When you have a security clearance, financial problems are even more stressful because you worry about your security clearance. For most people, bankruptcy seems like an obvious solution to financial trouble. If you have a security clearance, you worry about whether the bankruptcy will affect your security clearance. Here’ what you need to know about your security clearance and bankruptcy.
- Bankruptcy does not mean that you will automatically lose your security clearance.
- Financial problems are grounds for revocation or denial of a security clearance.
- Failing to take care of your financial problems, increases the risk that you will lose your security clearance.
- Bankruptcy is provided for in the United States Constitution and is established at federal law as a means for dealing with financial problems. However, you need to go into a bankruptcy with open eyes and all the facts.
No lawyer can guarantee an outcome. That is particularly true when it comes to security clearances, because the basis for revoking or denying a security clearance is discretionary and includes a review of your entire background. I won’t make a guarantee that your security clearance won’t be affected; however, I can give you the guidance to minimize the risk to your security clearance.
- Security clearance reviews are exercises in trust. Can the United States government trust you with its secrets? Make sure that you are absolutely truthful with your bankruptcy lawyer.
- The reviewing officer will see your financial problems on your credit report, whether its repossessions, lawsuits, missed payments, or foreclosure. Bankruptcy is a method of dealing with your financial problems. It is better to show the reviewing officer that you are handling your problems than it is to just act like the problems don’t exist of don’t need to be handled.
- The circumstances of your financial distress are critical. The reviewing officer is going to be a lot more understanding if you are filing bankruptcy because of the financial toll from multiple deployments, divorce, a spouse’s unemployment, or because you made some financial mistakes years ago that you just can’t get on top of without a bankruptcy.
- Debts from gambling or substance abuse are high risk, because problem gambling and substance abuse are by themselves grounds for denial or revocation of your security clearance.
If you are experiencing financial distress and you have a security clearance, then you need to take action to address your financial problems. I offer a free confidential consultation, where you can openly discuss your financial situation, and I can offer possible solutions.