Err on the side of elaboration. An applicant owed thousands to the federal government for several years of unpaid taxes. "Settling Credit Card Debt. Its also a good idea for anyone with a security clearance, or wanting one, to keep regular track of their credit reports, being alert to errors or fraudulent activity. I now have a credit card I pay in full every month and have been paying my school loans on time every month. Contact usto set up a consultation appointment. If none of the accounts in your own name show a poor credit history or delinquency, then your spouse's poor credit will not likely affect your security clearance application. Questions? Response to debt is evaluated by the things people do (or dont do) about delinquent debt. . How Debt Settlement Impacts Your Taxes - Upsolve Borrowers who pursue debt settlement often have trouble keeping up with payments to their settlement account, dropping out before their debts can be settled. That seems unlikely to change. You may be in luck. Delinquent student loan debt is a major concern that could negatively impact your security clearance if you do not take action to resolve it. Will settled debts that went to collections affect my security clearance? Screening process for potential new hires:OF) 306, Declaration for Federal Employment, to applicants in order to collect information about an applicants history, as an advance screening process. Show what youre doing to challenge the debt if youre sued or challenged over a debt you dont owe. Debt settlement, which may also be referred to as debt elimination or debt relief, is a field plagued with dishonest companies that may attempt to get you to pay large fees before settling. Thank you for your help. What is important is the underlying reason for the bankruptcy or credit counseling. While it is generally conceded that excessive debt is a cause for denying security clearances, no branch of the military has a set amount of debt that will result in being denied. There are many life situations that can cause debt, that are of not fault of the debtor. Retrieved from, Bushatz, A. However, I do have letters of settlement agreements that are within the last 7 years (the latest being January 2014). The issue with debt isnt really about the money itself. Seeking credit counseling from a non-profit agency, especially if the company can negotiate lower interest rates and better payment terms, Documenting all efforts to manage the problem, including names, dates and whatever other particulars were involved, Preparing a budgetthat is a realistic review of your finances and consistently reduces your debt, Making at least minimum payments to your creditors every month, Notifying security officers or your immediate commander that youre having financial problems and are seeking assistance to deal with them, Baldor, Lolita (2018, June 3) This is why the Pentagon is taking over security clearance checks. Standard Forms. Thank you. Responsible behavior in tackling your debt problems is considered a positive. A security clearance lawyer will also help prepare you for the questions that could arise during the application process and can help you to rebut or mitigate them. As of the first quarter of 2021, Americans were in debt to the tune of $14.64 trillion. Check out these stats: In short, individuals who have excessive and/or delinquent debt are seen to be a greater security risk than those who are more financially stable. William Henderson, who spent 35 years in the security and counterintelligence business before founding the Federal Clearance Assistance Service to advise people about preparing for a security clearance interview, recommends having a copy of your completed SF-86 at hand. A history of financial irresponsibility will be tightly scrutinized in the evaluation process. Credit repair: Why credit counseling may be a better answer Debt Settlement Debt settlement can be a third option for getting out of debt, but it not recommended for anyone who is concerned about risking their security clearance. I settled this debt as soon as I could, which was about 6 months ago but not for the full amount. I have also reduced or eliminated unneeded services to increase income in the household. Again, it comes down to a matter of trust. If youre willing to omit or mischaracterize events in your past, an investigator may be forced to conclude you do not measure up as someone who would be trustworthy with vital government information. Retrieved from, ONeill, C. (NA) Will Bankruptcy Affect My Military Security Clearance? The applicant was denied a security clearance because of his bad decision to prioritize other payments above his obligation to the taxes he owed. Once the account has grown to a certain amount, which can take months and sometimes up to a year, the debt settlement company calls your creditors and begins negotiating a settlement for each debt. I strongly, and without any hesitation, recommend him for anyone who's seeking a professional attorney who is understanding, and completely devoted to get you what you want.