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Bankruptcy & your government security clearance

Bankruptcy & your government security clearance

Military and government personnel are concerned that filing bankruptcy may negatively impact their security clearance and their jobs — even when a superior instructs them to file. Here are some guidelines.

Whether a consumer bankruptcy filing will affect current or requested security clearance depends on the honesty of the person being investigated, the individual circumstances and the opinion of the adjudicating agency.

All investigations are performed by the Office of Personnel Management/Federal Investigative Services (OPM/FSI) staff or OPM outside contractors.

OPM/FIS reports to the “client” – a government agency – and the agency performs the actual adjudication. Depending on the situation, the agency can (1) deny clearance, (2) approve clearance, or (3) issue a provisional or temporary clearance pending further investigation. There is due process and an appeal procedure.

Falsifying any information on the investigation questionnaire or in interviews is very damaging to the applicant.

OPM/FSI investigations use the “whole person” concept. Efforts to mitigate negative behavior or action are key elements. For example:

» If a person has overwhelming debt from family medical bills and makes a timely bankruptcy filing along with credit counseling and any other discharge requirements, the bankruptcy may be regarded as a good faith action to mitigate the problem.

» If a person runs up irresponsible credit card debt and refuses to acknowledge requests for payment for some time and there is subsequent legal action, a bankruptcy may not be regarded as appropriate mitigation and may negatively affect the security clearance.

More information on bankruptcy and security clearances.

Questions? Call or click here for a free consultation with a skilled, experienced Boleman Law attorney to discuss your situation.

Boleman Law is Virginia’s largest consumer bankruptcy law firm. Since 1991 we have helped over 106,000 Virginians regain their financial health.

We will help you.

Mark C. Leffler

Mark Leffler, Shareholder and Chief Legal Officer, joined Boleman Law Firm in 2000. Mark has spent most of his career litigating in Bankruptcy Court, including bringing numerous actions against debt collectors, mortgage companies, and predatory lenders in bankruptcy. He currently focuses his practice on federal consumer protection litigation, mostly under the Fair Credit Reporting Act.

Mark is President of the NACTT Academy for Consumer Bankruptcy Education, is a frequent author for the NACTT Academy’s webzine, and has served as a panelist at numerous national legal conferences such as the National Association of Chapter Thirteen Trustees (NACTT) and the National Consumer Law Center (NCLC). Mark is AV® rated by Martindale Hubbell, he was selected for inclusion in The Best Lawyers in America for his work in bankruptcy and debtor rights, and he is a frequent speaker and author on bankruptcy matters for Virginia CLE programs.

Mark was raised in Williamsburg, VA, and lives in Norfolk, VA with his wife, Leigh, and two children. In his free time, he enjoys staying physically active, regularly training in powerlifting, snow skiing during the winter, and traveling with his wife.


©2023 Boleman Law Firm, P.C.

©2023 Boleman Law Firm, P.C.

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