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BK and Security Clearance

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    BK and Security Clearance

    Does anyone have experience declaring bankruptcy, 7 or 13, while working with a security clearance? (Not getting one after BK) I currently work for DoD and must keep a security clearance to keep my job. We are in the unfortunate position of needing to file (posted my story on the why are you filing sticky), and I am concerned about the effect on my clearance. I had my periodic review last year and passed. During that process I had to have a frank conversation with the investigator about my financial position, which at that time was not as bad (everything was current). I mentioned if things got worse BK was a possibility. Well, things got worse. I have had a conversation with my security office and was told the most impotrant thing was to be upfront and honest. Let them know, not let them find out. When asked about it, accept responsibility and show the plan to become solvent. Even with this, I am still nervous. If I lose my job we will truly be destitute, but I am risk also by letting accounts go into charge off and getting sued. If anyone has gone through this and could share their experience it would be appreciated.

    Thanks

    #2
    I renewed my security clearance after a lapse. In fact, I have a clearance for classified information and I also received a clearance at a police department. Both went through my financials. Honesty is the bet thing. They just want to be sure that you could not be coerced or start taking bribes in order to cure your financial woes. While a bankruptcy is a big thing, it removes your debt and you should be solvent when you exit bankruptcy.

    I wait for more responses to see what others have gone through. I did not have an "active" clearance at the time of my bankruptcy. I did apply for clearances while my Chapter 13 was pending, and it was not an issue, although they wanted some details.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

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      #3
      At one time I had a Secret clearance - for that level and below (i.e., Confidential), the joke going around was you practically had to be a spy not to get that level. However, Top Secret and the various levels above are a completely different ball game. I'm not saying that you would have any issues, but if I were you, I'd try to downgrade any Top Secret clearance to just regular Secret.

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        #4
        I filed in Northern Virginia with a very good attorney who told me he had never had a client lose clearance for BK. A case can be made that filing does indicate a level of responsibility in dealing with your debts as compared to just running delinquents.
        Chapter 7 Filed 8/11/2009, Discharged 11/23/2009

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          #5
          You might find the link in my blog helpful: http://www.bkforum.com/entry.php?222...and-Bankruptcy
          LadyInTheRed is in the black!
          Filed Chap 13 April 2010. Discharged May 2015.
          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

          Comment


            #6
            My husband had a Top Secret clearance when we filed and he still has it. He hasn't been up for review since filing but he did talk to his chain of command and like you keep hearing, the key is to be upfront and tell them about it rather than letting them find out through their own devices. We were nervous about it before we filed but so far it doesn't seem to have affected us in that aspect.

            Good luck to you and welcome to the forum!

            The Bajan
            Filed Ch 13 Feb 9, 2012, 341 meeting Mar 15, 2012, Confirmed Apr 5, 2012
            Anticipated freedom party Apr 2015

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