Sheehan & Associates, P.L.C.

Bankruptcy and security clearances: How mitigation helps

Why do people ultimately betray their country?

Half of them do it for the money. For some, it's pure greed -- they have plenty of money already but they just want more. For others, however, the lure isn't really the money -- it's the feeling of being out of debt that the money could bring.

That's why financial problems are a huge red flag when it comes to security clearances -- but those flags are going to be there whether you file bankruptcy or not.

Instead of viewing bankruptcy as the end of your hopes for a security clearance, you can present bankruptcy as a mitigating factor that shows you deserve a second chance -- assuming that you've taken some other necessary steps to mitigate your woes:

1. Be ready to explain how you got into your financial situation. If your spouse or child had a critical illness that led to enormous medical debts, that's something that most people can understand.

On the other hand, if you simply went wild with your credit cards when you were in your late teens or early twenties, demonstrate that you've gained a better understanding of financial management and learned the difference between actual needs and mere wants.

Give the person reviewing your case a reason to believe that you won't be right back in the same situation in a year or two by documenting your current budget and future financial goals.

2. Address any chronic problems under your control that could lead to a repeat financial crisis. If gambling is an issue, for example, get into therapy. The same goes for a shopping addiction.

If you were simply living beyond your means, it's time to downsize. You may have to accept that the trappings of success come slowly -- even if that means moving into a less upscale neighborhood, taking in renters or making other critical financial adjustments.

A security clearance isn't an automatic loss after a bankruptcy -- in fact, bankruptcy may help crack the door open to the possibility of one because it leaves you free of the debt that could lure you into accepting cash for information or favors. Just make certain that the rest of your efforts to control your debts are sufficient enough to warrant that second chance.

Your attorney can provide you with more information on how bankruptcy could affect a security clearance.

Source: Security Clearance Jobs Blog, "How NOT to Mitigate Financial Issues in a Security Clearance Case," Marko Hakamaa, June 06, 2017

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Sheehan & Associates, P.L.C.
1460 Walton Blvd , Suite 102
Rochester Hills, MI 48309

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