It will definitely affect things in that it will take some extra time for the investigator to dig into all this and verify the details. Jeffrey W. Bennett, SAPPC, SFPC, ISOC, ISP is a podcaster, consultant and author of NISPOM, security, and risk management topics. Check out these stats: In short, individuals who have excessive and/or delinquent debt are seen to be a greater security risk than those who are more financially stable. "Quarterly Report on Household Debt and Credit 2021: Q1," Page 2. This does not apply to unmarried military personnel who live in barracks and eat in mess halls and others who are similarly situated. Your email address will not be published. But I dont think that same concern exists if you settled by paying some reduced amount. You may also be advised by the settlement company to stop paying your creditors and instead send payments to the. Through digging of information, proper presentation and counseling, Mr. Leckie had my charges reduced to the proper misdemeanors and I received 21 days time and court costs with the ability to keep my career. Whether you are a civil employee, a contractor or in the military, debt is and can be, a major issue in regards to security clearances and career advancement. In return for the settlement, they close the account and stop the collections process. Delinquent student loan debt in relation to national security clearance is governed under Guideline F, Financial Considerations in the Security Executive Agency Directive 4 (SEAD 4). You are correct in that they do want to know about debts that went to collections. However, I do have letters of settlement agreements that are within the last 7 years (the latest being January 2014). If the debt was largely beyond the persons control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation); If the person has received or is receiving counseling for the problem and there are clear indications that the problem is being resolved or is under control; If the individual displayed effort to repay overdue creditors or to otherwise resolve debts. Best Debt Consolidation Loans for Bad Credit. [email protected] Bay Ridge Road, Suite 230Annapolis, MD 21403, This website and the information on it are attorney advertising. This will only negatively impact the perception of you as an individual. You could negotiate with your creditors on your own or use a debt relief program like Freedom Debt Relief to help you settle your debt. If you have less-common types of debt, such as payday loans, you should also get reports from the specialty consumer reporting agencies, such as: You should also check the Maryland Judiciary Case Search for any cases that have been filed against you (http://casesearch.courts.state.md.us/casesearch/). While many of these qualities are difficult to pinpoint with scientific accuracy, how a candidate for a security clearance manages money is readily apparent, which helps explain why financial mismanagement is the most common area of disqualification. It depends on how much debt you had, how delinquent your debt was, and the state of other debt you have. If the debt was caused by irresponsibility (including reckless behavior) that is likely to continue, the problem is magnified. Accordingly, whether a bankruptcy would affect your security clearance prospects depends largely on the circumstances that prompted you to file. If none of the accounts in your own name show a poor credit history or delinquency, then your spouse's poor credit will not likely affect your security clearance application. Drug Use and Bad Debt. Is there another way to find out if they were 90 or 120 days delinquent? Some of these situations include military deployment, relying on others to manage finances, finicky housing markets, and bad investments. In fact, bankruptcy for legitimate causes shows you are not only taking a positive step toward resolving your financial troubles, but people who are debt-free are less inclined to compromise themselves with a bribe or some other illegal act, making them a superior candidate for achieving or maintaining a security clearance. Like I said I will report asap, my 86 hasnt been sent in yet. Soon after, Jeff began writing other security books and courses, and started his company Red Bike Publishing, LLC. Significant delinquent debt is a security concern. Debt relief allows you to resolve your unsecured debt (debt that is not backed by collateral like a car or a house; most often credit card debt) by negotiating with creditors and reducing the amount you owe. Security clearance is a critical designation within the U.S. national security system. The most important thing with security clearance requirements is to be open and honest about your financial situation and show that youre working towards a solution. In 2018, about 28% of consumers had a debt reported to a third-party collector, and 9% had at least one 60-day delinquency on a credit card, according to the Consumer Financial Protection Bureau. If you want, or have, a job that requires you to know and share secret government information, you require a security clearance. Otherwise, it could appear as though youre attempting to hide something or downplay your debts, which only works against you. Recent Trends in Debt Settlement and Credit Counseling. If, on the other hand, your financial troubles are an extension of personal foibles, such as gambling or alcohol addiction, or illegal activity, you can kiss that security clearance goodbye. . With a plan in place, your debt doesnt have to be a noose around your security clearances throat. I settled this debt a couple of years ago. Its considered a security risk if your debt portrays you as a person who makes poor decisions or isnt reliable once you make a commitment. Response to debt is evaluated by the things people do (or dont do) about delinquent debt. Denver Office7555 East Hampden Ave., Suite 600Denver, Colorado 80231, Castle Rock Office900 Castleton Rd., Suite 200Castle Rock, Colorado 80109-3307, Colorado Springs Office1975 Research Pkwy., Suite 100Colorado Springs, Colorado 80920, Highlands Ranch Office1805 Shea Center Dr., Suite 180Highlands Ranch, Colorado 80129, Westminster Office11080 Circle Point Rd., Suite 140Westminster, Colorado 80020, Denver Office216 16th St., Suite 750Denver, Colorado 80202, Colorado Springs Office2 North Cascade Ave., Suite 1000Colorado Springs, Colorado 80903, Centennial Office8000 South Chester St., Suite 125Centennial, Colorado 80112, Southlake Office3120 Sabre Dr., Suite 160Southlake, Texas 76092, Fort Worth Office600 West 6th St., Suite 473Fort Worth, Texas 76102. Residency Requirements. 