Any experience out there with filing Chapter 13 and keeping a security clearance?

[TrackDog]

My wife and I should be filing our Chapter 13 this week. We both currently have security clearances. She is in the military, and I am a contractor; we both need our security clearances for our jobs. I was wondering if anyone out there had any experience with this? If I lose my clearance, I will most likely lose my job. I'm not sure how filing Chapter 13 will affect my status. I'm sure that filing will trigger a review and I'm sure I'll have to answer some questions at work. I'm filing to get control of my finances and will be in much better shape with the plan we have worked out. I would appreciate any advice there might be out there. Thanks!

[Cgriswold]

I surely don't know but I don't envy your position. I have a review due at some point and I expect bad things in that regard...

[Pandora]

Call the security officer and ask how it works - or you can ask your supervisor. They are there to help you and trust me, you arent the first person with a security clearance that has had to file BK in recent years While some people do end up losing their clearances, it becomes a judgment call on an individual basis because they will look at how and why you got yourself where you are, having to file.

Look for the Directive on Adjudicative Guidelines, specifically under Financial Considerations (guideline F); there are 13 categories that will cause denial or reduction of a security clearance.

ETA: Its DOD Directive 5220.6

[LadyInTheRed]

DOD Directive 5220.6 is at http://www.dtic.mil/whs/directives/c...df/522006p.pdf. Interesting.

It doesn't seem that filing for BK is a cause to remove a security clearance if the directive is followed. Look at Guideline F which covers financial reasons for revoking a security clearance:

E2.A6.1.1. The Concern: An individual who is financially overextended is at
risk of having to engage in illegal acts to generate funds. Unexplained affluence is
often linked to proceeds from financially profitable criminal acts.

E2.A6.1.2. Conditions that could raise a security concern and may be
disqualifying include:
E2.A6.1.2.1. A history of not meeting financial obligations;
E2.A6.1.2.2. Deceptive or illegal financial practices such as embezzlement,
employee theft, check fraud, income tax evasion, expense account fraud, filing
deceptive loan statements, and other intentional financial breaches of trust;
E2.A6.1.2.3. Inability or unwillingness to satisfy debts;
E2.A6.1.2.4. Unexplained affluence;
E2.A6.1.2.5. Financial problems that are linked to gambling, drug abuse,
alcoholism, or other issues of security concern.
E2.A6.1.3. Conditions that could mitigate security concerns include:
E2.A6.1.3.1. The behavior was not recent;
E2.A6.1.3.2. It was an isolated incident;
E2.A6.1.3.3. The conditions that resulted in the behavior were largely
beyond the person's control (e.g., loss of employment, a business downturn,
unexpected medical emergency, or a death, divorce or separation);
E2.A6.1.3.4. 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;
E2.A6.1.3.5. The affluence resulted from a legal source; and
E2.A6.1.3.6. The individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts.

While filing bankruptcy may be evidence of the conditions that would cause a security concern, it isn't a condition that should actually cause concern. To the contrary, it seems to be a mitigation of the conditions that would cause concern. BK is a good-faith effort to pay creditors or otherwise resolve debts. We also are required to get financial counseling as a part of bankruptcy, which is another mitigating factor. And, many people file BK for reasons beyond their control.

A person has a right to a hearing before their security clearance is revoked. If I had a security clearance that somebody was trying to revoke because of bankruptcy, I'd go to the hearing and argue that while I may have been considered a security risk before filing, the filing of BK and counseling I received are mitigating factors that no longer make me a risk. I'd point out that a Chap 13 has helped me to budget and spend with discipline which will keep me from being "financially overextended" in the future.

[toojerm]

I work at a Nuclear plant, and the filing actually made the annual clearance renewal smoother since debt concerns were being addressed in a chapter 13 (100%)

[minan]

We am in the same boat, however when we told the company FSO, they stated it's not bad as more and more have filed. A 13 can actually be seen as a positive plan to deal with debt and you have taken away any reason for someone to be able to blackmail, coerce you....you will have to explain in detail the reasons why (ours were taxes), but We stopped worrying. The biggest mistake would be to not be truthful on the paperwork. We made sure our customers knew as they can be interviewed and can vouch for you.

[Nomad]

I did manage to get a Secret DOD clearance during my chapter 13. I didn't try to go any higher though.

[zeezee]

I filed in 2009 and had a Secret clearance at the time. The mitigating circumstances were that my husband passed and I had lost his income. Anyway, I self reported to my SO. Last year I had to get an upgrade in my clearance (due to my position) to TS/SCI and I had to disclose my CH13. I had my background investigation and was approved and have not had any issues since.

If it makes you feel any better, they actually prefer a 13 over a 7 because it shows that you are at least paying back your debts.