What Will Disqualify You from a Security Clearance?

Contrary to popular myth, filing bankruptcy doesn’t disqualify you from a security clearance. Such bankruptcy filing discrimination is illegal under federal law. In fact, the opposite is usually true. Although the underlying debt problems that force most people to file bankruptcy could disqualify you from a security clearance, filing bankruptcy often convinces authorities that the debtor isn’t a threat to national security and is on the right track, More on that below.

Additionally, a Chicago bankruptcy lawyer can represent debtors, or former debtors, at a security clearance challenge hearing, which is required by the Fifth Amendment. That’s an additional service a non-lawyer bankruptcy petition preparer cannot provide. Additionally, since a Chicago bankruptcy lawyer is already familiar with the issues involved, using the same lawyer is easier than starting over with someone else. This benefit reduces stress at a very stressful time.

Financial Concerns

The DoD places financial concerns alongside excessive alcohol or drug use and other personal conduct concerns. People who abuse substances often make reckless decisions, and people with serious financial issues sometimes make desperate decisions. This desperate decision could be selling secrets, a situation that’s arisen before and will arise again.

The specific concerns, and the way they relate (or don’t relate) to most consumer bankruptcy filings, are:

• Security Concern-Related Financial Problems: A red flag goes up if the security clearance holder has debts related to areas such as substance abuse or gambling. These people fall into the aforementioned categories. But most bankruptcy filers are good people who had a run of bad luck.
• Unwilling to Pay Debts: People who file Chapter 13 are clearly willing to pay their debts. They just got in over their head and need an income-based repayment plan, which is what this kind of bankruptcy offers.
• Illegal or Deceptive Practices: As mentioned, most bankruptcy debtors are honest people who got caught up in unfortunate circumstances. Bankruptcy filers are almost never involved in fraud, embezzlement, or other such illegal activities. The judge would probably throw out the bankruptcy in these cases anyway.

Chapter 13 gives debtors up to five years to repay allowed claims, such as past-due student loan and home mortgage payments. Chapter 7 discharges most unsecured debts, such as credit cards and medical bills, in less than six months.

Mitigating Circumstances

Now for the good news. Bankruptcy lines up with the mitigating circumstances listed in Guideline F of DoD Directive 5220.6, the governing authority in this area.

The most important mitigating circumstances are E2.A6.1.3.4. (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) and E2.A6.1.3.6. (The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts).

Bankruptcy filers must complete mandatory financial counseling classes, and bankruptcy controls financial problems so they don’t get worse. These mitigating circumstances are especially applicable to Chapter 13 bankruptcies, since it includes a repayment plan, which is a good-faith effort to repay overdue creditors or otherwise resolve debts.

 Work With a Thorough Cook County Lawyer

No matter what kind of financial problem you are having, bankruptcy could be a way out. For a free consultation with an experienced bankruptcy attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. Convenient payment plans are available.

Source:

law.cornell.edu/uscode/text/11/525