What Happens To My Professional Designation If I File Bankruptcy or Consumer Proposal?
Professional Designations & Insolvency
Credit exists because our financial system needs it.
Taking on debt isn’t in itself a bad thing – or even a mistake.
The trouble with credit starts when we let things get out of control.
That can sometimes happen just because we lead busy lives, debt is easy to obtain, and we lose track of our commitments.
Other times, problems with credit can crop up because our situation changes – and many aspects of our lives and fortunes will never be entirely under our full control.
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Debt happens for all sorts of reasons, to every type of person.
Income, career, and all of the things that make us individuals don’t prevent us from having issues financially.
It’s undoubtedly a fact, however, that your job might raise questions in terms of how you deal with your debt.
If you work in one of several sectors, you’re probably wondering, what happens to my professional designation if I file bankruptcy or consumer proposal?
It’s wise to figure out how bankruptcy affects your professional designation before you act
It’s wise to stop and think about how either option may affect our life, and it’s always a great idea to get the best advice available before proceeding.
Licensed insolvency trustees are the only professionals authorized to file a consumer proposal or for bankruptcy on your behalf.
In this article, we’re going to take a brief look at how both solutions can impact different types of professional licenses.
Still, we can’t stress enough how important it is to discuss your specific circumstances with a trustee.
There is a vast network of trustees in Canada, and we can put you in touch with one local to you.
A consultation is usually free, and all advice is unbiased.
You’re not alone in experiencing debt problems – and help is available
While bankruptcy and financial problems can cause real issues for some professions, anyone can find themselves in an unmanageable debt situation.
It’s essential to remember you aren’t the first accountant, real estate agent, or even lawyer to experience problems with money.
Getting assistance is the best way forward when you’re in debt – and the reality of your problems usually won’t be as bad as you think once you’ve talked to a professional.
Here’s the lowdown on what you need to know about professional licensing and debt solutions before you sit down with an insolvency trustee.
Rules can differ from province to province – so, treat this as a guide to develop an understanding before you get help.
We’re going to look at a range of occupations and concentrate on Ontario.
Your local trustee will be able to provide you with comprehensive advice for your specific location – or you can give one of our friendly team members a call on (877) 879-4770 (24/7) if you’re worried about something in particular.
Bankruptcy and Consumer Proposal if you have a CPA Designation
When you’re a chartered professional accountant in Ontario, bankruptcy and consumer proposals will require you to do certain things in order to satisfy the terms of professional membership.
Namely, you’ll need to inform the Office of the Registrar at the CPA.
You won’t necessarily get suspended because of filing for bankruptcy or a consumer proposal – and it’s far more likely you’ll encounter problems if you don’t report the event to the registrar.
You will get a chance to explain the circumstances surrounding your decision to file as insolvent, however.
The registrar will look at each case based on how it arose.
Once your situation has been assessed, the registrar may decide not to act, or they could impose certain restrictions on how you are permitted to practice.
In some cases, members get suspended.
Bankruptcies and Consumer Proposals if you are a Lawyer
Bankruptcy and consumer proposals have different potential impacts on your rights to practise law in Ontario.
If you file for bankruptcy, you’re required to inform the Law Society of Upper Canada right away – and that means without any delay.
Failing to do so will likely have worse consequences than if you do.
You’ll need to keep the society informed about your finances at all times during the process.
You’ll inevitably experience some changes to the way you can work while you’re still bankrupt.
Lawyers in Ontario cannot hold money in trust, for instance.
They also can’t sign or co-sign for a trust account – and won’t be able to practice real estate law.
If any of the above is likely to affect you, it’s crucial to have a plan.
You may even wish to consider filing a consumer proposal instead – if your debt level fits the allowed range.
Consumer proposals have less of an impact on your right to practice law.
While the Law Society of Upper Canada does advise you to notify them of your entering into a consumer proposal – it isn’t compulsory.
As always, the best advice available about either bankruptcy or consumer proposals is from your local licensed insolvency trustee – and it’s wise to hear all the facts before making a decision that could impact your career.
Bankruptcy Impact on Certified Financial Planner Certification
As a certified financial planner (CFP) in Canada, when you file either bankruptcy or a consumer proposal, losing your certification is by no means a certainty.
So it shouldn’t automatically put you off addressing your debts.
You will need to inform the Financial Planning Standards Council no later than 15 days after your filing.
When you need to renew your designation or the first time you apply, you are required to declare any bankruptcy or consumer proposal at that time.
Why and how you got into difficulties will be assessed and a decision made regarding your continued certification based on that.
Bankruptcy, Consumer Proposals, and your Real Estate License
In Ontario, you won’t necessarily end up with a revoked license when you file for either a proposal or bankruptcy.
The Real estate Council of Ontario must be informed – via the registrar’s office – no later than five days after you file, however.
How and why you encountered your financial difficulties will be used to make a decision whether you be allowed to continue working as a real estate agent.
Filing for Bankruptcy as an Insurance Broker in Ontario
You won’t automatically lose your registration if you’re an insurance broker filing a consumer proposal or for bankruptcy in Ontario.
The regulatory body – the Registered Insurance Brokers of Ontario – will review the causes of your bankruptcy or proposal and decide whether your license needs to be affected.
Bankruptcy Impact on Life Insurance Agents License in Ontario
Life insurance agents are required to immediately report a personal bankruptcy filing to the Financial Services Commission of Ontario.
All cases get assessed based on their individual merits.
The Best Policy is to Confirm with your Professional Board and Talk to You Licensed Insolvency Trustee
Often, no matter what our job, we can end up chasing our tails over wrong and conflicting information on the internet.
It’s always best to go down the non-profit route and talk to a local trustee.
Doing so, along with speaking to and being open with the authority for your specific professional body is the best way to make the right decisions for you.
If you’re in any doubt, or even if you’d just like a chat, give us a call on (877) 879-4770 (24/7) today.
We’re always here, and we’re looking to help.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?