Defense cutbacks are now certain. (At least as certain as anything is in this world.)
Lots of people whose jobs seem safe now will soon be out of work.
Will you lose your job and get behind on your debts? Please don’t jeopardize your security clearance–and your future. Please don’t put off filing bankruptcy.
That’s the lesson of the thousand people with security clearances I’ve helped. And the lesson of the half dozen who lost their security clearances because they filed bankruptcy too late.
Most people think bankruptcy destroys your security clearance. That is false. The worst thing for your security clearance is “irresponsibility.”
It is irresponsible to get into debt you can’t pay.
But if you have debt you can’t pay, the responsible thing to do is clean it up. The irresponsible thing is to ignore it. The irresponsible thing is to drag out the problem.
This is not just me talking. The legal office of the Air Force Academy says the same thing. (Thanks to the Air Force Academy for putting this valuable information in writing. So much in the security clearance world is not for publication.)
“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.”
Let me make it clear. Bankruptcy is not a good thing. Paying everything on time is a good thing. But bankruptcy is better than not paying. It is better than ignoring the problem.
I’ve helped a thousand people with clearances; and I know a handful who have lost their clearances. Nearly all lost clearances for an obvious reason–they did not come to see me in time. They did nothing until they were told they were in clearance trouble for financial irresponsibility. Then they checked around. Then they found out they should have filed bankruptcy when they first got into trouble.
Too late. They needed to show responsibility by facing the problem when they first got into the financial problem. Waiting until you get into a clearance problem is waiting too long.
Don’t wait too long.
(Russ DeMott, a bankruptcy lawyer in Charleston, SC, has an excellent article on security clearances. His experience is pretty much the same as mine. Except that he’s mostly talking about active duty military people. And my experience is mainly with civilians: DoD, CIA and Homeland Security employees, and employees of contractors in the defense, intelligence and security fields.)
(Here’s a more recent article by Brett Weiss, a bankruptcy lawyer in Maryland, who says pretty much what I am saying here about bankruptcy and security clearances. He also emphasizes the importance of self reporting to your clearance officer when you get into financial trouble, and before you file the bankruptcy.)