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| What To Do If You Have Delinquent Debt |
William H. Henderson for ClearanceJobs.com - April 28, 2008
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1. Start correcting the problem immediately, document all efforts, and keep a chronology of activities.
2. Get credit reports from all three national credit reporting companies and use the reports to make a list of all your creditors, but understand its limits. Things that sometimes don’t show up on a credit report including unpaid alimony, tax delinquencies, automobile leases, and some other debts. Occasionally erroneous and duplicate information appears on a report. Although the clearance application form (SF86) only asks for 7 year’s worth of financial information; adjudicators may consider all financial information available to them, including financial information collected by field investigators from court records, rental/utility records, personal references, real estate records, and employment records that does not appear on a credit report.
3. Immediately take action to dispute any erroneous information on the credit report.
4. Make at least minimum regular monthly payments to all creditors.
5. Contact those creditors that have unpaid claims against you, insure that the claims are legitimate, and set up a repayment schedule as soon as possible. Try to communicate in writing and keep copies of all correspondence. If you communicate by telephone, make a written record of the telephone call and include the date, name of the person you spoke to, and a gist of the conversation.
6. Seek credit counseling if necessary, preferably with organizations that is a member of the National Foundation for Credit Counseling. They may be able to negotiate better repayment terms and lower interest rates than you are able to obtain by yourself.
7. Don’t be afraid of bankruptcy, if your situation warrants it. If you seek the services of a reputable credit counseling service first, they will advise you whether your situation can be resolved better through bankruptcy or debt consolidation.
William H. Henderson is a retire security investigator, author of Security Clearance Manual: How To Reduce The Time It Take To Get Your Government Clearance, and regular contributor to ClearanceJobsBlog.com.
Copyright © 2008 by Last Post Publishing. All rights reserved.
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| Frank (Los Angeles) |
on 06 Mar 2010 at 7:35 pm |
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Yet another strategic default question. I would also love your opinion. I currently hold clearances. My husband and I are considering a strategic default on our home since we are 40% underwater in Southern California. I am not listed on the loan or title. Could my husband's foreclosure in any way affect my security clearances and/or is there a need for me to report it to my FSO?
Thank you! |
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| Lee (Arizona) |
on 03 Feb 2010 at 10:40 am |
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This is an odd situation, but I'd love your opinion. I was divorced last year. I'm currently applying for a position that requires top secret clearance. I have excellent credit and no other issues that might impact my security clearance.
My former spouse also has excellent credit (but shouldn't matter to my security clearance). Like many people, we were significantly "upside-down" on our mortgage at the time of divorce so we were unable to sell the property, refinance the property or remove my name from the debt.
The divorce decree granted my former spouse the house (and responsibility to pay expenses on the house). However, the mortgage company continues list me as a co-borrower.
My former spouse may need to relocate and he is considering a strategic default on the mortgage since the bank won't accept a short sale and, honestly, I seriously doubt a buyer could be found in a short time in Phoenix.
Renting out the property isn't really an option because, thanks to dozens of foreclosures in the neighborhood, current rents are going for less than 1/3 the existing mortgage payment amount. Naturally this will hurt his credit somewhat and it will also impact mine. But would this strange situation be bad enough to stop my security clearance?
