March 4, 2019
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Some military or government employees have security clearances which are necessary in their line of work. But what happens if you file for bankruptcy? How will that affect your security clearance?
The Department of Defense (DOD) Directive 5220.6 covers security clearances for the government. If you have security clearance and debt issues arise, Guideline F discusses whether there is a potential problem. You could potentially lose your clearance if you amassed debt due to certain deceptive or illegal financial practices, such as embezzlement, employee theft, or check fraud. Your clearance could also be revoked if the debts came about due to gambling or drug abuse.
However, there are several conditions that could mitigate security concerns which include, but is not limited to: the behavior was not recent; isolated incident; loss of employment; and unexpected medical emergency. Furthermore, in Paragraph 20(d) of Guideline F, it states that “the individual initiated a good-faith effort to repay creditors or otherwise resolve debts.” Bankruptcy is actually considered a good faith effort to pay or resolve your debts and it shows you have tried to address your debt issues.
Typically, filing for bankruptcy should not cause your security clearance to be revoked unless you have a recurrent, lifelong problem. If you are filing for a security clearance application for the first time, be sure to check your credit report first to see if there are any potential red flags. (You can obtain a free copy of your credit report at www.annualcreditreport.com) If you notice any debt problems, call us we have resources to address credit reporting errors and effective solutions to resolve valid debts.
If you currently have security clearance and are filing for bankruptcy, consider notifying your facility security officer (FSO). As long as you are honest and the bankruptcy was something that came about in a situation beyond your control (such as a business downturn, family medical issue or being laid off work), your clearance should not be affected.
Of course, every situation is different. So, if you think your security clearance may be a risk, please contact me. I offer a free consultation and can be reached at www.thedebtdoctors.com/contact/ or 1-877-332-8369.