How Will Bankruptcy Affect My Professional Licenses?

Bankruptcy Attorney

Ohio bankruptcy attorneys often deal with individuals in debt who are considering bankruptcy but also afraid that they will lose their professional licenses. Contractors, massage therapists, nurses, counselors, insurance agents, doctors, and realtors are among some of the individuals who need to keep their professional license to remain in business and continue to earn income. Financial problems can certainly affect your ability to hold a professional license, but let’s take a closer look at how they are affected in bankruptcy.

Bankruptcy and YourProfessional License

The US Bankruptcy Code specifically states that the government can’t suspend or refuse a new license because you declared bankruptcy. Additionally, your current employer can’t fire you based solely on your filing for bankruptcy. The governing body that controls your professional licenses, can, however, scrutinize your bankruptcy case in order to determine if you mismanaged a client’s finances. As long as you haven’t misappropriated or mismanaged any funds relating to your profession, your professional license is safe during bankruptcy.

Tools of the Trade

For those individuals who count on specific tools to conduct their normal business, there are also bankruptcy exemptions that you can use to protect them from being added to your bankruptcy estate. This is especially important to individuals who are professional contractors who rely on tools that they own to continue earning money during and after bankruptcy. For those of you worry about losing your general tools or business vehicles, make sure to contact a bankruptcy attorney to find out the dollar amount of tools of trade exemptions in your state,

Debt that Can Affect your Professional License

While bankruptcy won’t affect your professional license, there are a few types of debts that will put your license in jeopardy. In as many as 19 states, the government can suspend your state-issued license if you fall behind on your student debts. Additionally, all 50 states allow the state to revoke, restrict, or suspend your professional license for falling behind on child support or spousal support payments.

Protect Your Right to Earn from Debt

Student debt and family support payments are by far the most debilitating forms of debt as bankruptcy can’t eliminate this money. Because you must pay this money back and it can threaten your license, you should contact a bankruptcy attorney to find out how discharging other types of debts such as medical debt or credit card debt can free up some much-needed funds to pay off student loans or family support balances. A bankruptcy lawyer will help you keep your license so that you can maintain your way of life and continue to produce an income.

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