What To Do If You Have Delinquent Debt

Employers | Quick Registration | Contact Us

Article Comments | Add Your Comments | Recommend Article | In the News

William H. Henderson for ClearanceJobs.com - April 28, 2009

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.

Average (Not Rated)

You must be logged in to recommend articles.

Comments


	Make an effort to clear up all your credit issues you can before and after submission for a security clearance and document everything. Maintain all of the receipts you can for payments and payoffs. If you choose to dispute debts, make sure you get some sort of reply to your dispute from the creditor if possible. An undated, unsigned letter to a creditor disputing a debt may not be enought to mitigate your credit issue with that creditor. Keep all documentation about any home loan modifications, short sales and deeds in lieu of foreclosure especially if the debt has been resolved.

Anonymous Helper on September 29, 2011 at 9:23pm


	I am working for a contractor with ICE and understand I must have a background check. Not having ever worked in any position in connection with the Fed govt, I am just learning about this process. I am not sure of the type of clearance that I am required to have but know that I must fill out a form through e-quip. Will the IRS be part of this investigation? We owe back taxes but there is no lien or other formal proceeding in place at the moment, nor has it been. We are working with an attorney to make a repayment plan. So nothing will show on credit report but do they run your name through a data base of the IRS?

ag (okalahoma) on July 22, 2011 at 2:48pm


	I have interviewed for a job with the Navy that requires a Secret Security Clearance. I was laid off in Feb of 2011 and then ended up having surgery for an injury I sustained while I was in active duty in the Army (I am no longer active). It has been 3 months since my surgery and the VA still has not paid me for my temporary total disability for the 4 months of recovery. As a result, I have been unable to pay credit card debt and have missed some payments on my mortgage. Once I receive the money from the VA I will be able to get caught up. Prior to this I had excellant credit. Will I be able to get this clearance?

AYoung (Knoxville, TN) on July 2, 2011 at 10:20am


	Im in the process to get hired as a civilian contractor to go over iraq with KBR, I have to fill the SF-86 form, my question is how deep do they look into the credit history, I have a couple of negative items, no more than 1 grand. Please if you have any comments let me know.

rodrigo (brownsville) on April 26, 2011 at 4:58pm


	Contract Counselor (San Diego): For the Navy all completed background investigations are sent to the Department of the Navy Central Adjudication Facility (DoNCAF). If there is potentially disqualifying information and the case is for a CAC only, DoNCAF will not make a decision, hence �undetermined.� They send the investigative file to the HR or security office of the Navy facility or activity that requested the investigation and the case is supposed to be adjudicated there.

William Henderson on March 31, 2011 at 11:16pm


	Hired for a government contract company a few months ago. My position is non-sensitive and completed a SF-85. Have a lot of debt from the past 4 years only (short-sale on a house, self-employed with little work, unemployment, medical problems and resulting credit card debt to try to stay afloat). Prior to that my credit was excellent, for at least 15 years. I knew that my debt may be a deal breaker with getting my CAC, but was hoping I would be OK due to my non-sensitive position. In January I found out I was reviewed but it was "undetermined," what does that mean? Does this mean they're going to review me again to see if I've been making payments? No one has contacted me directly, that was the information my supervisor was able to find out.

Contract Counselor (San Diego) on March 23, 2011 at 8:08am


	I filed bankruptcy in April 2008, and was discharge under chapter 7 July 2008. I completed my SF_86 June 2009 and as of today 22 Dec 2010 I have yet to hear back. I've had a secret clearance since June 1987. My credit now is very good I purchased a home in July 2010. How long does the renewal process take?

lee a (ccafs) on December 22, 2010 at 8:15pm


	I am in need of a secret clearance however I have a lot of debt about 14k worth. I have talked to a credit counseling company and the said if I start the program they will supply me a letter to show that I am enrolled and paying my debt back. Will that letter help me get the clearance and if not what can i do.

DEBO (NC) on June 19, 2010 at 3:28pm


	Husband is active army he has just a interm...i found the paperwork...he now has 4 kids...not one with me...owes alot of backed child support to two states and hasn't work on two others...terrible credit...he needs a secret clearence for his new MOS...is he going to get it? I doubt it he had mental illness and i believe he lied on his background app. as well as his interview.

April Cook (Ft Carson,Co.) on April 29, 2010 at 4:54am


	I'm currently applying for a position that requires security clearance. I've been caught up in a financial crisis since I lost my job in august 2007. I tried to find another job but was difficult because I was late dates of pregnancy. I tried to do minimums payments but my creditors demand a full payments. I know this is my debt and I am in the best position to paid back this but how I can paid back if nobody give me the opportunity.What are my chances to getting the security clearance.

Lulu (Virginia) on April 25, 2010 at 3:53pm


	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!

Frank (Los Angeles) on March 6, 2010 at 7:35pm


	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?

Lee (Arizona) on February 3, 2010 at 10:40am


	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.

Brenda (Maryland) on November 24, 2009 at 9:35pm


	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.

Bill L. (Annapolis, MD) on October 15, 2009 at 8:07am


	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?

Hazera (Northern Virginia) on October 14, 2009 at 12:31pm


	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.

FCIP Applicant (South West) on October 11, 2009 at 9:40pm


	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?

F. Mitchell (Arlington) on January 5, 2009 at 12:03pm


	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?

pdidi20 on November 16, 2008 at 7:32pm


	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.

Eric (Cedar Rapids, IA) on August 14, 2008 at 8:19am


	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.

eric roth (palm bay) on August 13, 2008 at 10:40pm


	Attempting to get all that I have, taken care of. Hard to do when don't make enough to do it.

Sharon Wolf (Arvada Colorado) on June 23, 2008 at 2:40pm