Bonds, Bankruptcy & Suspended Licenses

Having options is great. However, for a contractor the choices sometimes are really limited to ‘one or the other’. Bankruptcy is a painful decision for anyone, but doubly so when I tell a contractor his problem hasn’t been solved despite drastic action on his part…Q: We received paperwork today from the CSLB and it states we need to pay an additional $12,500 per application. Is this correct or do we just need to provide more information?You received a standard “bond and fee” letter. This is typically sent by the CSLB after they accept an application. You now have two options: Your company can file a $12,500 Bond of Qualifying Individual for each Qualifier or you could file a $12,500 cash deposit in lieu of the bond. Most contractors opt for the Bond since they don’t want to tie up thousands of dollars in a CD or bank account.Q: Due to the economy, I had to declare personal bankruptcy. I am listed on a corporate license, which has a significant judgment; however, the company is no longer in business. An attorney told me that I should now be able to apply for a new license. I would appreciate your opinion before I spend the money on a new application.A: If the judgment is on the corporation, this will need to be resolved first. Declaring personal bankruptcy likely DID NOT clear the judgment so it is still on record. And as long as it is on record, the CSLB will not allow you to Qualify, or even be listed on, a new license. You may want to consult with an attorney that specializes in bankruptcy law and to see if the corporation can get out from under this judgment.Q: I have a legal dispute with a contractor. I checked his license some months ago on the CSLB web site and it was suspended due to a Worker’s Comp cancellation. Now when I check the license, the suspension has been lifted and I have no way of telling when this took place. Can you answer a few questions: First, how do I find out if the license was suspended for a specific time period and second is there a way to get this information in writing from the CSLB?A: Thank you for the email. On the CSLB web site under the Current Worker’s Compensation information tab there is a link to a company’s “Workers Compensation History”. Not knowing the name of the company you are referring to I chose one at random as an example. This particular corporation has been licensed for over ten years and has had coverage from a series of insurance companies. The effective date each year is 12/31 and the expiration date is 12/31 of the following year. In other words there is no lapse that I can see during this ten-year period.The company you’re referring to likely filed a backdated certificate. This is allowed under Code Section 7125.1 which states, “the Registrar shall accept a certificate…as of the effective date shown…if the certificate is received by the registrar within 90-days of that date and shall reinstate the license…if otherwise eligible, retroactive to the effective date of the certificate.”Further if the licensee can show that the failure to file the certificate within this 90-day period was due to circumstances beyond his control, he can petition the Registrar to accept the form and lift the suspension retroactively.The sure fire way of determining if and when a license was suspended (or in good standing) is to request a Certification of Records for the time period in question. This can be done by paying the $67.00 fee and filing the prescribed form by mail, or by delivering the form directly to the CSLB, which I often do for clients.

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