Over the past few years I have filed many Chapter 7 bankruptcies for real estate contractors, real estate brokers, and mortgage brokers . A common question pertains to bankruptcy’s effect upon their state – issued contractor’s and brokers license. These people are afraid that because they file bankruptcy the State of California will not renew their professional license, or that the State may refuse to issue a new license they intend to pursue after their bankruptcy.
I have not heard from any of my bankruptcy clients that they have lost or been denied a contractors or brokers license because they filed bankruptcy. There is protection in the Bankruptcy Code. The Code prohibits any governmental unit from denying or revoking a license because of a prior bankruptcy. Therefore, real estate professionals, as well as other professionals such as lawyers or accountants, should not worry about a bankruptcy ruining their professional carrier and their ability to earn a living after a bankruptcy.
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