Military Security Clearance

[2cents]

Has anyone that has filed Ch 7 or 13 been denied a military security clearance or, more importantly, had one revoked?

I've read all the threads I can find on this topic and haven't been able to find a specific case of someone having a clearance revoked. I recently filed Ch 7 on 4/29 and currently have a security clearance and was looking for someone who has first hand knowledge of either keeping their security clearance or having it revoked.

A little background: I've talked with a JAG already and the best they could offer is that the military is neutral when it comes to BK and that it could be looked at in a favorable light (has a plan; taking care of things in a responsible manner; etc.) or a negative light (couldn't pay bills; irresponsible; etc). My BK is due to SBA business loan default with a personal guaranty with my house as collateral. Mainly non-consumer debt.

Any help or direction is greatly appreciated.

[GeG_Lost]

My husband got an email several weeks ago that said that bankruptcies, foreclosures, etc would no longer be used as a sole reason to deny or revoke a clearance due to the current economy. He actually self reported to his security office and they said that because he was honest and upfront that it should not affect him at all. They said that they would definitely be examining him closer if the debt was related to other issues or if there were multiple security issues. For example, if he had spent the last decade gambling and then filed. They said if the prior credit history was bad for years and years it might have more of an effect. He self reported in October and nothing has come of it. Our credit wasn't squeaky clean before, but it wasn't horrible either (at least until 6 months or so before).

[TEW]

Depends on the clearance and the command.

[2cents]

Thanks GeG!

"...they said that because he was honest and upfront that it should not affect him at all."

Who told him this, his security office or the folks that actually do the background investigations?

[2cents]

TEW, could you explain in more detail why you say it depends on the clearance and command? I've done a lot of research on the internet and I haven't found any information supporting your post.

[kenshirley]

There is no telling what the active duty military or DoD will do to a civilian.
Many things depend on the level of your clearance.
I was in the Army for many years and then worked for the Navy as a civilian until I was forced to retire due to base closure early.
I saw many civilians lose their clearances for different reasons over the years. Never for a BK though if that's good news for you. Also I will tell you a lot depends on how they feel about you as an individual.
Things may have changed as I retired in '93.

[GeG_Lost]

He went to both as far as I know because one sent him to the other. . If he was here right now I would ask. He keeps telling me that the key word in that is that they said it SHOULD not affect him, and that we should be prepared for all circumstances. We know one guy who is losing is TS because he is filing for the second time and has other legal issues. We also know someone who just got his TS with a foreclosure and two repos in the last couple of years. He had unique circumstances though, so it is hard to say how that affected it. Here is the text of one of the emails he recently got:

FYI,

As we are all certainly aware, the economic downturn is having a
negative impact upon all Americans - to include the men and women of our
Armed Forces, and the civilians and contractors who support them.

We have heard concerns from the field regarding individuals that are
experiencing economic hardships (loss of job by spouse, filing for
bankruptcy, foreclosure of home, inability to pay debts, etc.) and the
perceived impact this situation may have on the retention of their
security clearance. While we are concerned as well with regard to these
tough economic times, it is important to emphasize that the Adjudicative
Guidelines, specifically Guideline F: Financial Considerations, provide
mitigating conditions that apply to the current economic situation. One
example would be when the conditions that resulted in the financial
problem were largely beyond the person's control (e.g., loss of
employment, a business downturn, unexpected medical emergency, or a
death, divorce or separation), and the individual acted responsibly
under the circumstances. Mitigation can also occur when the individual
has initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts.

In an effort to ensure that Army personnel and the overall Army mission
are not negatively impacted by current economic conditions, Army G-2
will be taking the following actions:

1) work closely with the Commander, Army Central Clearance Facility
(ACCF), in order to monitor adjudicative determinations that involve
personnel who have experienced or are experiencing financial problems
due to economic hardship; and request the tracking of statistical
information pertaining to those financial issues and capture in a timely
manner any trends that would indicate an increase in unfavorable
security clearance determinations;
2) raise this concern to the ODNI through USD(I) and propose
consideration for policy guidance that addresses the current economic
situation in relation to security clearance adjudication.

As we address these concerns at the Army G-2 and national levels,
Security Managers and other cognizant personnel are reminded of their
responsibility to identify and advise personnel who are experiencing or
may experience, economic hardships that affect their ability to satisfy
their financial obligations. Correspondingly, Security Managers should
remind personnel that they have an obligation to report adverse
financial information as it becomes available.

Although the guidelines for reporting significant derogatory information
remains in effect, no presumption should be made that the individual's
situation or circumstances would necessarily result in the denial or
revocation of their security clearance. The Army CCF utilizes the
national Adjudicative Guidelines during the security clearance
determination process, but also applies the "whole person concept" and
reviews each investigation on a case-by-case basis.

Please ensure this message if provided to all your Security Managers and
personnel security specialists. Any and all proactive approaches should
be employed and shared with the Army community.

[2cents]

Thanks Kenshirley - I am in the reserves now and maybe active duty soon.

GeG - Wow. That email is very insightful. I am in the Air Force but I would assume (I hate to assume) that the information in the email is probably true for all branches of the military. I've tried to research the security clearance adjudication process for the AF, but I've been unable to find much.

