For the hundreds of Floridians whose employment with NASA, Lockheed Martin or other government agency or contractor in Central Florida depends on an active security clearance, fighting a Florida foreclosure may mean more than saving your house. It may also mean saving your job.
Although no specific reports tie the number of denied or revoked security clearances to the current mortgage crisis, federal officials have noted an increase in both for purely financial reasons, including foreclosure.
Why is a Security Clearance Related to Personal Finances?
There are more than dozen criteria examined in when granting or revoking a security clearance; debt is one of them. When an applicant for a security clearance has substantial debt problems, that person could potentially sell confidential government information to generate additional income.
The mere existence of a foreclosure on your credit report does not guarantee that an existing security clearance will be revoked or a new request will be denied. Examiners may consider factors surrounding both the purchase of the home–whether the purchase itself overextended the borrower at the time of sale–as well as the mortgage status throughout repayment and eventually foreclosure–did the borrower take steps, such as pursuing a loan modification or short sale, to change or end the financial obligation.
Bankruptcy and Your Security Clearance
A bankruptcy on your credit history may also affect your ability to obtain or maintain a security clearance. However, as with foreclosure, the circumstances surrounding your bankruptcy will be examined to determine what impact, if any, it will have on your security clearance.
For example, if the bankruptcy resulted primarily from issues beyond your control, such as a large medical bill, it is less likely to impact security clearance. Bankruptcy may even be considered a positive method of dealing with existing debt through an established legal process.
Reporting a Foreclosure or Bankruptcy to Your Security Officer
There are no hard and fast timelines as to when you should report financial problems to your company or agency’s individual in charge of security clearances. However, withholding the information until the company performs its own periodic review of your finances can be dangerous. It’s better to take steps immediately to mitigate any potential issues with a security clearance, including discussing your foreclosure defense and bankruptcy options with a local attorney.
Once denied or revoked, it can take two or more years to reinstate a security clearance.
Source: Orlando Sentinel, “Foreclosures put workers’ security clearances at risk,” 6/6/2011