I always feel like I’m repeating myself, because it’s a line I write almost weekly here at ClearanceJobs.com – financial issues are the top cause of security clearance denial and revocation. Coupled with lying on the SF-86, almost all other issues pale in comparison. And while we frequently call out financial issues, the fact is that not all debt is created equally. When it comes to your finances, Uncle Sam looks particularly harshly upon consumer debt and failures to satisfy debts to the government (thinks like taxes or delinquent student loans).
True or False: A $30k car payment defaulted upon will result in security clearance denial.
If you have a significant amount of consumer debt, it is going to take a favorable application of the whole person concept to overcome it. Which is exactly what happened for a 37-year old single mother of three who had consumer and medical debts totaling over $42,000. The largest debt was a $27,000 auto loan which had gone into collections. Smaller debts included a broken lease payment, cell phone contract, medical bills, and bank accounts. Some of these debts were on the applicant’s credit report, others weren’t.
Documentation was an issue for the applicant, and is a reason we typically advise that clear records can mitigate a number of financial issues. In some cases the applicant was unable to demonstrate how a bill had been charged off or resolved, or payment plan agreements that had been reached. Documentation in the background investigation included interviews that the applicant argued included incorrect information. The applicant argued those interviews should not be considered, and in the course of the appeal, the judge concluded the same and awarded the decision based on the SF-86, financial documentation and other information – not based on the background investigation interviews. This is a clear demonstration that sometimes the personal subject interview is your friend – and sometimes, it isn’t.
The applicant had been in a position working on medical billing. Her financial issues started after she was laid off due to a contract ending while she was on maternity leave. Two years prior to being laid off she had been in an auto accident, which resulted in her purchasing a new vehicle. She could afford the payments – until she was laid off.
False: The Government Will Consider the ‘Why’ Behind the Debt – Not Just the Amount
On the surface, a defaulted debt of more than $20k for a car – which was later repossessed – may seem like too significant of a security clearance issue. But this is why carefully documenting purchases and why defaulting occurs is key. In this case, because the individual was able to indicate that the car was ideal for her situation at the time – and one she could afford before her contract ending – the government didn’t count the defaulting against her. In certain regions and for certain positions, being able to maintain clearance eligibility is key for keeping employment. While the government is primarily out for its own interests when it comes to granting clearance eligibility, it’s also willing to consider hardship circumstances. So, if you’ve encountered hard times – even in the recent past – don’t preclude yourself from government employment.