If you follow my articles with any regularity, you may have noticed that I’ve recently been writing quite a bit about various financial issues and how they can impact your security clearance. There is a calculated reason for this focus: year after year, financial problems continue to be the number one reason for security clearance denials and revocations.
Many of the cases we see involve unsecured debt such as credit cards, and “payday” loans – something I will be addressing in an article next month. But we also often encounter people who been subject to more dramatic (and, no doubt, traumatic) circumstances, such as the loss of a home or vehicle to a creditor. In those cases, the security clearance applicant is sometimes under the impression that the proverbial “spot” on their credit report is an insurmountable obstacle to obtaining or retaining the government’s trust. That’s not necessarily the case. But you must handle the situation correctly.
Two Concerns: Character and Coercion
As with any debt, the government has two concerns regarding the security clearance holder: (1) is the debt evidence of a lack of financial responsibility that would translate to a similar, carefree attitude about protecting classified information; and (2) does the debt increase the clearance holder’s vulnerability to bribery or coercion? To mitigate the first issue, the security clearance holder needs to show how seriously he or she attempted to resolve the financial delinquency before it resulted in the lender being forced to seize secured property to satisfy the debt. For example: Did you attempt to modify the loan? Did you seek out the services of an attorney and/or credit counseling service? Did you take-on a renter to help with the mortgage payments or drive a colleague to work in exchange for help with the car payments? Show that you were making a credible attempt to address issues instead of simply throwing up your hands.
In the event that proactive attempts to resolve the issue were insufficient, what was your conduct during the foreclosure or repossession process? Did you cooperate by turning over the keys, or did you hide, squat in the property, or vandalize the property as retribution against the creditor? From the government’s perspective, your conduct in meeting your financial obligations says a lot about your personal responsibility. The same goes for your conduct post-foreclosure or repossession. What are you doing currently to rebuild your finances and ensure that you are never again in a similar situation? Have you established a “rainy day fund” and cut back on unnecessary expenses?
Avoid champagne tastes on a beer budget
Finally, judges and security clearance adjudicators understand that the post-2008 era has been difficult financially for a lot of people. But one surefire way to squander that sympathy is to provide the appearance that you are willfully living beyond your means. Take a hard look at how you are spending your income each month and consider selling off things like RV’s, boats, show cars, or other “toys” that may generate questions about your financial priorities. You don’t have to live like a nun, but remember that appearances do matter.
This article is intended as general information only and should not be construed as legal advice. Consult an attorney regarding your specific situation.
