances. Lump-sum settlements paid quickly typically get the biggest discount; multi-month installment settlements get smaller discounts.

Bankruptcy and BHG Debts

A BHG loan, like any other unsecured commercial loan, is dischargeable in a personal bankruptcy. Whether bankruptcy is the right answer depends on the borrower's overall financial situation, not just the BHG debt. Chapter 7 bankruptcy can discharge the personal guaranty obligation; Chapter 11 or Chapter 13 can restructure the debt over time. We work with bankruptcy counsel when bankruptcy is on the table, and we coordinate the strategy so that defending the BHG case dovetails with any bankruptcy planning.

Service of Process Issues

BHG cases sometimes proceed by default because the borrower never received the lawsuit papers. Process servers sometimes serve the wrong address, leave papers with people who are not authorized to accept service, or simply fail to deliver. If a default judgment has been entered, the borrower may be able to move under CPLR 5015 to vacate the judgment for improper service or for excusable default. The window to act is limited, however, so timing matters.

Wage Garnishment and Bank Levies

Once BHG obtains a judgment, it can enforce by garnishing wages (subject to New York's limits and exemption rules), levying on bank accounts, restraining assets, and recording the judgment as a lien against any real property the debtor owns in New York. We help judgment debtors assert exemptions, contest improper restraints, and negotiate post-judgment installment payments that allow the borrower to function while resolving the debt.

What to Do If You Have Been Sued

• Do not ignore the lawsuit. A default judgment is far harder to undo than to prevent.
• Save all communications from BHG, including emails, letters, and voicemails.
• Gather your loan documents, payment history, and any correspondence with BHG.
• Do not sign any new documents BHG sends you without having a lawyer review them.
• Call a lawyer well before the answer deadline. The first move shapes the rest of the case.

Statute of Limitations

Most contract claims in New York carry a six-year statute of limitations under CPLR 213. If BHG sued more than six years after the alleged default, the statute may be a complete defense. The statute can be reset by certain partial payments or written acknowledgments, so the analysis is not always straightforward. We review the case file carefully to identify any timing-based defenses.

Defenses Worth Examining

Beyond the statute of limitations, several other defenses may apply depending on the facts. Lack of standing arises when the loan has been transferred or sold and the plaintiff cannot trace its right to enforce the loan back to the original lender. Improper service can void a judgment that has already been entered. Disputes about the amount owed often arise when BHG's records do not match the borrower's records of payments made or fees charged. Usury arguments are difficult against commercial loans but can apply in some circumstances. Unconscionability can be argued where the loan terms were extreme and the borrower lacked meaningful choice. Discharge in bankruptcy bars collection on a previously discharged debt. We evaluate every available defense and incorporate them into the answer and the settlement strategy.

Confidentiality

Most settlements with BHG are confidential. The settlement agreement typically includes a non-disparagement clause and a confidentiality clause. This means clients are protected from public disclosure of the settlement amount, but it also means most negotiated outcomes are not visible in public court records. The absence of obvious settlement precedent in public records does not mean settlements are not happening. They are happening every day.

Costs of Defense

We typically handle BHG cases on a fixed-fee or hybrid fee basis, depending on the size of the case and the complexity of the defenses. Knowing what the defense will cost up front makes it easier to evaluate the trade-off between settlement and litigation. We discuss fees at the initial consultation and put the fee structure in writing before we begin work.

Arbitration Versus Court

BHG loan documents typically allow BHG to demand arbitration through one of the major commercial arbitration providers. Arbitration has different procedural rules than court, often a faster timeline, and limited rights of appeal. Whether arbitration is good or bad for the borrower depends on the facts; we evaluate this strategic choice case by case.

Call Our Office

If Bankers Healthcare Group has filed a lawsuit against you or a loved one, there is no need to fear. You can seek representation from an attorney who can assist you in negotiating with the financial institution. Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].