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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39139
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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does filing a chapter 7 bankruptcy for both individual debt

Customer Question

does filing a chapter 7 bankruptcy for both individual debt and business debt effect my contractor's license
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 8 years ago.

It doesn't directly affect your license, because your license cannot be revoked as a means of forcing you to pay a discharged debt to a customer.


However, if the contractors board has fined you with civil penalties, they are not discharged in bankruptcy and must be paid in full prior to reissuing your license.


Your bond, if provided by a surety, is not a debt, so it's not discharged, and it cannot be assumed by the bankruptcy trustee -- so it has no value to the bankruptcy estate. But, if your bond is some sort of cash equivalent provided by you, like a CD, then that becomes the property of the bankruptcy estate and the trustee can use it to satisfy your creditors -- which means that you will have to find a means of restoring your bond before your license can be reissued.


Hope this helps.


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