State license while in a chap 13

[karm43]

Does anyone have a state license in a chap 13 and owe student loans? Was wondering what happens been reading that they may not renew my license if I do not pay my student loans. Anybody run into this? Looking ahead for answers just in case.

[KeithDoxen]

What sort of license are you talking about?

[karm43]

A professional license like cometoligist nurse doctor dental hyginest

[Flamingo]

Chapter 13 and 7 can have an effect on the renewal of government clearances, etc. Uncertain about state licensing for certain professions - pull out your student loan paperwork which you signed when you took the loan and your paperwork for your licensing in your state and review for any clauses as to filing BK or non-payment of student loans. A review of your State Code for professional licensing might provide some answers for you also and you can always consult with an attorney in your state to be on the safe side.

[8forme]

I am a nurse and owe a small amount in student loans, less than 5K. They have been in forbearance for over 3 years now. We filed CH13 last Sept and it did not affect my licensure. In fact, that was our year to renew and it all went smoothly. We have to renew every 2 years. We filed in Sept and I renewed my license in Nov with no issues. The only reason I wouldn't be renewed is if I did not complete my continuing education hours or had some disciplinary actions, then the Board of Nursing decides to renew me, suspend me, or revoke me, not the state.

[HHM]

For most things, licenses, etc, the BK will have no affect. What is worse, really, owing a bunch of debt you can't pay and going into default, or filing BK to "solve" the debt problem and no owing anyone any money...who is really worse from an employers perspective.

[karm43]

Right I filed just making sure cannot put my license in jeaperdy I am the bread winner. 8forme answered my question exactly. How does the interest work when the chap 13 over?

[mountanddo]

For most things, licenses, etc, the BK will have no affect. What is worse, really, owing a bunch of debt you can't pay and going into default, or filing BK to "solve" the debt problem and no owing anyone any money...who is really worse from an employers perspective.

I'm not sure I am reading this correctly. Are you saying that employers look at people in chapter 13's and chapter 7's differently. It sounds like from an employers perspective a chapter 7 is worse?

[HHM]

No, this is relative to doing nothing vs. filing BK

Do nothing - too much debt, not enough income and go into default
File BK - solve the problem and now owe nothing.

Based on the circumstances, filing BK puts the person in the strongest possible position relative to employment.

[justbroke]

What HHM writes is certainly an arguable position for an employer looking at your BK. You don't owe anything. You are less likely to take a bribe... like the person who is chock-full of debt and looking for "extra" income. I received a clearance with a law enforcement agency and a federal agency after having disclosed my bankruptcy! I'm less likely to take a bribe since I only owe about $22K total.

[Flamingo]

What HHM writes is certainly an arguable position for an employer looking at your BK. You don't owe anything. You are less likely to take a bribe... like the person who is chock-full of debt and looking for "extra" income. I received a clearance with a law enforcement agency and a federal agency after having disclosed my bankruptcy! I'm less likely to take a bribe since I only owe about $22K total.

They would not renew my hubby's federal/government clearance after we filed our Chapter 13....Specific reason cited was the bankruptcy.

[8forme]

They would not renew my hubby's federal/government clearance after we filed our Chapter 13....Specific reason cited was the bankruptcy.

My hubby has to have a security clearance for his job. He was very proactive with his FSO when we filed CH13 last Sept. The FBI did a re-investigation, about 6 hours worth, and asked tons of questions about what led to our BK. They also went over all our BK papers, every line on his credit report and wanted more personal references but that was all that was said. I think it helped that he has a very good relationship with the CEO of his company (hubby is one of the executives) and also some of the top people in a certain govt agency and several said they could be his "sponsor", I am not sure that is the correct word. His clearance also goes back over 17 years so it was not a newer one. Also, most of our debt was from serious water damage, drainage issues at our house and the damage to the house structure and foundation that had to be repaired that was not covered by insurance. Then that started a rob peter to pay paul kind of thing. We finally said enough was enough and filed.

Our attorney's office has an attorney that used to be JAG and he will represent any of their clients if a revocation happens, he specializes in security clearances. This is one of the reasons we picked our particular attorney's office. He said it is not too common for it to happen nowadays, but it certainly did happen more a few years ago.

[justbroke]

They would not renew my hubby's federal/government clearance after we filed our Chapter 13....Specific reason cited was the bankruptcy.

I'm hoping that doesn't happen to me, but my (first) clearance dates back in the 1980s. I don't know if that was a factor.

You're right. We just never know what can happen and whether any investigative agency will find a bankruptcy to be enough evidence to deny a security clearance.

[KeithDoxen]

Neither my Ch 7 nor my default on my private student loans, which are still "in collection" according to my credit report, has impacted my standing with my State Bar. I got my law license back when I still had decent credit and nothing has happened to threaten my license due to the credit issues. I would however have difficulty obtaining a new law license in a different state, depending on the state. I know some states now include with their bar application a line-by-line list of all debts that you owe, and ask you to include whether the debt is in good standing, date of last payment, etc. So the issue of bad debt is becoming a "character and fitness" issue for some state licenses.

[HHM]

They would not renew my hubby's federal/government clearance after we filed our Chapter 13....Specific reason cited was the bankruptcy.

They may have given that as the "Reason" but it is highly unlikely it was the "sole" reason. Bankruptcy is a "factor" but it is rarely the "deciding" factor. In any event, the thing is, when a person is facing BK, it is not as if they have a "real" choice. If you have too much and can't pay it, at some point, you will need to do something. So, the perceived "employment stigma" of bankruptcy is a red herring because there isn't really an alternative to not filing.