Indianapolis Bankruptcy Lawyer Follows Financial Planner Debate

April 10, 2012 12:51 am Published by

“It’s got to be one of the most embarrassing things that can happen to a financial planner,” remarked Sheryl Garrett, who helps the Board of Certified Financial Planners hold disciplinary investigations for planners who file personal bankruptcy.

As every one of us lawyers for bankruptcy in Indiana knows, personal bankruptcy is not necessarily – in fact not even most of the time – the result of carelessness about financial matters, and of course, carelessness is even less likely to have been the case with financial planners.

As I’ve been explaining in recent Bankruptcy in Indiana articles, filings of individual bankruptcy are going down.  Still, bankruptcies are up 40% from pre-recession times.  The CFP board reports that 48 of its members filed bankruptcy in 2011, compared with 28 in 2010, and in January, discussions began about a proposal to change the rules for CFP® certificants who file bankruptcy.  Under the old rule, a planner would lose their CFP designation immediately upon reporting they’d filed personal bankruptcy. 

The March issue of Financial Planning, one of the several professional journals I read in order to offer my readers and clients the very latest in Indiana bankruptcy information, reports on the debate going on concerning bankruptcy among financial planners. The proposed change is that, while planners would have to report a bankruptcy filing, there would be no adverse consequences such as being disciplined or losing the CFP® marks because of only one bankruptcy filing.

On a recent visit with the Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices, we spent quite a bit of time discussing the things 250 respondents had to say in a survey of financial planners concerning the proposed rule change. The responses fell into two extremes:
Against the proposal: “If you are a CFP professional, you should never file a bankruptcy.”
For the proposal: “Financial planners should have the same rights as other people who file bankruptcy and get to keep their jobs.

From my point of view as a longtime debt consolidation lawyer and attorney for bankruptcy in Indiana, the most interesting comment by a financial planner was this: “Planners who file for bankruptcy may indeed receive valuable lessons from their insolvency that ultimately they could teach clients.”


 

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This post was written by Mark Zuckerberg

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