This article is on bankruptcy and security clearances. It is important to anyone that relies on a security clearance to obtain and maintain gainful employment when a security clearance is a basic requirement.
Why This Article on Bankruptcy and Security Clearances is So Important?
Our service area is the Washington DC Metropolitan area. Consequently, many clients and callers ask: “what effect a Bankruptcy filing would have on their security clearance.” We understand that a security clearance is critically important to a huge segment of our local working population.
We have a ton of Federal agencies headquartered in Washington DC proper, as well as surrounding areas in both Virginia and Maryland. Furthermore, there a lot of military and government contractors that hire or cannot hire folks based on their ability to attain a security clearance.
Generally, filing for bankruptcy removes a concern which security personnel have in regard to a person’s financial stability. An employee who is heavily in debt or financially insolvent is considered a high risk.
This is one of the major concerns the Defense Office of Hearings and Appeals weighs in security clearance cases. The exact law is found in the Code of Federal Regulations, and reads as follows:
Filing for bankruptcy removes a concern which security personnel have in regard to a person’s financial stability.
Some Background for this Bankruptcy and Security Clearances Article
147.8 Guideline F—Financial considerations.
(a) The concern.An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Unexplained affluence is often linked to proceeds from financially profitable criminal acts.
(b) Conditions that could raise a security concern and may be disqualifying include:
(1) A history of not meeting financial obligations;
(2) Deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan statements, and other intentional financial breaches of trust;
(3) Inability or unwillingness to satisfy debts;
(4) Unexplained affluence;
(5) Financial problems that are linked to gambling, drug abuse, alcoholism, or other issues of security concern.
(c) Conditions that could mitigate security concerns include:
(1) The behavior was not recent;
(2) It was an isolated incident;
(3) The conditions that resulted in the behavior were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation);
(4) The person has received or is receiving counseling for the problem and there are clear indications that the problem is being resolved or is under control;
(5) The affluence resulted from a legal source;
(6) The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.
On the other hand, this statute also indicates that there is hope for anyone that clearly indicates that they are working on their financial problem and their problem is either being resolved or is under control.
That’s where we help! We help our clients remove these security concerns. We can provide the path that assists our clients maintain and continue their security clearance. Plus, some have actually increased their clearance level over time.
