Security Clearances and Financial Issues – Be Careful!

I have been handling all aspects of security clearance law for many years, from the initial SF 86 questions and concerns, answering SORs (Statement of Reasons) through the administrative hearing of an attempted clearance denial or revocation by the government.  I am writing this particular blog post now because I have noticed a disturbing trend over the last couple of years.

It appears to me that the government is taking an extraordinarily strict view of financial issues where individuals hold a security clearance or are trying to get one.  It was not always this strict and there used to be, in my estimation, a more forgiving nature by the government when a clearance applicant was only dealing with financial problems.  From what I have seen lately, that is no longer the case.

How to Approach Your Security Clearance Situation If You Are Experiencing Financial Problems or If You Have Outstanding Delinquent Debt

1. Pull All 3 Credit Reports

The start point for anyone who has an existing clearance that is up for renewal (every 10 years for a Secret clearance and every 5 years for a Top Secret) or is applying for an initial clearance is to pull all three of your credit reports. Get them from this site and the best way to do so is to mail in the attached form to the Atlanta address and request ALL three credit reports.

2. Compare Your Credit Reports to Your Debts

Once you have all three of your credit reports, compare them to all of the debts that you do have so you can compile a complete list of your debts, the balances and the status of each debt (e.g., current, behind (and how much behind, charged off, sued on a debt, judgment, etc.).

3. Check If You Have Any Lawsuits Against You

Go to your local county courts/probate office/title office where you have lived for the past 10 years and check the records for any lawsuits and judgments that have been entered against you. Get a copy of all of these and figure out the status of each debt.

If you have NO delinquent debts and no lawsuits or judgments against you (and your financial situation has been like this for the past 10 years), you can move on to any other issues that might give you concern for your clearance and not worry about your debt situation.

If, however, you are behind on any debts and/or lawsuits have been filed against you or judgments entered against you, you must immediately take steps to address your debt.

4. Properly Dispute Any Debts On Your Credit Reports

If you dispute any of the debts on your credit reports, make sure to immediately and properly dispute the debts in this correct way ONLY. Keep copies of everything you send (by certified mail, return receipt) and receive.  You will need to provide this information to the security investigator when requested.

5. Work Out a Payment Plan on Delinquent Debts

If, on the other hand, you owe the delinquent debt, try to work out a repayment plan. If you do so, you MUST get this plan in writing showing the payment plan is agreed to by the creditor.

Just a note of caution here – old debt may be uncollectable.  That doesn’t mean it is not owed; it simply means that it may be too old to be able to sue you on it.

Another twist here is that, in most jurisdictions, making even a very small payment on an old time-barred debt may re-start the applicable statute of limitations.  Talk to a consumer lawyer first before you do anything here if this scenario applies in your situations.

6. Talk to a Bankruptcy Attorney About Your Debt Options

If there are several delinquent debts and your financial situation is precarious, talk to a bankruptcy lawyer about your options. As a hard and fast rule, my advice is to always file a chapter 13 bankruptcy plan and try to pay back all of the delinquent debt.

This is, in my experience, the single best option to ensure clearance success where delinquent debts are involved.  This is especially the case if there are multiple bankruptcies in a lifetime or if there are other areas of concern with regard to your clearance, in addition to the financial issues.

In sum, if bankruptcy is contemplated, a “full-pay 100% chapter 13 plan” will give you the best opportunity for success with regard to getting or retaining a security clearance.

7. File Your Tax Returns Immediately

One last item that gives a lot of people trouble is if you have NOT filed any required tax returns in past years, you MUST file them immediately!  If you don’t, your security clearance will be in GREAT jeopardy!

Then, once ALL of your returns are filed and if you owe taxes, pay it or work out a payment plan with the taxing authorities.  If you are looking to file a chapter 13 bankruptcy, you can even pay back any back tax that is owed as part of your chapter 13 plan.

Consult With a Security Clearance Attorney For Help Today

If you have a security clearance or want to get one, make sure you know your complete situation as early as possible.  If you would like to consult with me, I always advise people to do so at the earliest possible time, preferably BEFORE you are required to complete the SF 86 form.

Please feel free to contact me, by phone or email, if you would like to discuss any concerns that you have regarding your clearance.  My goal is to put any security clearance issues and concerns that you may have to rest at the earliest and lowest possible level.

Book

“Security Clearance Issues, Problems, Denials and Revocations” - Written By: Attorney Ronald C. Sykstus

Most Popular Security Clearance Blog Posts

Share This Page

Bond & Botes Law Offices

At Bond & Botes, we now offer full service bankruptcy consultation and filing over the phone or by video from the comfort and safety of your home or office. Please call 1-877-581-3396 or click here to setup your free phone or video consultation.

The lawyers at the Bond & Botes affiliated offices serve clients at offices in Anniston, Birmingham, Mobile, Montgomery, Opelika, Decatur, Huntsville, Florence, Haleyville and Gadsden, Alabama; Vicksburg, Hattiesburg and Jackson, Mississippi. Read our disclaimer here. You can view our Privacy Policy here.

Alabama Offices

Birmingham

2107 5th Avenue North
Age-Herald Building
Birmingham, Alabama 35203
Phone: (205) 802-2200


Shelby County Location
15 Southlake Lane, Ste 140
Birmingham, AL 35244
Phone: (205) 802-2200


Florence Location
121 S. Court Street
Florence, AL 35630
Phone: (256) 760-1010


Huntsville Location
225 Pratt Avenue NE
Huntsville, AL 35801
Phone: (256) 539-9899


Montgomery Location
311 Catoma Street
Montgomery, AL 36104
Phone: (334) 264-3363


Decatur Location
605 Bank Street
Decatur, AL 35601
Phone: (256) 355-2447


Haleyville Location
914 19th St.
Haleyville, AL 35565
Phone: (205) 486-3580


Gadsden Location
430-B Chestnut Street
Gadsden, AL 35901
Phone: (256) 485-0195


Opelika Location
216 South 8th Street
Opelika 36801
Phone: (334) 887-7666


Anniston Location
1302 Noble St #2C
Anniston, AL 36201
Phone: (256) 344-3559


Cullman Location
200 Second Avenue SW
Cullman, AL 35055
Phone: (256) 739-9866


Mississippi Offices

Jackson Location
120 Southpointe Dr., A
Byram, MS 39272
Phone: (601) 353-5000


Hattiesburg Location
607 Corinne St, Ste B8
Hattiesburg, MS 39401
Phone: (601) 353-5000


Vicksburg Location
1212 Farmer Street
Vicksburg, MS 39180
Phone: (601) 353-5000

© 2024 by Bond & Botes Law Offices. All rights reserved. Disclaimer | Privacy Policy