Summer waves are calling – and it may be tempting to spend some of your current bonus windfall on a new boat. But you may want to think twice before you set up an aggressive payment plan on that major purchase rather than paying cash. Sometimes all it takes is a single significant purchase to derail your finances when your career starts to drift.
True or False: A Single Financial Pitfall Isn’t Enough to Sink Your Security Clearance
Reading through the security clearance appeals process is often an exercise in understanding the unpredictability of the job market. And just how being financially overextended can create issues if you find yourself at the other end of a layoff, reduction in force or market flip will create issues that can be difficult to overcome.
A recent applicant for a security clearance was a 40-year-old man who worked in sales for 10 years. Sales and compensation declined, forcing him to find another job. Unfortunately, his job issues resulted in a $29, 476 charged off loan from a credit union. The unsecure loan was for a boat, and after two years the applicant stopped paying the loan and the credit company charged off the loan balance. The applicant later sold the boat for $18,000, but didn’t use the money to pay off the loan – he used it to pay off living expenses.
It’s typical to see DOHA cases involving financial issues that have perhaps dozens of charged off loans or other financial issues. Like this case, sometimes there is a single significant financial issue at the crux of the case (the applicant did also have a few other debts under $1k and had failed to file taxes in 2018 – but did catch up in 2022).
True: A Single Financial Issue May be Seen as a Red Flag
Based on a reading of the case, it seems there just wasn’t enough passage of time or mitigation of the decision to charge off the boat loan and not pay any of the amount owed. While the applicant argued he had used the funds to pay off living expenses, the case didn’t outline his inability to pay through paystubs or other documentation. Even providing a budget, bank account records from the time period, or other documentation may have assisted.
It’s not safe to assume too much from the published record, but basic speculation suggests there is a chance that even the boat issue could have been mitigated with better documentation. When it doubt, provide as much information and context as possible. The whole person concept depends upon the applicant to give that 360-view. Left only to the written record and a list of charged off accounts does not give the government much to work off of to consider your personal argument that you couldn’t pay off the loan.
You might be able to buy a boat this summer. But if you can’t pay for it – you might not be able to keep you clearance afloat.
