Although bankruptcy is a last resort, it can provide relief from creditor calls and letters when you find there is simply no other way to manage your debt. Bankruptcy stays on your credit report for up to 10 years, and can affect your ability to take out a car loan, get a home mortgage and obtain credit cards. If you are a certified public accountant, you may worry that filing bankruptcy may also affect your professional status. However, filing bankruptcy does not affect your CPA license.
CPA licensure is regulated on the state level -- each state imposes requirements on obtaining your CPA license and maintaining good standing as a CPA. Although certain factors, such as fraud, may cause your state to suspend or revoke your CPA license, your personal finances cannot affect your license status. Filing for bankruptcy protection will not cause you to lose your CPA license. Also, your state cannot deny you a CPA license solely because you file bankruptcy.
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Keeping Your Job
If you work for an accounting firm or other employer as a CPA, you may worry that you will lose your job if you file for bankruptcy protection. However, your employer cannot fire you solely on the basis of your bankruptcy filing. It also cannot deny you a promotion or a raise because of bankruptcy. An employer cannot refuse to hire you because of bankruptcy; however, if a prospective employer learns of your bankruptcy, it may simply choose another reason for selecting another candidate, such as experience or work history, to avoid violating anti-discrimination laws.
Although you cannot legally lose your CPA license or your job because of a bankruptcy filing, your bankruptcy is considered public record. This means that a current or prospective client may view your bankruptcy filing at any time. No provision or law prevents a client from refusing to hire or continue working with you based on your bankruptcy filing.
In some cases, bankruptcy may have beneficial effects on your performance as a CPA. After you have filed for bankruptcy, your creditors will stop calling and sending you letters, which can help reduce your stress level. If you file for Chapter 7 protection, you will no longer be responsible for most debts after your bankruptcy discharge. Under Chapter 13, you will enter into a payment arrangement that allows you to contribute a manageable amount to your debt. In either case, having renewed control over your finances can help you sleep better, and can eliminate lack of focus caused by constant financial worries. This may help you focus on your CPA duties so you can provide better service to your employer or clients.