Clearing financial issues without an attorney


#1

We went through some severe financial strife while I was unemployed and shortly after a serious (and expensive) medical diagnosis for my wife. We retained an attorney to consider a chapter filing, but we’ve actually been able to work through a lot of our issues directly with creditors (mortgage reorganized, lenders are working with us on our other debts, etc). But from the outside looking in, it’s still a real shambles. My credit report is just a wreck, and probably will be for a while. I’m a career clearance holder (30 years), but terrified that an investigator will see our situation and just shoot me on the spot. Does the chapter filing make it more, or less likely that my PRI will go badly?


#2

What matters is how you got in debt and what you are doing about it. If bankruptcy is your best option, it’s your best option AND it’s a legal way to address your debts. You have valid mitigating factors on how you got there. Make sure you have excellent notes and documentation on the agreements you are making with creditors and the payments that you have been making. You have the major one over the hurdle by getting your mortgage under control.

Now . . . Your other risk, it seems to me, is that you should have been talking to your SFO when this started. I know that sounds counter productive but as a 30 year clearance holder, they may think that you should have known better.


#3

Understood, and you’re right. I was actually in the middle of that with my recent employer (had just watched annual training and it jolted me), and then got a layoff notice before it was resolved. On the mitigating factors, all true, every single item is legitimate, and we’re powering through the issues, one painful debt at a time. I can only pray that an investigator will see that we’ve taken responsible steps to putting things behind us (it’ll be easier when I’m employed again, of course). But we did take a series of steps (sold our rental property, cleaned out my retirement accounts) to prevent a complete collapse, which for the most part have worked. Thanks again.


#4

Remember . . . It’s NOT the investigator but the adjudicator that has to see what you are doing. This is why documentation and your ability to present facts I a written manner (do people do that anymore?) are so important. What you give the investigator will be passed to the adjudicator.


#5

It’s good to know that we aren’t doomed by our misfortune. Thanks again for the feedback!


#6

For what it’s worth, I’ve also spoken with fellow high-level clearance holders, some of whom were in much worse condition (foreclosed mortgages, etc) financially, who managed to get through it and still maintain their clearances. The key, they tell me, is laying the cards, however embarrassing, out on the table.