I have recently seen a rash of individuals holding security clearances or wanting to get a clearance who have an issue arise due to debt problems. While I have written about this topic previously here, it occurs to me to try and come up with a detailed analysis for someone with delinquent debts who is seeking a clearance (or in the process of losing one over debts!) to deal with these issues in the best possible manner for the best chance at clearance success. Of course, this advice should not replace your own judgment or that of your attorney. Every situation is different and requires a unique analysis based upon all of the facts and history of the individual security clearance applicant. I do consult on these issues nationwide so please feel free to reach out to me by email or phone if you have concerns in this area.
Every time you have to submit a new SF 86 for a new clearance or if you are renewing an existing clearance, as it relates to ANY financial concerns at all, here is what I advise security clearance applicants to do.
- Get your free credit reports only from this website and use the mail in form to get all 3 national reports (Equifax, Experian and Transunion) mailed to your home address.
- If your credit reports are perfect with no delinquencies or blemishes, then you should be in good shape regarding a clearance and any financial concerns.
- On the other hand, if there are delinquencies, charge offs, collections, etc., then you must address EACH and EVERY debt that is in this kind of status. Failure to address each debt will cause a problem. Don’t leave any delinquent debt unaddressed – make sure you have covered each one!
- If you have bona fide dispute to any of the delinquent debts, then make sure you put it in the formal proper dispute process only this way. Make sure to keep a copy of all signed dispute letters you mail out by certified mail, the return mail receipts, and ALL responses to your disputes. In other words, keep a complete copy of EVERYTHING as it relates to the dispute(s).
- If you can work out a payment plan with EACH delinquent creditor, that is an acceptable solution in this scenario. Make sure EACH debt is addressed and that you have WRITTEN proof of a payment plan and proof that it is accepted by each creditor.
- If you don’t have a bona fide dispute to each delinquent debt or written proof of a payment plan worked out with EACH delinquent debt, then consider a bankruptcy filing to address all of your debts. Discuss your situation with an experienced bankruptcy lawyer and strongly consider doing a chapter 13 bankruptcy where you pay back all of your debts in full. This is especially important if you have had a previous bankruptcy filing in your lifetime or any other issues that can effect a clearance in addition to your current debt situation, then a “full pay” 100% chapter 13, in my experience, makes the most sense in order to have the best possible chance to obtain and/or save a security clearance.
- Notify your FSO (facility security officer) immediately upon a bankruptcy filing.
- One other item as it relates to delinquent debts and it is critically important. ALWAYS file your federal and state tax returns on time! If you fail to do so or if you currently have any overdue un-filed federal and/or state tax returns, FILE THEM NOW! If you owe the IRS or the state for back taxes, you MUST work out a payment plan with each entity and have written proof of the plan if you do not file a chapter 13 bankruptcy to pay the back taxes owed, which is a prudent move if you can’t work out a payment plan on your own.
- Finally, make sure you answer all questions on the SF 86 perfectly and exactly correct and explain any issues in great detail where allowed to do so.
I have written previously about the various areas that can give the government concerns about someone who holds a security clearance, in addition to financial issues, from drug and alcohol concerns to foreign influence and preference.
If you need assistance with any aspect of a security clearance concern from answering specific, concerning questions on a SF 86 form or if you are facing a DOHA hearing to revoke your clearance, please feel free to contact me to see if I can be of assistance to you.