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26

Apr 2010

Filing Bankruptcy to Save Security Clearance

Posted by / in Weekly Posts / 2 comments

Someone came to me today and we are filing her bankruptcy tomorrow–we hope to save her security clearance and her job.

This lady had talked to me two years ago, when she first got into financial trouble.  But she was persuaded by her friends that filing bankruptcy would cost her job.  She struggled but could not fix her financial problems.

Last Friday she was told that her security clearance had been taken away.  And that she had no job assignment and would soon have no job.  That was the bad news.

But–this is the good news, and the boss really wants to help her–if she files bankruptcy and cleans up her credit, she can reapply for her clearance.   They wanted her to do that this week.  So we are filing her case tomorrow.

What’s the lesson?  This is what I tell everyone who will listen.  Filing bankruptcy causes your clearance to be investigated.  Being behind on your debts causes your clearance to be revoked.   (You cannot be in financial trouble and keep your clearance because you are tempted to sell things that don’t belong to you.)  Nobody likes being investigated, but just being told you are out of a job is a lot worse.

This lady is doing something important for our country–and keeping her job is important for her family–so we went all out to get her forms ready to send to the court tomorrow.  Hope it works.

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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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2 comments
  • Carl H. Starrett II

    May 4, 2010, pm31 2:04 PM
    01

    In one recent case, I got a Chapter 7 discharge for a client with a Top Secret security clearance. So far, there have been no adverse actions taken against him.

  • Robert Weed

    Robert Weed

    August 6, 2011, pm31 2:00 PM
    02

    The Air Force Academy has a useful link on filing bankruptcy–including a good paragraph on bankruptcy and security clearance. http://www.usafa.edu/superintendent/ja/bankruptcy.cfm?catname=JA

    They have a lot of “maybe” words, but generallythey back up what I’ve seen. Staying current on your bills is what you really want to do. But if you get behind filing bankruptcy is better than ignoring the problem.

    “The amount of your unpaid debts, by itself, may jeopardize your clearance, even if you don’t file bankruptcy. In that sense, not filing for bankruptcy may make you more of a security risk due to the size of your outstanding debts. By the same token, using a government-approved means of dealing with your debts may actually be viewed as an indication of financial responsibility. Eliminating your debts through bankruptcy may make you less of a security risk. “

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