An unexpected separation and divorce caused serious financial issues when my spouse refused to assist with the marital debt. These debts were all situated on credit cards that were unfortunately only under my name (I managed our budget and had the better credit history and score).
His departure was abrupt and unexpected while I was still searching for employment following graduation from law school. When the credit card accounts fell into delinquency, the financial hardship was extremely overwhelming. I was determined to find employment with a moderate to high-paying salary in order to address the debt and pursue any divorce proceeding. I did not file for bankruptcy; I wanted to pay off the debt. A couple of years later, struggling to land a good-paying job, and still dealing with the divorce/marital debt court proceeding, I am in the position of nearing a determination regarding his obligations with his share of the marital debt.
Simultaneously, I’m nearing the beginning of a security clearance investigation, and I’m trying to remedy the situation as best as I can. In retrospect, bankruptcy might have been a better option, but I am determined to make the payments and see this through at this point. However, my plan has been to await the court determination before tampering with the debt in order to avoid confusion on what total is owed and use any funds that my spouse is ordered to pay to address the debt. If the proceedings do not work out in my favor, which is unlikely, I am prepared to then address the debt through negotiated payment arrangements.
Will this effort/plan be sufficient to demonstrate my ability to handle this financial problem that arose due to a situation out of my control (my credit history prior to his departure was flawless)?
What do you mean by that? Correct me if I am mistaken, you plan not to take care of the debt until a judge decides on what to do with the debt? Is there a reason for that?
Regardless, I am not sure if this will sit well with adjudicators. I would advise you to look up the Adjudicative Desktop Reference on this. Also, you should consider legal means to take care of the debt (ie: consolidation, payment plan, bankruptcy, etc.). I certainly would not advise you to be reactive on this because finance is among the top reasons, if not… the number one reason for security clearance denial and revocation.
Also, I suggest you to search this forum a bit to glean some useful information. Also, @EdFarmerIII will probably be a good person to ask on this.
You have a divorce attorney? Is that attorney helping you with the distribution of debt in your settlement? If so, has he advised to you wait for the divorce settlement before arranging to address the debt?
If that, or something like it, is what is going on, you are NOT ignoring your debt and you are following the advice of your attorney on how to address it. It might be a difficult case but you should be OK.
That being said, I suspect your clearance to take longer than your divorce and you will need to get on the debt as soon as the settlement in final. In the meantime, get some financial training, something like Dave Ramsey’s Financial Peace or some other counseling even if you don’t think that you actually need it. It will look good to the adjudicators.
Unless there is a court order, I would advise you to seek opinion from a security clearance attorney if you are following the divorce attorney’s advice. If my memory serves me correctly, there was a case which an applicant was denied clearance because the applicant was following an attorney advice regarding to student loan debt. The attorney advised the applicant to “wait” on repayment f student loans and repaying other debts. Moral of the story: consult a security clearance attorney and be proactive with your debt.
(Thanks so much for the helpful insight) I’ve had conflicting information on the situation for some time, but, yes, an attorney suggested at one time that addressing the debt before a divorce settlement would cause confusion as to how much was owed by the other party and would affect determination on the total he owed.
However, my career has always been of extreme importance to me, and it sounds like this particular situation will not be as clear-cut as I’d hoped. Are you saying that the clearance will take longer than the divorce because adjudicators would want to see the outcome of the divorce (specifically, whether I receive the amount owed from my spouse) before authorizing my clearance, or were just implying that the existence of the debt itself, regardless of what I do to handle it, will prolong the clearance period?
If I approach my attorney to revisit this issue, see about documenting the exact amounts through various means, and get the green light from him to go ahead and begin addressing the debt, would going to a credit counseling/debt settlement group to arrange a plan with my debt be a way to ensure I get my clearance? The investigation will begin soon, and I’m willing to approach it this way asap, if it will improve my chances. Will they be hesitant to clear if my attempts began right before the clearance investigation? I, of course, would be ready provide all the background information if asked.
In this case, there is a dispute over the who actually owes the debt. Is it the applicant’s debt or is it marital debt which would make it a matter for the divorce settlement. I believe that, while in dispute, this meets the standards for the mitigating factors listed in Guideline F. The applicant is not ignoring the debt but is actually in court working to resolve it.
Remember, the debt is not the issue so much as what the applicant is doing about it.
However, I agree that it is NEVER a bed idea to consult a clearance attorney as most will offer a free consult.
Although your question was for Ed, I would like to jump in on this. This question is tough, but… I don’t think adjudicators will wait for the outcome of your divorce proceeding to make a decision. By not taking care of this debt, it will probably take your security clearance longer @EdFarmerIII said.
If you want to get this moving, I would suggest you to start taking care of it now. Taking financial course(s) that Ed suggested. Make payments… etc… I am pretty confident that a security clearance attorney will tell you this (but of course… do consult them). By the time adjudicator reviews your case, the adjudicator will see that you are responsible and working on resolving the debt which is always good.
As for your divorce attorney’s advice, I guess it is time for the attorney to earn his/her money. I cannot imagine how paying off debts can be legally detrimental to you. Again, if you receive a court order that states that you cannot pay your debts, then complies.
I expect the clearance to take longer because clearances are currently taking longer than most divorces.
Here’s the reason that it could be detrimental to her, financially, to start paying the debts. If the debts are determined to be marital assets (negatively valued assets are still assets) they may be split at the end of the divorce. Anything that she pays now may be an admission that the debt is hers OR may reduce the amount of debt that is split at the end. This would mean that she is paying off debt that her husband should have contributed paying.
All of the varies by state which is why she should consult with her divorce attorney.
I am also still convinced that an adjudicator will not see this as if she is ignoring her debt OR being irresponsible.
One option MIGHT be to start making payments into an escrow account with her attorney in order to build a fund that will be immediately applied to HER debt at the end of the process.
@AWoodhull . . . I usually agree with you 100% but I think that you are missing a portion of the issue on this one.
As with most things of this type, it varies state to state. It could also depend on other factors. Did he have card on the account? Was an “authorized user”? What type of purchases were made with the card?
Life circumstances (divorce), addressing the debt through legal means (court proceedings), and clean previous financial history are in your favor. However, you are responsible for incurring the debts (even though it may have been your husband) and why they are delinquent. As suggested by others, if you are serious about obtaining a security clearance read the mitigating factors for financial issues and don’t rely on a divorce attorney to help you through it, as they are only interested in the divorce part and may not be savvy about the security clearance process. And always document communications and efforts on your part to address the debts,
Good advice above! Get in repayment agreements, challenge any debt you feel isn’t yours, but communicate with and make minimum payments as you are able. Addressed debt vs unaddressed debt is the issue. I understand not wanting to throw money at debt you feel may be given to him. However, with your name on the cards, I think it is your debt. It shows up on your credit report. So control what you can, address all that is there while still pursuing the settlement. If you get stuck with it all, you haven’t lost anything. If the judge gives a percent to the ex…outstanding. Less for you to make good on. But showing an active effort to address debt is hugely favorable for your clearance consideration.