Bankruptcy can offer an opportunity to start over and stand tall without the burden of crushing debt. Bankruptcy can also be crippling to those in certain professions. It’s important to understand the consequences while choices can still be made.
Don’t Allow Creditors to Force Bankruptcy
The best bankruptcy advice that can be given is to take action before creditors force bankruptcy. Creditors who are owed more than $5,000 have the option of forcing someone to become bankrupt. The court must make a judgment regarding the debt and formally request that the debtor repay the debt within a specified time period. If the debt is not repaid, then the court can declare the person bankrupt.
After the declaration of bankruptcy, a sequestration order will be issued. A trustee will take control of the divisible property and begin to manage the financial affairs of the now bankrupt person. High fees will be charged for doing so.
Bankruptcy can Put You Out of Your Job
So what is bankruptcy and how can it affect employment? Bankruptcy will cancel most debts, but can also cancel the license needed for employment. For people in some professions, anyone offering Bankruptcy Advice would say to avoid filing for bankruptcy if at all possible. The situation regarding professional licenses can be confusing.
Bankrupts holding the following licenses must cancel them:
- Building licenses;
- Liquor licenses;
- Licenses for financial brokerage;
- Licenses for property management.
With certain restrictions, a bankrupt may continue to work if they hold these licenses:
- Contracting licenses;
- Certificates for legal practitioners.
Licensed Builders Must Cancel their License and Stop Work Immediately
Clients must be notified that the builder’s license has been canceled and all payments for uncompleted work must be returned. The client must also be advised to contact the home warranty insurer regarding the insurance certificate previously given to them. Failure to turn in the license card will result in a fine of up to $2,200.
Plumbers, Electricians, and Other Contractor License Holders may be able to Work with Restrictions
The Department of Fair Trading must be immediately notified of the bankruptcy. After reviewing information on the circumstances, they may cancel the license or allow the holder to continue to work with restrictions. A restricted license would allow the holder to only work on contracts of less than $20,000.
Operators or Directors of a Business
The Australian Securities and Investments Commission must be notified concerning insolvency or bankruptcy. The bankrupt may or may not be able to continue operating the business, depending on the type of business, license restrictions, and reporting obligations. Directors will no longer be able to hold that position.
Real Estate, Financial Services and Legal Practitioner Licenses may be Canceled
The relevant licensing authorities must be contacted. They will decide whether or not to cancel the license.
As you can see, filing bankruptcy can have a devastating effect on one’s employment. Consult an experienced debt counselor to learn about other options. Even if a debt consolidation loan has been refused, there may still be alternatives to bankruptcy.