Bankruptcy Impact On Agent!

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PostPosted: Sun Jun 14, 2009 7:01 pm   Post subject: Bankruptcy Impact On Agent!  

One of my agents came to me very upset the other day and said that he was being forced into bankruptcy. Although I didn't want to pry too much, I did need to understand why and I must say that it legitimately is out of his control. He is going through a divorce and his wife has filed for bankruptcy. Being that most of their debts are joint, his only other option is to take all the debt upon himself which would be financial suicide.



That being said, he is concerned about losing his license. I explained that you cannot be discriminated against for declaring bankruptcy. He was then worried about losing all of his contracts and that his appointments would all terminate him! I honestly can say that I have no idea whether this could happen to him or not!



I realize that it is very hard for someone with horrendous credit to obtain appointments with reputable companies, but at the same time...he has already shown that he is a good producer and has had an impeccable record! With the economic problems people are having, do you think the companies are going to be a little more lax on their requirements? Do you think he has anything to worry about?

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PostPosted: Mon Jun 15, 2009 3:23 am   Post subject:   

I have seen it make it hard to get new appointments but never lose existing ones. Seen similar things happen (too many times)

I feel for him...hope he keeps his chin up.

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PostPosted: Mon Jun 15, 2009 4:54 am   Post subject:   

I'm not worried about him getting new appointments...he has some pretty decent ones and I told him he definitely doesn't have anything to worry about on our end!



I did speak with one of the life insurance companies we work with, and they said they would not terminate his contract...but they would stop paying him on a 9 month advance and would pay as earned instead. While this is a minor blow to him, it still is much better than the alternative!

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PostPosted: Mon Jun 15, 2009 6:44 am   Post subject:   

Whoa!! Does that mean that he wouldn't lose his license and can continue working on his existing contracts?



Quote:
but they would stop paying him on a 9 month advance and would pay as earned instead.




No doubt it would definitely affect his income but still better than losing everything that he has earned over the years. One should be penalise for their partner's mistakes. But I was wondering what would have happened if he instead had filed the BK?
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PostPosted: Mon Jun 22, 2009 2:45 am   Post subject:   

Although he is not the one who initially filed bankruptcy, he did eventually agree to be included in it (as most of the debts were joint). His income will definitely change (especially because of the changes in the payment of advance commissions), but he will be able to continue on his contracts with no negative impact to his insurance license.



In addition, the existing contracts can chose to terminate the agreement at any time...but will probably not do so in his case because of his production levels. The Department of Insurance says that he CANNOT be discriminated against and a bankruptcy is NOT sufficient reason to have a license revoked (in most cases). They did say that if it was an insurance agency that went belly up, or if the financial difficulty was due to fraud / theft...both of those cases would have to be handled a little differently.



Interestingly enough, he received a registered letter stating that his Series 6 was being revoked due to "poor financial credibility"

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PostPosted: Mon Jun 22, 2009 8:40 am   Post subject:   

Quote:
Interestingly enough, he received a registered letter stating that his Series 6 was being revoked due to "poor financial credibility"




Can he contest this decision?
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PostPosted: Mon Nov 23, 2009 8:09 pm   Post subject: insurance commisions  

What he may have found out by now,is what i just found out after filing chapter 7.The trustee is taking all my insurance commisions to pay back the debtors.If your an agent you should never file bankruptcy because the wording in the contracts give trustees carte blanche with our future comisions on clients written before bankruptcy!!!


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PostPosted: Sat Dec 05, 2009 3:44 am   Post subject:   

It is really tough for anyone undergoing a financial crisis. What is more interesting in the present case, that the guy in question is an Insurance Agent, with a sole job of selling Insurance Products of some Insurance Company and earning some bucks.



Being bankrupt doesn't mean being dishonest, it is only an economic condition, which always keeps on changing.

Moreover, the employers, those have made good money over the years through the same employee (especially from a marketing guy), if starts changing employment terms for a reason as above it comes to me as a bitter surprise.



Clients, I wish should also realize that it is not an Insurance Agents, but the insurance company which owns the responsibility of paying claims. Agents are more of a an advisor, those introduce a product to them, after analyzing their requirements, and for this job they get rewarded by their employers. Bankruptacy is only about money and not the knowledge which he possess.



Convey my best wishes to your Agent.



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PostPosted: Tue Jan 26, 2010 12:05 am   Post subject: LLC  

I am an agent in FL and have a contract between my LLC and a large broker that places the business. I have had limited success due to the market in the last couple of years and have exhausted my personal assets trying to get the business going and have decided to close the LLC and move on. I have about $16,000 on a credit card that was issued to me and my LLC. If I find that I need to go into personal bankruptcy, will I need to pay off the credit card before I can close out the LLC?


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PostPosted: Tue Jan 26, 2010 5:00 am   Post subject:   

Consult a bankruptcy attorney, but be wary. Why throw in the towel on $16,000 in credit card debt? There are a lot of people out there worse off than this. Why not contact the card companies and try to work something out?

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PostPosted: Tue Mar 09, 2010 10:00 pm   Post subject:   

I am an insurance agent in CO. My husband and I got caught up in a fraudulent real estate deal in FL and now we are in over our heads. I have a pretty successful insurance business, but am concerned about the affects on it if I file for BK. Most of our commissions come through our LLC, but I am the representative agent through whom it gets assigned. I am beside myself with fear and grief on losing my ability to earn a living if we file, but we are suffocating with all of this real estate debt and credit card debt. Any suggestions?


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PostPosted: Wed May 26, 2010 10:22 pm   Post subject: bankruptcy  

I may have to file bankruptcy : ( we have been struggling for so long and we have no choice with cc charging us 27 + interest and having to choose between groceries and bills so we may have to file I have a good job with my insurance license but if we file will I lose those??? HELP


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PostPosted: Sun Jun 20, 2010 1:45 pm   Post subject: filing bankruptcy  

i just file friday a 13 my lawyer never mentioned anything about losing commissions. he gave me a payment plan and i await a court date. after leaving allstate and going independent i needed a fresh start


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PostPosted: Thu Dec 01, 2011 3:09 am   Post subject: Bankruptcy prior to getting license  

I've been wanting to get my Insurance license for a while. I've been going through the process of preparing for taking the test in the state of Florida(Life, Health, and Annuities). Unfortunately, I am having to declare bankruptcy due to excessive credit card debt totalling $35,000. Right now, I am a freelance Videographer, operating as an LLC. Is it still possible to get my insurance license?


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Chris Raincloud
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PostPosted: Fri Dec 02, 2011 3:50 am   Post subject: chapter 7  

I Own a branch of Insurance and was forced to file chapter 7 just about 2 years ago ( an old business endeavor caught up to me). I was two years into my NEW agency when i filed and the trustee decided to NOT go after my commissions.. He even said it is very very rare that a trustee will go after your commissions if at all. A BK is supposed to help you, not hurt your future earning power..

My lawyer told me not to sweat it and he was right, but it is nerve racking going through the whole process. I've never been so nervous in my life


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