It’s not uncommon for someone holding a professional designation to face personal debt problems. After all, financial trouble can happen to anyone regardless of career or income. Anyone may be concerned about how bankruptcy affects employment but even more, what is the impact of insolvency on your professional license?
Below we provide information into how bankruptcy can impact designations and licenses for accountants, lawyers, human resources professionals, certified financial planners, real estate agents, insurance brokers and insurance agents, and medical doctors. In all cases, the key is to be honest with your licensing body or board about your filing.
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Bankruptcy Impact on CPA Designation in Ontario
Filing a personal bankruptcy or consumer proposal as a chartered professional accountant (CPA) in Ontario does not mean you will necessary be suspended from membership. You are required to report your bankruptcy to the Office of the Registrar at CPA Ontario. Every case is reviewed on its merits. The Registrar will consider the reasons why you filed insolvency and will then decide whether to do nothing, impose restrictions, remedial activities, or suspend.
Bankruptcy Impact on Lawyer License in Ontario
As a practicing lawyer in Ontario filing for bankruptcy, you will need to report your filing immediately to the Law Society of Upper Canada (LSUC). A lawyer filing for bankruptcy will face certain restrictions in their ability to practice. While bankrupt, a lawyer may not receive or hold money in trust; have signing authority or co-signing authority on any trust account; or practice real estate law. You will also need to report on your financial situation to LSUC during your filing.
There are less restrictions if you are filing a consumer proposal, however, LSUC does encourage you to report a consumer proposal in any case. Find out more about what happens when a lawyer files for personal bankruptcy in Ontario.
Bankruptcy Impact on a Human Resources Professional
As a CHRP, CHRL, or CHRE designate filing for bankruptcy or a consumer proposal, you must notify the Office of the Registrar of the Human Resources Professionals Association (HRPA) immediately of your filing. This requirement applies to both new and existing members.
A bankruptcy or proposal filing does not necessarily mean you will have your membership revoked or suspended. The Review committee will consider your cause of bankruptcy and your conduct as a Member. They will also consider whether your bankruptcy puts any client, employer, or any other parties’ interests at risk as a result of your filing. After carefully reviewing your case, the committee can decide whether to take further action.
Read our specific article for more about the potential impact of a bankruptcy or proposal on human resource professionals.
Bankruptcy Impact on Certified Financial Planner Certification
A certified financial planner (CFP) in Canada filing bankruptcy or a consumer proposal does not necessarily mean you will lose your certification with the Financial Planning Standards Council (FPSC). You are required to notify the FPSC within 15 days of your filing.
If you’re a new applicant or a CFP applying for renewal, you will need to declare your bankruptcy or proposal when you fill out the Declarations and Professional Obligations section of the renewal form. The FPSC will consider your reason for filing and situation and decide whether to deny a new or continued certification.
For more information, read our post about what happens when a certified financial planner files for bankruptcy.
Bankruptcy Impact on Real Estate License in Ontario
Filing a personal bankruptcy or consumer proposal in Ontario as a real estate agent does not necessarily mean your registration with the Real Estate Council of Ontario (RECO) will be revoked. You must inform the Registrar’s office within five days of your filing. RECO will consider, in detail, your overall financial picture and reason for filing in order to determine whether you can perform successfully as a real estate agent.
Learn more about the process for a real estate agent filing for bankruptcy.
Filing for Bankruptcy as a Medical Doctor in Ontario
Filing for bankruptcy as a medical doctor in Ontario will have no impact on your ability to practice medicine. However, given your high monthly income, a consumer proposal is a more sensible option to eliminate your debt obligation than to file for bankruptcy. Surplus income rules make bankruptcy a costly option for medical professionals.
As an alternative, a consumer proposal allows for lower monthly payments and ensures you keep any assets you own.
For more information on why a consumer proposal is a better option for doctors, see our article on filing bankruptcy and doctors.
Filing for Bankruptcy as an Insurance Broker in Ontario
Filing a personal bankruptcy or consumer proposal as an insolvent insurance broker in Ontario will not necessarily have a negative impact on your registration with the Registered Insurance Brokers of Ontario (RIBO). The Qualification and Registration Committee at RIBO will review your file and determine whether your insolvency filing will impact your licensing.
For more details, read our post about what happens if an insurance broker files a bankruptcy or consumer proposal.
Bankruptcy Impact on Insurance Agent License in Ontario
Filing for personal bankruptcy as a life insurance agent in Ontario does not necessarily mean your license with the Financial Services Commission of Ontario (FSCO) will be terminated, nor does it mean you cannot become a life insurance agent. A life insurance agent is required to report a personal bankruptcy filing to the FSCO immediately. The FSCO reviews bankruptcy filings on a case-by-case basis and will decide on the future of your licensing based on your reason for filing, your creditors, and your financial situation.
Learn more about what happens if you file bankruptcy as an insurance agent in Ontario.
Always confirm with your professional board or body
If you are considering filing bankruptcy or making a proposal to creditors, it is always prudent to check with your professional designation licensing board or governing body to determine the potential implications before filing. Talk with a Licensed Insolvency Trustee to see which option, a consumer proposal or bankruptcy, might make sense in your specific situation.
- Will I Lose My Insurance Agent License if I File Bankruptcy in Ontario?
- Can I Still Be a Mortgage Broker or a Mortgage Agent if I File for Bankruptcy in Ontario?
- Will I Lose My Real Estate License if I File a Bankruptcy or Consumer Proposal in Ontario?
- Filing Bankruptcy or Consumer Proposal as an Insurance Broker in Ontario
- Filing Bankruptcy or Consumer Proposal as a Lawyer in Ontario