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 Posted: Sun Jun 14, 2009 7:01 pm Post subject: Bankruptcy Impact On Agent! |
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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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ChrisBantly
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| Posted: Mon Jun 15, 2009 3:23 am Post subject: |
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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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beatuplunchbox
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| Posted: Mon Jun 15, 2009 4:54 am Post subject: |
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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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ChrisBantly
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| Posted: Mon Jun 15, 2009 6:44 am Post subject: |
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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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jeorge
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| Posted: Mon Jun 22, 2009 2:45 am Post subject: |
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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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ChrisBantly
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| Posted: Mon Jun 22, 2009 8:40 am Post subject: |
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| 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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jeorge
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