Debt Can be a Job Killer if You Have Security Clearance

Delinquent debt is the primary reason people lose their security clearance, according to ClearanceJobs.com.

We’re addressing this topic today because this is the time of year when many people have a New Year’s resolution to pay off debt and get their finances under control. If you’re trying to get security clearance for a job, this is a resolution you don’t want to break.

It’s not that financial difficulties such as delinquent taxes mean your supervisor is going to walk into your office and hand you a pink slip; it’s a bit more insidious.

Financial considerations are among the 13 Adjudicative Guidelines for Determining Eligibility for Access to Classified Information. These are factors that can prevent you from obtaining or maintaining your security clearance.

“Because many government and government contractor jobs require clearance to perform your duties, your inability to keep your financial house in order can result in you winding up in the unemployment line,” says Catie Young, a security clearance lawyer in San Diego.

An internal government audit revealed that approximately 83,000 Department of Defense employees and contractors with security clearances to protect the country’s secrets had $730 million in delinquent federal tax debts as of June 2012, the most recent figures available at the time, CNN reported in July 2014. Of those, about 4,800 people “had IRS liens against their property, and about 23,000 of them were subject to wage garnishment and other collection tactics by the IRS to collect taxes owed.”

The report also cites “IRS data showing roughly 40 percent of these workers had a repayment plan for their debt, and a quarter of them were eligible for a top-secret clearance level,” according to an International Business Times article. That means they have access to some pretty important information.

Why is it the government’s business to know whether you’re a deadbeat debtor? The government is of the opinion that security clearance holders who fit into this category are at the greatest risk of being targeted by foreign intelligence agents.

“The rationale is that if you’re in a financial bind and someone offers you a significant sum of money to hand over secrets, you’re increasingly tempted to do so,” Young says. “Delinquent debt also raises the government’s concern that you might engage in other forms of illegal activity to make money.”

An inability or unwillingness to pay debt could indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, according to the Adjudicative Guidelines. All of these factors can cause the government to question whether you truly are reliable, trustworthy and capable of protecting sensitive information.

While debt delinquency can be cause for denial or revocation of your security clearance, there are mitigating circumstances that an attorney who specializes in security clearance law may successfully argue in your favor, Young says.

Let’s say your teenage child is involved in a serious car accident and sustains a brain injury. The medical costs exceed $1 million, you don’t have insurance, and you don’t have $1 million lying around to cover the costs. This likely would be a situation determined to be beyond your control, and it wouldn’t be used as a reason for denying your security clearance.

But let’s say you have a history of running up significant debt and you have filed bankruptcy twice to get out from under crippling credit card bills. That easily could show that you lack self-control and the ability to live within your means, and could be a financial situation that would be a barrier to obtaining security clearance.

Please call our office and schedule a consultation if you’ve applied for security clearance and you’re worried your financial situation may prevent you from being approved. We can evaluate your situation and recommend how to proceed.