Real Estate Agents and Bankruptcy

When the housing market turned a few years ago one of the hardest hit groups was real estate agents. We have represented numerous real estate agents in bankruptcy recently. Real estate professionals have their own set of issues to deal with in bankruptcy, that regular debtors do not. The first issue is knowing how many pending sales the agent has to properly evaluate the available exemptions. The bankruptcy estate owns all non exempt proceeds from house closings due on the date of the bankruptcy filing. The second issue I commonly see with real estate agents is unpaid tax debt. This is common due to how agents get paid in one lump sum without any taxes taken out of the check. It is important for agents to do tax planning to make sure they do not get stuck with tax debt.