I accepted a job offer a couple weeks ago, requiring a clearance. Everything seemed to be going well until they started the pre “process” for the clearance
Admittedly, I entered a chap 13 bankruptcy recently.
This week, I received a phone call updating me on the status from HR, promptly saying they would have to rescind the offer due to “credit” issues per their security division. However, HR still wanted me to push thru and contact their security division.
Being as though I didn’t even fill out a SF-86 yet, something seemed a little off. Inaccurate in the very least.
When pressed and elevated to the Director, they informed me that: “Bankruptcies must be fully discharged/completed before applying for a clearance. The government will not process a clearance while a bankruptcy is still in process. We do not deny employment based on this, ONLY the ability to submit you for a security clearance”
Reading and researching, something is telling me this is NOT correct. I’ve read here and many places (including Section 522 of the code) that prohibits denial of a clearance solely based on a bankruptcy.
How is this, if I’ve never filled out a SF-86 for them?
Any advice?
A 13 will not discharge fast as you simply restructure the debt, but pay everyone (I believe). More important than the bankruptcy are the circumstances leading too and after. They don’t use FICO scores per say, but essentially the FICO is a direct result of your payment history. Ergo, a very low FICO…comes from a lousy repayment record. Filing a Chapter 13 means you somehow got upsidedown on payments, have a bad repayment situation ongoing…and rightfully will now have the FICO speaking to that. Once you file the 13, your FICO drops. Depending on how low yours already is, based on how long the financial situation was in trouble…tells a larger part of the story. However, I had an applicant in the middle of filing. I could not submit. In 6 months she was up to a 689 FICO. So depending on how quickly you get everything into a solid repayment plan with several payments on it…you may see a rebound credit score. Or not. Normally if the situation is explainable, it is understandable. But you have to get them to submit you first. This is a suitability denial issue. The company doesn’t think you will clear, so they do not want to submit. HR seems to want you…if the situation is very easy to explain, a well organized presentation of the facts may sway the company security folks to submit an SF86 with explanation. But just know the longer your financial situation ate you up in late payments, unaddressed debt, etc…this paints a picture for the investigators and adjudicators.
I don’t believe the line that bankruptcy must be completely discharged before an application will be processed. It’s far more likely that they realize that it will take you quite a while to get through the security process and they don’t want to wait that long. So, their policy is not to submit you until you have completed the process.
I seriously doubt that there is any government policy that prevents them from submitting anybody. But, they have experience that allows them to make some accurate determinations about who will/will not clear and what items extend the process. In your situation, you are certainly going to end up with a denial and an SOR, which you can probably beat on appeal but they don’t want to wait 18-24 months to get you on board.
When did you file the bankruptcy. That is an adjudication question and they can and will deny. The agency probably already knows that it will be denied that’s why it wasn’t submitted. But again, when did you file? Has there been enough time to mitigate the circumstances? If not, there lies your problem. Open issues will cause you to be denied
Seems more about suitability.
I know the company I worked at pulled credit, driving record, criminal, and employment records. I also had to do a release for education.
I had to pass those minimums before the job offer was extended. Then I had to do security.