Worst Fear Realized
I’ve never been an alarmist. Maybe it’s the Californian in me. I have never been one to feel any level of anxiety or stress. I’ve just always thought that everything would work out, until it didn’t. I’ll give you the back story for context. I’ve mentioned before that I naively ran back to Arizona as quickly as I could after dental school. I paid absolutely no attention to the dental landscape there. I wanted to live there and I was going to succeed. I was so confident that everything was going to work out that I was ready to buy a practice right out of school. I started looking for practices for sale in the Phoenix area shortly after the Christmas break of my 4th year of dental school. All the practices I was looking at were listed with brokers. After sifting through the available options, I zeroed in on a practice in Chandler, AZ. The owner was still relatively young, probably late 50’s, but he didn’t want the stress and headache of owning practice anymore and he was wanting to retire. I went and looked at the office and then went out to dinner with the owner and his wife. I felt like things went well and I fully anticipated that I was going to purchase his practice. The day of signing came and he decided that he didn’t want to retire and called the deal off.
I was left to scramble. I had already purchased a home, using the purchase of the practice as my source of income. I found myself with no income. This would prove to be a running theme for the first decade of my career, but that’s a story for another post. The broker who brokered the practice deal was able to find me an associate position with a father and son team in Mesa. The son had graduated a year or two before me so we were roughly the same age. His dad owned a second practice roughly 30 minutes from the Mesa office. He was splitting time between his two offices and the son was practicing full time in the Mesa office. They had an associate who wasn’t working out and I took over for him. It was a good place to work. The son and I got along very well. They were good dentists. The dad to this day is one of, in not the best, clinicians that I have ever met. After working with them for three years I had “triggered” my ability to buy in to the practice. The problem was that there wasn’t any profit to share in the practice. Their overhead was so high. If I had chosen to buy in then I would have been $500k more in debt, I would make less money than I was making as an associate because I would have a practice payment to pay, and I would have more responsibility in the practice. I got the feeling that they didn’t really want me to buy in. In the time that I had been working there the dad had another son getting ready to graduate from dental school and he had another son that was getting ready to start dental school. It seemed like they were trying to form a family dental empire and I wasn’t part of their future. I decided it was time for us to part ways and I would start to look for something else.
At this time I was more than ready to buy a practice. I had been ready 3 years prior and got the rug pulled out from under me. I was introduced to a dentist in another part of town who was looking to take on a partner. He had a concrete side business that he was using to keep his dad employed. He was looking for some capital to infuse into his concrete business and so he decided to sell half his practice. We were going to be partners. I would buy in, work three days a week, and we would both draw a salary and split any profits. This sounded like a pretty sweet deal to me. So sweet in fact that I decided that I would have time to open a scratch practice with my other 2 days a week, so I started working on that. I started working in the partner practice as an associate while we were hammering out all the partnership details. The scratch practice financing moved pretty quickly. Lending institutions played pretty loose and fast with their threshold for lending in those days. Then, once again, right after I closed on the scratch practice, the would-be partner came to me and called off the deal. Apparently his concrete business was going under and he was forced to use his practice as collateral to secure a loan to keep that business afloat. That also meant that no one else could have any ownership in the practice. To this day I don’t believe that story. I think the seller, not unlike the first seller I dealt with out of school, got cold feet and didn’t want to give up any control of his practice.
I then found myself as the owner of a scratch practice with no patients, and once again, no income. I looked far and wide for work. I contacted every broker in the area. I called every corporate outfit I could find in town. No one would call me back. There were so many dentists in the Phoenix area at the time that no body was looking for an associate. I was trying to piece together a schedule that would allow me to provide for my family, all while working one day a week in a practice that had no patients. Everywhere I turned was another door slammed in my face. I did everything I could think of and nothing worked. After wrestling with a decision that I didn’t want to make, I threw in the towel. I declared bankruptcy.
Never in my wildest nightmares did I ever think that I was going to have to declare bankruptcy, especially being out of school for just over 3 years. It never even crossed my mind that I could possibly fail so epically. And by the way, I actually declared bankruptcy, not like Michael Scott where I just screamed it into the air. Let me just explain some of the heartaches that came from me declaring bankruptcy. My credit score went into the toilet. Once the dust settled I was somewhere in the low 500s. I knew I wasn’t going to get financing for anything, for a while. Any of the institutions that were named in my bankruptcy I came to find out later, would never consider lending to me again, regardless of how much time had passed since the bankruptcy was discharged. One “funny” story that was a fall out of the bankruptcy happened after we left Arizona. We coupled our financial failure in Arizona with a move to a new state. Clean slate. We moved to Fort Worth, TX where I started working for a corporate group based in Oklahoma City. They were going to purchase 3 offices in Texas and I was going to start working in one of those locations after it was opened. That also blew up in my face, but that’s a story for another time.
We had moved to Texas in May. We were still working through our bankruptcy situation with a lawyer when Christmas time rolled around. It was December 23rd. I had the day off. We were planning on driving to a mall on the Dallas side of the metroplex because they had an American Girl store there. My wife had promised my two older daughters that they could get American Girl Dolls for Christmas that year. At the time we had a minivan, which we parked in the garage, and I had a Nissan Titan truck that we parked on the side of the driveway in order to make room for the van to pull in and out of the garage. This particular morning we pulled our of the garage with everyone loaded up. My wife always forced me to stop in the driveway to make sure that the garage door closed all the way before we could leave. As I was sitting in the driveway I turned to my left only to find an empty driveway space where my truck should have been parked. “Did you lend the truck out to someone?” I asked my wife. “No, why?” Came her response. “Because it’s gone.” I replied. We were convinced someone had stolen our truck. We immediately called the police. After providing the dispatch woman with some information she kindly informed us that our truck had not been stolen, it had been repossessed. When my wife incredulously asked why it would have been repossessed, the dispatch lady asked if we had been making our payments, which we had. Before we declared bankruptcy our lawyer asked what assets we would like to retain, one of which was our truck. We didn’t own it outright but we were more than happy to keep making the payments so that we could keep it, which we had been doing.
After getting off the phone with the police my wife then called the credit union which had given us the loan to buy our truck. Our attorney didn’t file the correct paperwork to notify the credit union that we would be keeping the truck. Even though had been making the payments, when they saw it mistakenly included in the bankruptcy, they repossessed it. Our only recourse for keeping it was to pay it off. By the time we paid the impound and towing fees and paying off the remaining balance of the loan, we completely wiped out our savings. All of this happened while we were driving to an expensive store to buy dolls for our girls for Christmas with money we now didn’t have.
Bankruptcy follows you around like bad tweet that resurfaces every couple of years. Even after the 10 year financial prison sentence is over, there are still lenders to this day that find out that I had a bankruptcy and won’t lend to me. The reason I tell you this story is as a cautionary tale. It matters where you practice. The dental climate in that area matters. You have to find an area where the competition is low and the cost of living is manageable. I did neither and I continue to pay the price for those bad decisions over a decade later.