Bankruptcy and Security Clearances: What to Know
Declaring bankruptcy can have far-reaching effects on many areas of your life. When making this big decision, it's best to have a full understanding of the potential ramifications. If your job requires you to maintain a security clearance (or you want such a job in the future), it's vital that you understand how a bankruptcy filing could influence that issue. Read on to learn more.
Bankruptcies Are Allowed​
There are no rules automatically connecting a bankruptcy filing with a security clearance denial. To really understand what is being evaluated when you are considered for a security clearance, take a look at the list of below issues. As you can see, some of them can be construed as being directly related to financial issues while not directly addressing a bankruptcy.
Factors in Security Clearances
In most cases, decisions about security clearances are made on a case-by-case basis. When it comes to our nation's security, no computer program is capable of doing a deep dive into the reputation of a candidate like a human being would be. There are several major companies working to complete security clearances and background checks on job candidates and all of them use personal interviews along with information gleaned from government databases to form their evaluation. They look at the following:
- Mental disorders
- Criminal records
- Sexual behaviors
- Patriotism
- Drug and/alcohol abuse
- Foreign contacts and relationships
- Financial stability
Why financial stability? If you are deeply in debt, you might be more likely to accept money in exchange for secure information. Likewise, a person using drugs or connected to criminal matters might also be in a vulnerable financial position.
Why Did You File?
If your use of credit cards got out of hand, that may be exactly the kind of problem that makes a security clearance more difficult to obtain or keep. On the other hand, if unexpected medical bills or a divorce caused your financial situation to devolve, that reason for filing might be more understandable. Moreover, if you are having a lot of financial problems, it may not even matter whether you file for bankruptcy or not as far as a security clearance goes. Any one of the below might be a red flag due to security concerns.
- Being behind on bills
- Having collections or judgments
- Having liens or wage garnishments
- Owing to the IRS
- Living a lifestyle grossly outside of your salary
You should consider that bankruptcy could bring your financial woes to an immediate stop and that doing so might actually improve your situation for clearance purposes. However, if you are worried about how a bankruptcy might affect your life, you should speak to a bankruptcy lawyer before moving forward.