Bankruptcy and Security Clearances

Can I Obtain a Security Clearance if I File Bankruptcy?

Our Hawaii Bankruptcy Attorney Provides Solutions

Security clearance is an essential qualification for a military career. Without it, promotion may be difficult and service members may be removed from their assignments if they are unable to achieve and maintain proper security clearance. Hawaii bankruptcy lawyer Blake Goodman assists military personnel with financial problems every day. If you have questions about military service, security clearances and debt, contact our office for confidential and candid legal advice.

Do Financial Difficulties Hinder a Security Clearance?

A 2006 memo with the subject “Implementation of Adjudicative Guidelines for Determining Eligibility for Access to Classified Information” from the Department of Defense outlines the reasons why financial difficulties may be cause for denial or revocation of security clearance:

“Failure or inability to…meet financial obligations may indicate poor self-control, lack of judgment or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”

The memo then proceeds to list financial factors that may pose obstacles to achieving clearance, including:

  • Inability or unwillingness to pay debts
  • Debt caused by irresponsible spending
  • A history of not meeting financial obligations
  • Embezzlement, theft and check fraud
  • Failure to file tax returns
  • Unexplained affluence
  • Evidence of gambling problems

Some factors that are not listed as concerns include:

  • Low credit scores
  • Debt negotiations
  • Bankruptcy

You read that correctly – debt negotiations or a Chapter 7 or Chapter 13 bankruptcy is not a reason for denial of security clearance.

In fact, military personnel are more likely to be denied a security clearance if they have unmanageable debt and have done nothing to fix the problem. Servicemen and women who are honest about their debt situations and demonstrate efforts to fix the situation will be in a better position to achieve or maintain a security clearance than individuals do nothing to address their financial difficulties.

We Can Offer a Solution

The same DOD memo states that the individual under consideration should not be considered a risk if they have “received counseling for the problem…or given clear indication that the problem is being resolved or is under control”. It also worthwhile to note that filing for bankruptcy is a government-backed solution for overwhelming debt – the same government that currently employs you.

If you’re worried about losing your security clearance due to a bankruptcy, our Hawaii bankruptcy lawyer can help. Filling out our questionnaire or calling 808-528-4274 can be the first step towards solving your financial problems and achieving and keeping your security clearance.