Bankruptcy Blockers In Illinois: The Security Clearance
The Prairie State is home to over a dozen U.S. military bases. Many of the people who work at these facilities, as well as the area defense contractors that support them, count on their security clearances. They’re understandably very protective about them. Many people think that federal debt relief programs threaten a Chicago security clearance, but in most cases, that’s simply not true.
Title 32, Part 147 of the Code of Federal Regulations contains rules for the granting and denial of security clearances. An existing financial problem is one possible basis for adverse action. Such action could include the denial, downgrade, or revocation of a security clearance. But after people file bankruptcy, catch up on past-due payments, and receive a court-ordered discharge, their financial problems are nearly always in the past. From that perspective, Guideline F is completely inapplicable.
Common Financial Concerns in Illinois
It’s no coincidence that Guideline F is right before the alcohol consumption rules in Guideline G. In other words, investigators view some outstanding debts on the same plane as a few beers on the weekend. Drinking habits seldom trigger security clearance revocation, and the same is true for financial problems.
Nevertheless, there is a legitimate concern in this area. Chicagoans with money problems sometimes turn to unscrupulous methods, such as selling secrets, to raise funds. Some specific concerns include:
- – History of Unmet Obligations: Some people who file bankruptcy have very poor financial habits that resulted in a history of unpaid bills. But most people file bankruptcy due to one event, like a divorce or job loss, that has a snowball effect.
- – Underlying Issue: The government has a problem with security clearance holders that demonstrate “[i]nability or unwillingness” to satisfy debts. Chapter 13 filers are able to pay their debts but simply need more time. Chapter 7 filers are clearly willing to do something about their debt problems.
- – Nature of the Problem: Financial difficulties related to illegal or reckless behavior, such as gambling or excessive alcohol use, are of special concern here.
The bottom line in this section is that financial problems related to a one-time economic misfortune are not particularly worrisome in this context.
How the Mitigating Circumstances Match Up with an Illinois Bankruptcy
Many people think that bankruptcy is a red flag. But the opposite is true. According to this section, bankruptcy is the road map for avoiding problems in this area.
- – Isolated Incident: Typically, bankruptcy is related to an isolated incident. Furthermore, everyone makes mistakes from time to time. The response to these mistakes is what really matters, and bankruptcy is an appropriate response in many cases.
- – An Evident Change: “[C]lear indications that the problem is being resolved or is under control” is a listed mitigating circumstance. A Chicago bankruptcy certainly fits this description. Bankruptcy also represents a “good-faith effort to repay overdue creditors or otherwise resolve debts.” That’s especially true of Chapter 13 bankruptcies.
- – Source of Problems: The listed examples (loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation) almost mirror the reasons people file bankruptcy.
Chapter 7 liquidates unsecured debts, and thus disposes of financial problems, within a few months in many cases; Chapter 13 gives Illinoisans up to five years to repay their debts.
Partner with Experienced Attorneys
Bankruptcy helps many people avoid security clearance issues related to financial problems. For a free consultation with an experienced bankruptcy attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. Our main office is conveniently located about a block from the Richard J. Daley Center.
Resource:
gpo.gov/fdsys/pkg/CFR-2012-title32-vol1/xml/CFR-2012-title32-vol1-part147.xml#seqnum147.8
