Those that work for the federal government that require a certain level of security clearance must have an attitude of trustworthiness in keeping classified information. In demonstrating their dependability and high regard for honesty, they have to keep a detailed record of all their finances. This includes financial records, debts, any unexplained spending and many other aspects. Concerns arise when people with security clearance of any kind have issues either with an inability to satisfy their debts, thoughtless spending that has led them to financial problems or any illegal actions they have taken in the financial realm. This is due to the idea that people who may be in tight financial situations are much more likely to cave in to methods of bribery in exchange for classified intelligence. Therein lies the major issue.

In the state of Virginia, which is home to the CIA and not far from Washington D.C., there are numerous federal government employees that must apply for or maintain their level of security clearance in order to retain their job. Even a member of the armed forces or a non-government employee working on a project for the Department of Homeland Security, FBI or other government agency has to be able to qualify for and keep their level of clearance.


According to the Defense Office of Hearing and Appeals (DOHA) in 2007, nearly half of all security clearance denials had to do with some sort of "Financial Consideration." If delinquent debts show up on a person's record, their ability to maintain clearance depends on the following factors:

  • What is their level of security clearance?
  • What caused the debt?
  • How much do they owe?
  • Were there extenuating circumstances beyond their control that affected their ability to live within their means? (ie: health emergencies, divorce, etc.)
  • Have they done anything to resolve the debt?

Retaining a qualified bankruptcy lawyer could fall under the last category, as it is seen as a way of working to settle debts and move forward. In essence, they want to see that there are actions being taken to get rid of the delinquent financial history. By filing for Chapter 7 or Chapter 13 bankruptcy, it can be seen as a responsible method for settling debts. The civilian clearance and military security investigations services have both approved bankruptcy as a way of debt resolution. It is better to show that actions are being taken to put an end to the debt than to leave it unresolved. Bankruptcy could also remove any suspicion the government would otherwise have against them, thereby dismissing any obstacles between them and their level of security clearance.


For many, denial of their security clearance could mean losing their source of income entirely. If you are facing the security clearance adjudication process, be sure that your finances are in order and speak with a Virginia Beach bankruptcy attorney as soon as possible. While this is not the only aspect of a person's lifestyle that is considered when determining clearance, it is a significant factor. Having your debts paid or at least in the process of resolution could be the deciding factor for you.

Having helped over 17,000 individuals with the bankruptcy process since our firm's beginnings in 1996, the David McCormick Law Group is committed to each of our clients' success. We work personally with each case, providing a level of understanding that allows them to feel secure knowing their financial future is in exemplary hands. Call our office today for a free consultation at (757) 918-8365 to learn more.

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