Another Security Clearance Question

[bkw1nter]

My Wife and I filed Chapter 7 in June 2008 and were discharged in October 2008 we included our house in the BK and it is upside down by 200k we tried to do a Modification but it did not reduce the payment enough that we could afford so we didn't go through with it and they still haven't foreclosed yet, now my wife has been offered a job as a Teachers Aide in a DOD school and they want her to fill out a SF85P form Public Trust Questionnaire in this form she must list our Bankruptcy but they also want her to list any debt that is over 180 days late.... my question is since we actually don't owe the mortgage anymore because it is discharged debt do we have to disclose it in this section? I definettely don't want her to lie or deceive because I am sure she would be denied the security clearance if she did but I don't know if this would be classified as 180+ debt seeing as it has been discharged.... Also what do you think her chances would be of getting the clearance... I can't imagine it is a high clearance as she is just going to be a teachers aide.... Any help would be greatly appreciated she is really stressed..

[MSbklawyer]

My Wife and I filed Chapter 7 in June 2008 and were discharged in October 2008 we included our house in the BK and it is upside down by 200k we tried to do a Modification but it did not reduce the payment enough that we could afford so we didn't go through with it and they still haven't foreclosed yet, now my wife has been offered a job as a Teachers Aide in a DOD school and they want her to fill out a SF85P form Public Trust Questionnaire in this form she must list our Bankruptcy but they also want her to list any debt that is over 180 days late.... my question is since we actually don't owe the mortgage anymore because it is discharged debt do we have to disclose it in this section? I definettely don't want her to lie or deceive because I am sure she would be denied the security clearance if she did but I don't know if this would be classified as 180+ debt seeing as it has been discharged.... Also what do you think her chances would be of getting the clearance... I can't imagine it is a high clearance as she is just going to be a teachers aide.... Any help would be greatly appreciated she is really stressed..

Technically speaking, and contrary to popular belief, bankruptcy does not 'wipe out' or eliminate any debt. What it does is enjoin anyone from pursuing you personally to collect it. But the debt is still there. So a good answer might be: " I filed bankruptcy on xx/xx/2008, and at that time my mortgage was xx months late. That debt has been discharged, but I am listing it here in the interest of full disclosure."

[minan]

I'm in a similar situation because of a clearance job. I just filed a 13. Everything I've read about security clearance and bk is that you are better off showing you did something to try to resolve any financial issues even if you did a bk. Actually a bk is seen more as a positive action than negative.

You would be worse off for not doing anything and letting all your debts go into collections, lawsuits, etc....

I had to fill out a similar form as I'm looking for a federal job. I was honest and just put down that I had back taxes issues. At the time I filled out this form, I hadn't even considered bankruptcy so that's why I didn't put that on there....how I know that I'm going to have to deal with this same issue when my clearance comes up for review.

[killinstinct]

I am in law enforcement and would encourage you, as those above have, to be brutally honest in this area. You took care of the debt, but tell them the whole truth anyway. They are sure to find out the details anyhow, it's not difficult. I'm sure your explanation as advised by msbklawyer is more than adequate.

Good luck!