Credit Issues of my own doing

Since NDR is setting less than what I owe … I am having to pay taxes on the difference s. Meaning the amount I did not pay is added as income earned that I did not pay taxes on. But it I what it is.

The creditors are giving you 1099-C’s, not 1099-R’s. I recommend having your taxes done by a professional as the imputed income on a 1099-C can be dismissed under some circumstances. You can file out a personnal balance sheet, listing your assets and debts on the date listed on the 1099. If your liabilites exceed your assets, the forgiven debt will not be counted as income.

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I have a similar situation. Only in my case, I have held a secret clearance since 2001, with a reinvestigation performed in 2011, then I retired from AD in 2014 and went straight to work for a Navy contractor. I changed jobs in 2016 to another Navy contractor. I am now up for a periodic review. In late 2017, I had a real estate deal go horribly wrong and lost all of my equity in the project which led me down a path toward debt settlement. I chose a different company but similar sized debt. None of the debts are settled yet, and my settlement company told me to expect about 36 months from start to finish. I have been paying 1382 per month to fund a settlement escrow account and pay legal fees.

My actual question is: regarding listing the affected accounts, two are in my wife’s name only. I am NOT a guarantor or co-signor in any respect and they do not appear on any of my three credit reports (but do appear on hers), but those accounts are enrolled in the same settlement program with mine. Do I list these accounts as well?

I expect a brutal interview, and have been advised to expect an SOR in the near future. What should I expect in terms of the timeframe for actually losing eligibility? I mean, do I get to appeal any decisions before being fired from my job?

You need to provide more details to us. why, when, and how did you get into the debt? How much is the debt? Have you exhausted all avenues to pay the debts? What plans do you have to pay the debts etc. Why do you assume your interview will be brutal? Why do you expect an SOR? Do you have any other issues? Have you consulted with an attorney, credit counseling, bankruptcy?

How long did it take?

I accepted my job on Aug 10, 2018. I submitted my sf86 on Aug 20, 2018. I was denied my interim clearance on Sept 25, 2018. I had my first interview with background investigator on Nov 8, 2018 (I think but two weeks before Thanksgiving). I had follow up questions with the background investigator by phone in Late Dec 2018 or early Jan 2019. Then I got a form from DoD adjuncator to fill out to answer questions about my debt and other issues in early March 2019. On March 27, 2019 I received my full clearance. I also was told from my security team that someone maybe contact before my 5 years clearance needs to be reviewed to make sure I am still paying the debt down. I also know that starting the debt consolidation program 2 years earlier helped. I did have to wait a long time (7 months). I hope this helps …

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I wanted to add something here… I recently came across National Adjudicative Guidelines, which ODNI revised dated 8 JUN 2017 (

There was a change. Under Guideline F, adhering to good faith-effort to pay or resolve is considered a mitigating factor. I didn’t previously know that when I gave advice. While I stand by the advice, I did not take into consideration the “new” mitigating factor. I thought I should share this with you.


Thank you so much for your help!

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Dude01 how much money if anything did you save after going through this debt pay off process? How many points did your credit score drop? What was the effect on your clearance?

So I had a clearance 7 years ago that lapsed so I had to go through the process from the beginning. It took me me 7 months to get a final TS/SCI from when I turned on my sf86 forms. In the process which I actually started two years prior to when I accepted this job. I saved about 30K. I also have a house that from the sell of my house (which just sold) I will pay NDR so that they sell everything. My credit score rent from 731 to a low of 601. My score is currently 652 with 17K to still settle which by August they will settle. I am also know once my house is off my credit then my score will drop slightly. So I do not know what it will be after August.

Ok I’m confused by all that. You have the clearance and cleared job now?

Does anyone know if it’s better to use the credit counseling service that negotiates debt write offs vs a bankruptcy?

I know someone (pre continuous monitoring) that got his clearance, went bankrupt and kept clearance. Will he lose it at next investigation? Also with continuous monitoring would he lose it immediately?

Worst case get a non clearance job, maybe get training for additional job skills, build your credit back up , pay off bills , let time pass and then start again. There are people like clearance lawyers that consult on these matters but they charge hefty fees. I wish you the best.

I have the clearance as of the end of March 2019. In 2010 I had a clearance that lapsed so I had to start over in getting a clearance. I start my new job in two weeks which I needed the clearance for.

The important point to remember about CE is that the issues CE keys on are normally issues that are required to be self-reported. The guy with the bankruptcy after being adjudicated needs to have reported that bankruptcy.

Not reporting the bankruptcy is a more serious issue than the bankruptcy itself.

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A 652 is a fair credit score so I don’t think that will hurt. People fall into holes along the way. Those working to dig themselves out…are lower risk candidates. A bankruptcy in and of itself will not prevent a clearance. Not reporting it, as BI stated…WILL hurt you. Paying off the debt puts you into a better position than bankruptcy, but at times bankruptcy is the correct choice to save a clearance.

My reason of doing it was I had to much money going out for bills. And I got credit cards to pay for other credit cards and I kept just digging myself a hole and not able to save. I was making good money so I could have paid the monthly bills but I was not saving anything. This way I was able to save about $500 a month to when I had my interview with background investigator, I had printed out bank statements with my savings and printed statements what I was/am paying debt consolidation program

So you had the money…you just weren’t paying the money? Yet you allowed late charges, excess interest, etc build up? I would recommend limiting the savings and paying the bills myself. Plenty of way sto do this. One way is to line them up on an excell spreadsheet from highest to lowest interest rate and pound away on high interest items, or list from biggest to smallest bill, get all into payment plans, and when you knock out the bottom one, roll that payment up into the next one, and so forth until you get some synergy going it seem slow but once you start wiping out debts, sometimes 2 and 3 in one month, then roll up…you can really get cooking on making ever larger payments against the debt.

I did the debt consolidation program which requires you to stop paying so they can negotiate the best price once they go delinquent. I also at the time I did not have anything really saved and now I do. So difference is that I was leaving pay check to paycheck now I am not so the debt consolidation program really fit my needs at the time …

I know this is a old post but absolutely awesome to hear. Comgrats

Wow, seems like the same situation I am currently in.

I let credit cards bills get the better of me. Trying to use them to stay a float due to a string of major car repairs and such. Ended up having about 10k in charge offs and collections. So what I did was and currently doing) is working with a credit repair company to make sure anything that is working on my report is fixed (late payment dates, incorrect balances, etc) and I am also working with a debt settlement company (Freedom Debt Relief) to pay back my creditors.
Also the few cards that I still have I am no longer using and just have them on auto pay over the min.
Lastly in order to make Freedom Debt Relief work I got 2 part-time jobs in addition to working full-time so I can quicken the pay off time. I always wanted to do something like that but needed the extra income to make it happen.
Sucks how I go there because I was watching it happen but refused any help. Girlfriend at the time currently wife offered but being macho or stupid I refused any help. Now I make more (which will be way less than what I will be making if I get hired with the clearance), AND I have my wife’s income along with my own which I did not have before. Now we can save, are never tight month to month and I am paying my back bills.
Sucks because I am working like a dog but I know its not forever (Settlement over 2022) and I will be debt free then and hopefully with a nice TS clearance and new career to boot.

Sounds like you are on track. Keep it up. Cancel the cards if you can to remove any temptation. Not required just some advice