The bottom line for me is, it is what it is, and I can't do much about what may or may not happen with regards to my clearance.

[GeG_Lost]

That is the way we felt. If we would of continued down the path we were following, we believe it would have still had as much of a negative effect on his clearance eventually. The only difference is we got to put a stop to the insanity now as opposed to spending who knows how long being constantly sick and worried all the time.

[ProjMgrNewb]

I work for a contracting company and currently am on a DoD contract. I filed a 7 in Feb, and reported it to my company's security office. Within a month-ish, I was asked to resubmit for my clearance and it is now under re-investigation. Just saw on my credit report where they pulled it last week.

[DSIG]

Being a newbie, I'm jumping in rather late on this thread but want to add my experience and include some invaluable resources that influenced my decision to file for bk. If you have a security clearance, carrying the debt versus filing or going through debt management is unfavorable. The latter actually demonstrates that you are making an effort to do something about your debt.

You are more a liability to the govt with debt. One main reason I am fiilng is to protect my clearance. I am prior service but I am a contractor now and I work many OIF program. Where I work, they want people who have prior OIF experience to work these types of program and its not easy to fill the positions because of the required skills and experience. My installation is also part of base closure, which means that I will be looking for a job in a year, or I can telecommute which I will do until I find another job.

My attorney says I qualify for a 7 if I include my husband's business expenses. I said I dont want to file 7. If things go south with the ch13 plan I can always convert. I have no property and only unsecure debt which makes me a perfect 7 candidate, right? I forced the 13 because I dont want the sc investigator who re-investigates my security clearance to say I walked away from my debt.

Here are some very useful articles, if you already did not stumble across them on the internet:

http://www.clearancejobs.com/news.php?articleID=39

http://www.clearancejobs.com/news.php?articleID=41

http://www.clearancejobs.com/news.php?articleID=44

[Amy26]

I started a gov't position in April of this year and requires a public trust clearance. I was only responsible to provide information to them up till 5/23/09 but because I was filing for bankruptcy (and I work in a financial department) I told them about it anyways. They were interested and asked me lots of questions about it. My clearance has not yet been approved, but I believe it will be fine. I also informed my managers about it before I filed to make sure that it would not be an issue.

When I was interviewed by the Office of Personnel Managment she said if I was going for a secret or a top secret clearance it could have been an issue.

However, as someone else mentioned due to the economy its not so much of a deal breaker. I was able to justify why I had to file ie, unemployed for 6 months, housing declines etc... wasn't like I went gambling and lost my shirt then filed for BK and tried to get a gov't job!

[DSIG]

However, as someone else mentioned due to the economy its not so much of a deal breaker. I was able to justify why I had to file ie, unemployed for 6 months, housing declines etc... wasn't like I went gambling and lost my shirt then filed for BK and tried to get a gov't job!

Its funny you mention the gambling part. When I found those clearedjob articles I posted as resources, I also found this court ruling about a woman who lost her clearance because of her gambling problem. I wish I could find the link and post it. Basically, the ruling said that the lady lied to the investigator about how much she discharged and she also lied about the nature of the debt. She was a compulsive lottery ticket buyer and kept buying lottery tickets even after she filed...and lied to the investigator about this also.

Bottom line, dont lie to the investigator about how much you discharged. Looks like they have a way of finding out but want to know if you are honest. Also, dont lie about how you accumulated the debt. More importantly, stay debt free after you file. Dont repeat old patterns; otherwise you are a big risk to the government.

[Amy26]

Wow that is interesting...the IO actually mentioned that to me specifically. She said not like you went out gambling .... wonder if she interviewed that woman!

Definately do not lie... that's what my managers told me. I wasn't required to tell them at all but I felt obligated to out of honesty and decency.

Although, I must say.... now that I work for the gov't... I think the risk to the gov't in regard to their employees is not about who is filing for bankruptcy. There are some pretty dim stars working for the gov't...at least from what I've seen at the agency I work for.

[DSIG]

here is the link http://www.dod.mil/dodgc/doha/indust...9-0124.h1.html

The investigator who brought up the gambling to you is trained to ask about 3-4 key areas when they talk to you or others about you. If you get a full blown TS, they will talk to everyone you know and dont know. The key items, if I remember, are: gambling, substance abuse, and ties with terrorists. I had a TS investigation. I didnt have a need for it but there was no way to stop the request once it was put in (from the Iraq deployment basically). The investigator met with me and asked me multiple times in different ways if I had ties to terrorists and he looked at me in the eye everytime he asked. They are trained to read your body language and know if you are lieing.

yes, the govt has some stellar non-performers, as I call them and they are everywhere and you cant get rid of them, they just get reassigned and become someone else's problem. That's the govt way! If you are a contractor and screw up and they dont like you, well, then, you will lose your job.

As a side bar but related to security clearances, we had a contractor here who had some fling with a govt guy. The guy was harassing her or something. So, she used a govt computer to type up this memo and used the DoD seal and made it look like it came from HR and she put it on the guy's chair in an inter-office envelope. The letter talked about a filed harassment complaint and there were even actions required from the guy. He got scared, called HR and the HR person whose name was on the bottom of the memo pressed charges with the provost marshall on post. Long story short, the contractor lost her job AND had her TS clearance was suspended....over something that stupid! We still talk about it at work.