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Legal Insider: Tips to Minimize Risk of Losing Security Clearance Based on Financial Concerns

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This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor law firm located in Northern Virginia that specializes in federal employee, security clearance, retirement, and private sector employee matters.

By John Berry

As noted in our earlier article, financial issues are the most common issues that can result in the loss of, or inability to obtain, a security clearance. In security clearance cases, financial issues are generally referred to as Guideline F cases. In Guideline F cases, the government’s concern is generally how a person has handled his or her finances and/or his or her vulnerability to financial manipulation given a pattern of overspending or debt.

The following are some quick tips to help minimize the risk of losing a security clearance involving financial considerations:

  1. Pay your bills.  Most security clearance clients seek our assistance when they have multiple debts that are past due, delinquent, in collections, or have been charged off. In Guideline F cases, the existence of multiple, unpaid debts is the most typical reason for the loss or denial of a security clearance.
  2. Pay/File your taxes. Individuals in tax trouble or who fail to pay and/or file their taxes risk losing their clearance. These tax issues tend to be viewed as more significant for security clearance purposes than regular debts. If outstanding taxes or tax liens are too much for the individual to pay off all at once, it is important to try to work out a plan with the IRS or state tax agency and show good faith towards resolving these debts in order to keep or obtain a security clearance.
  3. Clear up/monitor your credit report. Often times, an individual has encountered difficulties in the security clearance process because incorrect information is listed on his or her credit reports. In our experience, errors can be common, but can also lead to security clearance issues. It is important for an individual applying for or holding a security clearance to keep a close eye on his or her credit report for errors and potential problems.
  4. Do not run up significant debts or live beyond your means.  Having too many debts can put an individual at risk of losing a security clearance. To the government, this can indicate that the individual is living beyond his or her means.
  5. Work with creditors to attempt to resolve the debt.  It is always better for an individual to get ahead of his or her credit problems than to wait until he or she receives notice of a possible denial of a security clearance. An individual who recognizes a debt problem and works towards resolving it early and before a clearance issue is raised tends to be given more credit towards the granting of the clearance as opposed to an individual who starts the process after he or she receives notice of the potential loss of the clearance.
  6. Consider credit counseling/classes. If an individual falls behind in his or her debts, it is still important to show how that individual is working to get back on a healthy financial track in order to alleviate concerns about the individual’s ability to hold a security clearance.  Taking meaningful credit classes or engaging in credit counseling can help mitigate security concerns by showing affirmative steps taken by an individual to get better control over his or her finances.

We represent individuals in security clearance and other employment matters. If you need assistance with a security clearance issue, please contact our office at (703) 668-0070 or at http://www.berrylegal.com/practices/Security_Clearance/ to schedule a consultation. Please also visit and like us on Facebook at www.facebook.com/BerryBerryPllc.

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