Ask the Lawyer: Financial trouble can block path to security clearance - Military Law, Military Law Advice, Ask a Lawyer - Navy Times

Ask the Lawyer: Financial trouble can block path to security clearance

Lawyer Mathew B. Tully answers your questions.

Q. Will filing for bankruptcy have an impact on my ability to obtain a security clearance?

A. Yes. Depending on the security clearance level you’re applying for, bankruptcy can negatively affect your application. The good news is that filing for bankruptcy alone is not a reason for clearance to be denied.

As reverberations from the economic recession continue, I think more and more security clearance applicants are going to have financial mishaps in their background.

But every application is considered on a case-by-case basis, and the applicant’s character should be considered as a whole. For example, an applicant with a background that includes bankruptcy would be asked what led to the financial hardship and what he is doing to correct the behavior. Often, it is not the action (bankruptcy) that hurts an applicant, but the situation surrounding it (running up a credit card tab gambling in Vegas, for example).

Certain conditions could mitigate or resolve the financial concern:

• It happened a long time ago. Something you did as a teenager but hasn’t happened since could be seen as unlikely to ever happen again.

• You couldn’t help it. For example, you or your spouse were laid off and tried your best to stay afloat.

• You fixed the problem or are seeking help to do so. It’s important to show that you are responsible and trying to resolve the issue.

• You proved your past-due debt wasn’t legitimate and took care of it.

The most important advice I can give to security clearance applicants is what we call the “HAM Principles”: honesty, accuracy and mitigation.

Honesty is the bedrock of a security clearance status; if you can’t be trusted, the government doesn’t want you anywhere near confidential information. If you have something in your background that you know is questionable, it’s better to be up front about it than to appear evasive or dishonest.

Accuracy is just as important. Any inaccuracies, on an application or in an interview, will need to be explained.

Finally, if you have problems in your background such as bankruptcy, often they can be explained, or mitigated, during the appeals process based on the conditions mentioned above.

Once a security clearance is approved, holders need to remain financially responsible. Holders who experience financial hardships should seek professional guidance right away.

If you’re concerned about something in your background, contact an attorney who is experienced with security clearance cases. If your application has been denied, an experienced attorney can help you in the appeals process.

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Mathew B. Tully is an Iraq war veteran and founding partner of the law firm Tully Rinckey PLLC. E-mail questions to askthelawyer@militarytimes.com. The information in this column is not intended as legal advice.