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Obtaining a Real-Estate License after Filing for Bankruptcy

Federal Bankruptcy Law (FBL) has a section, 525a that prohibits any government agency from causing a person to be denied a professional job license based solely on having filed for bankruptcy.  Whereas real estate licenses are granted by the sovereign states of the United States, federal bankruptcy law applies to these real estate licenses.  Section 525a rules also hold the same for license renewals.  Bankruptcy itself cannot impact obtaining or renewal of a real estate license when someone applies for a job at a federal agency.  Federal law, however, also prohibits such bias by the real estate companies themselves.  Companies set their own criteria for these types of situations and cannot have that bias in their hiring practices.  Section 525a again rears its powerful influence. There is a law against it.  That being said, many people experienced in this, seeking a job in real estate but also having suffered a bankruptcy, have felt that there was a bias in the real estate agency.  Several experts stated to not hide the fact of a currently filing or previously being in bankruptcy.  It is all about the hiring company wondering about the integrity of this candidate.  Up-front admission removes doubt about integrity later.  If there is a hiring bias, better to know early and go elsewhere if necessary.

To take this a bit further, section 525a prohibits any government agency from causing a person to be denied any professional job license based solely on having filed for bankruptcy.   This includes lawyer, doctor, engineer, any discipline that demands licensing or certification.  It is easy to see that anyone hiring a current or former debtor can concoct a reason for not hiring such a person.  In some states additional laws and rules expand the prohibition to state agencies, and in some cases to vendors and suppliers who work with and or for state agencies.  Federal and state laws view this bias as discriminatory, and have made it illegal to do so.  Proving any wrongdoing, however, can and often is a very difficult thing to accomplish.  Experts and many people list any of a large number of federal and state statutes that prevent bias and or discrimination for any number of situations, attributes, conditions, or themes.  While each hiring company is required to know and follow anti-bias and anti-discrimination laws, it is well known that bias and discrimination still exist.

Several experts and some people who successfully overcame what they thought was a bias said that a candidate in the making needs to practice what he or she might state when writing a cover letter or in an interview.  It is fair to ask the interviewer if a bankruptcy raises a question of integrity in the company.  The answer should come back as no, giving the candidate an opportunity to specify (for no longer that five minutes) why a bankruptcy has no impact on the candidate’s integrity or future financial dealings.



This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

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