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Bankruptcy Usually Has Little Effect on Military Security Clearances

Soldiers in the U.S. military are often debtors too, and sometimes they need to file New York bankruptcy to get a fresh start. Occasionally the biggest problem for them is filing bankruptcy in the country where they’re stationed. Other times the question is how a bankruptcy filing will affect soldiers’ security clearances, which are crucial for keeping their jobs. The good news is that for the most part, bankruptcy has little effect on military security clearances. The reason is that like credit reporting bureaus, the military treats filing bankruptcy as an act of taking control of one’s finances as opposed to defaulting on large debts.

In a Q&A article in the Navy Times, the lawyer-columnist gives a more cautious assessment of a soldier-debtor’s security clearance status when a bankruptcy is involved. Although it’s certain that a bankruptcy filing won’t be ignored by military authorities, on its own it won’t disqualify someone from obtaining a higher security level. The military investigates soldiers’ entire backgrounds and makes its decisions on a case-by-case basis. In fact, usually it’s the reason the soldier amassed so much debt in the first place—not the bankruptcy itself—that results in a denial of security clearance. For instance, foreclosure on a home is more forgivable than discharging gambling debts.

A few other factors affect the military’s decision to award or rescind a soldier’s security clearance:

  • When the bankruptcy occurred. The further in the past the filing was the better.
  • How the soldier went about resolving the debt problem. At issue is how the soldier’s efforts reflect his or her maturity and responsibility for dealing with such problems.

Soldiers who are honest and accurate in their applications will fare well obtaining military security clearances. Evidence that they mitigated financial problems, such as by filing bankruptcy appropriately, presents evidence of good character to superior officers.

You can read the full article in the Navy Times here.

If you are in the U.S. armed forces and you are encountering a debt problem, it’s important to talk to an experienced New York bankruptcy lawyer to ensure that your bankruptcy is handled properly and goes smoothly.

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney Brooklyn NY Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA

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