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If he sells the business to a family member can the hospital still seize the business as part of the collection process or sue the family member who bought it? Im guessing no
You are correct. As long as he sells for what looks like fair market value, or close to it, and it doesn't look like a sham sale to avoid creditors, then no, the creditors wouldn't have any legal grounds to try and unravel the sale. They could try to come after any money that he received from the sale, but that is between him and his creditors.