1 reason clearance applications get denied and current clearances get revoked. Are you working to pay down your debts? Blog Careers Privacy Policy Terms & Conditions Text (SMS) Disclaimer Copyright Robinson & Henry P.C. Forgiven debt is taxed at the same rate as your federal income tax bracket. This website uses cookies to improve your experience. Privacy Policy, Assault and Battery Against a Family Member, Possession with Intent to Distribute (PWID), Defense Office of Hearings and Appeals (DOHA), Spouses Debt and How It Affects Security Clearance. According to the Center for Responsible Lending, scores may fall by 60 to 100 points, but the exact amount depends on your situation. In order to help you make a more educated decision, there are three rules you should be aware of. Even if you do have excessive and/or delinquent debt, here are some factors that may relieve the governments concern over your financial standing: Due to past events of leaks of secret information and the ease of new technology, the government can now increase its frequency of financial audits on current employees and its reach on background checks for new hires. "State of Lending: Debt Settlement," Page 5. This is my first government job and Ive never had a security clearance before. These cookies will be stored in your browser only with your consent. A security clearance lawyer will also help prepare you for the questions that could arise during the application process and can help you to rebut or mitigate them. In contrast, if you share an account with your spouse and your own credit history is negatively affected as a result of their debt, it could have a larger impact on your security clearance application. The Debt Settlement Arrangement applies to the agreed settlement of unsecured debts, for example, personal loans, overdrafts, credit . Handling Debt and Your Security Clearance Handling Debt and Your Security Clearance Watch on If you're considering debt consolidation, you might be wondering if it will affect your security clearance. Security Clearance. The judge ruled against the applicant. Adjudicative Guideline F; Financial addresses when a person lives above their means or fails to pay debts. If you are below 500you have damage. You pay the debt settlement company, which, in turn, pays your creditors. It's less time-consuming to hire a debt settlement company than to negotiate with creditors on your own, especially if you have several creditors to deal with. You may be asked to sign a release for information on the financial matters. Also, I was unaware of having to report these things. document.getElementById( "ak_js_2" ).setAttribute( "value", ( new Date() ).getTime() ); Mr.Leckie took me on as a client and really made me feel confident and at ease about my case.Since the first time I talked to him for a consultation I knew I wanted him to represent me not only was his background impressive but I felt like he shared the same passion as I did for this case.My case was a misdemeanor assault on family member charge which thanks to Mr.Leckie will not be on my record because we won the case was dismissed.I appreciate the time and effort he put into my case hire him and he'll do the same for you!!! . Learn more about our law firms philosophy and values. The applicant traces his financial difficulties to his having a disagreement with his supervisor and leaving his job, thinking that he could do better, but was not able to find good work. Be ready to defend yourself against bad information or nefarious actors. It depends on several factors, however. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. For example, you might have challenges getting approved for a home loan. Aside from compulsive/addictive behavior, deceptive/illegal financial practices, and unexplained affluence, the remaining potentially disqualifying conditions detailed in Guideline F can be boiled down to one security concerndelinquent debt. If the debt occurred due to situations beyond the applicants control and the applicant is handling the debt in a reasonable manner (including bankruptcy or debt consolidation), the significance of the problem is substantially reduced. The issue with debt isnt really about the money itself. This lower negotiated amount is agreed to by the creditor or collection agency and must be fully documented in writing. Creditors see it as a negative, however, but it's not as negative as not paying your account at all. I have also spoken with a credit counselor about budgeting and credit cards. Your input and response has helped a lot to ease my mind! If your creditors agree to a settlement amount, the settlement company pays the creditors and takes a fee for the work of negotiating the settlement. Creditors are required to send you a Form 1099-C for reporting canceled debts, and the IRS will expect you to include the debt on your tax return. While excessive debt can be a reason for denying a security clearance application, there is not a set amount of debt in the military that will result in the application being denied. Conclusion: Debt Settlement Has Tax Consequences. Classic indicators of irresponsibility and unethical behavior are: The words, bankruptcy and credit counseling do not appear anywhere in the Adjudicative Guidelines.