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Bankruptcy and Security Clearances
Can I Obtain a Security Clearance if I File Bankruptcy?
Our Hawaii Bankruptcy Attorney Provides Solutions
Security clearance is an essential qualification for a military career. Without it, promotion may be difficult and service members may be removed from their assignments if they are unable to achieve and maintain proper security clearance. Hawaii bankruptcy lawyer Blake Goodman assists military personnel with financial problems every day. If you have questions about military service, security clearances and debt, contact our office for confidential and candid legal advice from our security clearance lawyer.
Do Financial Difficulties Hinder a Security Clearance?
A 2006 memo with the subject “Implementation of Adjudicative Guidelines for Determining Eligibility for Access to Classified Information” from the Department of Defense outlines the reasons why financial difficulties may be cause for denial or revocation of security clearance:
“Failure or inability to…meet financial obligations may indicate poor self-control, lack of judgment or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”
The memo then proceeds to list financial factors that may pose obstacles to achieving clearance, including:
- Inability or unwillingness to pay debts
- Debt caused by irresponsible spending
- A history of not meeting financial obligations
- Embezzlement, theft and check fraud
- Failure to file tax returns
- Unexplained affluence
- Evidence of gambling problems
Some factors that are not listed as concerns include:
- Low credit scores
- Debt negotiations
You read that correctly – debt negotiations or a Chapter 7 or Chapter 13 bankruptcy is not a reason for denial of security clearance.
In fact, military personnel are more likely to be denied a security clearance if they have unmanageable debt and have done nothing to fix the problem. Servicemen and women who are honest about their debt situations and demonstrate efforts to fix the situation will be in a better position to achieve or maintain a security clearance than individuals do nothing to address their financial difficulties.
How Can I Address Those Financial Difficulties?
If you are in this situation and don’t know what to do then giving those of us at Blake Goodman a call might be what you need. Not only can we help you with your final decision, but we can give you peace of mind with your situation
The stress something like debt puts on the mind can be monumental. It does more than just impact your finances, but changes every decision you make in life. Grocery shopping? You wonder if you can afford what you are paying for. Car troubles? You worry that you are going to have to take out a loan that you can’t pay back.
Nobody should have to deal with this kind of stress and that’s what we at Blake Goodman are here to help you with. We can help you erase that debt, take the necessary steps towards getting back into a positive financial situation, and eventually be in a situation where you feel great about your finances. For many, however, the first step is the most difficult and that is accepting they need to file for bankruptcy.
Far too many people wait too long to accept that they need to file for Bankruptcy and instead spend years in debt allowing that debt to cripple them.
Bankruptcy will not ruin your life
A huge misconception about bankruptcy is that it will ruin your life. You will never receive a security clearance, you will never buy a house, and it will remain on your credit report forever. Absolutely none of this is true.
As we already showed you earlier, bankruptcy does not have an impact on your ability to obtain a security clearance. Nor does a poor credit score or being involved in debt negotiations. This is because most of these not only go hand in hand but are a sign that you are attempting to solve your debt.
Through bankruptcy, the majority of your debts may be cleared from your name and allow you to take those first steps toward living a debt free life. This is the purpose of bankruptcy. To give you a second chance.
What about my credit score?
When you file for bankruptcy your credit score is going to take a hit, but considering you are in deep enough debt to where you have to file for bankruptcy your credit score was probably already not great. In fact, in a way, filing for bankruptcy can improve your credit score if you approach the steps afterward in the correct way.
Once your debts have been cleared you are going to have a chance to build up positive credit through options such as mortgage loans, credit card payments, and car payments. Yes, the interest rates on these are going to be high, but as long as you are paying everything off on time you shouldn’t have to worry about that.
We Can Offer a Solution
The same DOD memo states that the individual under consideration should not be considered a risk if they have “received counseling for the problem…or given clear indication that the problem is being resolved or is under control”. It also worthwhile to note that filing for bankruptcy is a government-backed solution for overwhelming debt – the same government that currently employs you.
By seeking out bankruptcy you are actively seeking “counseling” for your debt. You are approaching a problem and attempting to solve it. As long as you are consistently working towards fixing the problem then your security clearance may remain safe. If you are still worried about losing your security clearance because of your financial situation then speak with those of us at Blake Goodman. We may be able to help you seek alternative options. We want to help make sure you don’t lose that security clearance that is likely a huge part of your livelihood.
If you’re worried about losing your security clearance due to a bankruptcy, our security clearance lawyer can help. Filling out our questionnaire or calling 808-528-4274 can be the first step towards solving your financial problems and achieving and keeping your security clearance.