What should a contractor do if they are facing bankruptcy?

When a contractor is facing bankruptcy, the appropriate action is to notify the Arizona Registrar of Contractors (AZ ROC) and discuss the implications on their license. This step is crucial because bankruptcy can significantly affect a contractor's ability to operate within the state and hold a valid license. By informing the AZ ROC, the contractor can seek guidance on how to proceed while ensuring compliance with state regulations regarding their professional licensing.

Continuing to work without addressing the bankruptcy situation fails to consider the potential legal and financial ramifications. Transferring the license to another contractor would not resolve the underlying issues related to bankruptcy and might not be legally permissible. Liquidating business assets immediately might seem like an option, but it can lead to a loss of control over the process and does not address the obligations to creditors and the licensing authority effectively. Thus, engaging with the AZ ROC offers a pathway to understanding the implications of bankruptcy on their license and allows the contractor to take informed steps moving forward.