Is your long-term livelihood at risk?
Going bankrupt holds certain expectations for your life, at least for three years of it, but what about your long-term livelihood?
Generally, the Bankruptcy Act does not impose restrictions or conditions on employment in any profession. However, state and national associations, and governing bodies may have certain restrictions that apply to bankruptcy, personal insolvency agreements and debt agreements.
As a basic rule of thumb, trades like plumbers, builders, and second-hand dealers are subject to eligibility rules, which state governments administer. While professions such as accountants, lawyers, barristers and the like, are governed by national or state based associations. As with most discretionary matters, there are the hard rules and then there are the practicalities. Laws that govern the trades may say that if its members become bankrupt, or enter into a formal debt arrangement they might find themselves without a licence. It may be that the decision makers for any trade or ‘licence class’ don’t view insolvency as a concern as their members don’t hold or manage money in their job and therefore allow the member to retain their licence. However, real estate agents, auctioneers etc who manage a trust account—insolvency would be a serious concern and it is normally the case that such a licence would be cancelled.
Often legislation is ambiguous or silent as to whether you must report your insolvency once you are already licensed—i.e. they only say it’s an impacting or disqualifying factor for new licences. Either way, insolvency law serves to protect the general public/consumer. But it is wholly dependent on the licence holder’s honesty and the effectiveness of the licensing body in its approach to personal insolvency. The building industry bodies all have stringent screening processes in place, including licence renewals, but the same cannot be said for many other licence types.
Click here for our licensing and associations schedule.