Will I lose my License If I file Bankruptcy?


Will I lose my License If I file Bankruptcy?
The Certified Financial Planner (CFP) Board of Standards announced that, effective September 1, 2012, it will shorten the “experience” requirement. It will also make personal bankruptcy information public.

Specifically, the Board will reduce the length of time needed to become certified with two years of experience, instead of the traditional three. At the same time, it will make personal information public, related to their filing bankruptcy.

That last part is disconcerting at first blush. But remember this: When a person files bankruptcy, it is a public record anyway. The difference is, not many people know where or how to look up that information. As of September, people looking to hire a CFP will have it readily available on a central directory/website.

This is not new or unique. Many governmental licensing agencies already ask for and make bankruptcy information available. For example, the Arizona Registrar of Contractors (ROC) requires a company or an individual to disclose previous bankruptcy filings, and it is on the ROC website. But that does not keep a person from obtaining a contractor’s license. It’s a simple matter of disclosure.

The bottom line: In 25 years and thousands of filings, I have never seen a situation where someone loses a license or a job because of a bankruptcy. Indeed, it is illegal for an employer to fire someone because of a bankruptcy filing. A person who is or wants to be a CFP will be able to do so after receiving a bankruptcy discharge of debt, which provides peace of mind.



Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Clint W. Smith, P.C. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »


Reporters on Deadline

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.