What do you think? |
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| Brenda (Maryland) |
on 24 Nov 2009 at 9:35 pm |
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| I was in the same credit crunch situation. I was overwhelmed with bills. Some I made on my own, others I co-signed for other people who later defaulted. I have had a TS/SCI for more than 20 years. I applied to a company and got hired but my clearance was on "hold" because of the delinquent debt. I had to show that I was attempting to make regular payments. I retired from one job and took the "lump retirement money" and paid every bill that I had...and I do mean every. I had to send bank statements to Contractor Clearances to show the bills were debted out of the account. Bills that were Western Union "Quick pay" also had to be on the bank statement since I used a debit card for all the transactions. The toltals had to match and they did. However, even after the all the proof of payments, the next step was ajudication and that took a month. Needless to say, I still have my clearance but the company that hired me hired someone else because adjudication was taking too long. I am debt free but with no job. Now I have to start looking again. By the way, I did get the Okay doke that my clearance was good to go. Contractor Clearances let me know that I had not been denied anything. They just wanted the "mess" cleaned up. I did not have to pay all of them off, but since I came into the money, I decided to. |
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| Bill L. (Annapolis, MD) |
on 15 Oct 2009 at 8:07 am |
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Hazera (Northern Virginia)
If you are applying as a DoD contractor, I doubt that you will get an interim clearance. Other federal agencies apply interim determinations a little differently. In the long run, adjudicators are trained to look at all available information, including reasons for the situation people find themselves in. During the investigative portion of the process, you will be interviewed about information appearing on your credit report and certain answers on your SF 86/eQIP at which time you can give an explanation for how you got into the situation of a defaulted mortgage. Reasons that were beyond your control (catastrophic illness, divorce, unexpected loss of employment, etc) are looked at as mitigating the concern. Additionally, your efforts to unencumber yourself of the property/debt show a good faith effort. Good luck. |
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| Hazera (Northern Virginia) |
on 14 Oct 2009 at 12:31 pm |
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| I have been offered employment that requires interim security clearance. I had an interim clearance that now has been archived due to inactivity within 24 months. The only change from my initial archived interim clearance to now is that I have been default on mortgage payment for one property that is undergoing short sale and we hope to reach settlement in about a month. I was requested to complete an SF86 again. I want to complete this after the settlement of the house. What are my chances of having a security clearance approved based on my credit after settlement? |
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| FCIP Applicant (South West) |
on 11 Oct 2009 at 9:40 pm |
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| Very good information Bill. My USMS BI was completed and turned in by my BI the third week of August. According to this info, I should be getting a follow up phone call since my BK was with in the last two years?? Other than this situation that was very much out of my control, my record is perfect. Do you think my BI investigator documented everything well enough that they might not even have to contact me? I spoke with the BI once everything was done and was told "I think you will be fine." But it was followed by "Now that's just my opinion." How much does the board weigh the report from the BI? Sorry so many questions, just REALLY want this job. Thank you. |
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| F. Mitchell (Arlington) |
on 05 Jan 2009 at 12:03 pm |
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| I have an ex-husband that was deported for a crime he committed before we were married. I was not aware of. I filed bankruptcy in 2003 but have since cleaned my credit with the purchase of a car and two credit cards but after losing my job for three months the cc went into default but have since cleaned that up as well. I am currently in the middle of a SC but was denied an interim. What are the possibilites in reciving a clearance? |
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| pdidi20 |
on 16 Nov 2008 at 7:32 pm |
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| I have been offered a Job that requires a secret clearance. I have 2 issues. I was arrested but not convicted back in 2001 for a DUI. I recived a PBJ, and to take a 18 hr alcohol education course. The second thing is I was fired from my previous job. I recieved a text message on my personal cell phone then I forwarded to another co-worker, thta co-worker forwarded it to another co-worker, that co-worker forwarded to another co-worker who deemed it inapproipate while at the workplace and reported to supervision. I was employed there for 8.5 years, had a backround investigation through the company and was selected back in the Marine corps to be in the Personal Reliabilty Program while stationed at a Nuclear Submarine base. I am in the process of filing a lawsuit for wrongful termination. What do you think my chances are of getting my Interim secret and then my final clearance. My former company has a policy that wont allow them to disclose why I left the company, they can only say my dates and my position while employed. My former supervisors knew that I recieved a raw deal and are helping me out in every way they can. I disclosed all this info on my SF-86. What are my chances? |
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| Eric (Cedar Rapids, IA) |
on 14 Aug 2008 at 8:19 am |
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| I'd try to ask your question over at www.clearancejobsblog.com. They do a lot of Q&A security clearance sessions over there. The have some current/former security investigators that could shed some light on your situation. |
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| eric roth (palm bay) |
on 13 Aug 2008 at 10:40 pm |
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| I had a DUI in 2004, only 2nd degree misdemeanor. Now have a regular license and had that since 2006. Had a couple of incidents with domestic violence with ex-wife, I was never arrested, just asked to leave. I've been caught up in a financial crisis since I lost my job in august 2007. Now I have to file for bankruptcy, but hasn't been through the court system yet. My credit score was 650 back in 2007, but since has done a nose dive. I will have to go for security clearance for a job over seas in September. ? Of course I plan on being completely honest, but what are my chances of getting a secret clearance. |
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| Sharon Wolf (Arvada Colorado) |
on 23 Jun 2008 at 2:40 pm |
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| Attempting to get all that I have, taken care of. Hard to do when don't make enough to do it. |
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