Posted on June 3, 2009 at 10:33 pm I already saw a thread that discussed this question, but the the guy that was asking works for a non-government and non-financial institution. I am just wondering about bankruptcy and security clearances. I do not much understand the concept, but a loved filed bankruptcy recently, and he's in his 40's and he is an air force mechanic. Can somebody explain to me what security clearance is, how it relates to bankruptcy, and what can one do to get another job after bankruptcy...thank you very much in advance.

Posted on June 3, 2009 at 10:59 pm Bankruptcy and security clearances are probably related on issues regarding trustworthiness and creditworthiness. If a person files bankruptcy it may give an impression that that person was negligent with his/her finances--and so how would he/she be credible working for a financial institution or with the government if his/her credit report says that he/she can't be trusted with money.I am not sure. That is just a theory.

Posted on June 3, 2009 at 11:17 pm I agree with that theory, although as per 11 U.S.C. - employers may not discriminate against consumers who have filed bankruptcy, and if it is the sole reason why a consumer would not be hired, would not be promoted, or be terminated, the employer would be in violation of the FCRA (Fair Credit Reporting Act) but it would be hard to prove that bankruptcy was the employer's reason for discriminating against an employee.Bankruptcy and security clearance for consumers working in a government agency may also have something to do with the ability of the consumer to keep secrets. The government would, of course, want to know, if the person they give authorized access to sensitive/classified information: is a security risk, loyal, susceptible to bribery, discreet, etc.Bad credit, or worse bankruptcy, seems to imply irresponsibility and unreliability.

Posted on June 3, 2009 at 11:25 pm To define security clearance:It is the U.S. government's determination of a person's eligibility for access to classified/sensitive information, of which, there are levels:ConfidentialSecretTop SecretI am not sure what level of clearance an air force mechanic has but I think that the elimination of your loved one's debt through bankruptcy makes him/her less of a security risk. I think that he/she is going to be fine---unless he/she has a bad relationship with the direct supervisor.

Posted on June 3, 2009 at 11:48 pm If your loved one is still with the air force, then his clearance status is still "active," are you worried that his security clearance is going to be revoked because of bankruptcy?

Posted on June 4, 2009 at 12:18 am I was reading through all the answers and questions and I think you were wondering if bankruptcy is going to affect your loved one's security clearance.Since bankruptcy cannot be the reason for the downgrading or cancellation of the clearance, it should be the circumstances that led to it, the job performance, and the relationship with the chain of command. I am not from the air force so I can only assume that ultimately, the decision of the security section of the air force with regards to your loved one's bankruptcy and clearance, would depend on what caused the bankruptcy: was it because of an unforeseen unavoidable unfortunate situation or plain financial irresponsibility?  It would also depend on the recommendations and testimonials of peers and the immediate supervisor.The fact that your loved one used a government approved means to eliminate debt (bankruptcy) makes him/her less of a threat to security. If your loved one does not have any outstanding debt--if bankruptcy has successfully eliminated all of his/her financial burden--he/she should be fine.

Posted on June 4, 2009 at 12:40 am Just to add to the 11 U.S.C.,  Section 525 of the U.S. Bankruptcy Code also prohibits discrimination based solely on bankruptcy.You may also read up on Sections 604, 606, and 615 of the Fair Credit Reporting Act to know what the law requires from the employers and what are the very specific set of rules that they should follow with regards to obtaining an individual's credit report.

Posted on June 4, 2009 at 12:52 am To answer your question about how to get another job after bankruptcy, assuming that you have lost your job, you would have to repair and rebuild your credit. This is still related to the credit report and how some employers run credit checks on their prospective employees. If they reject your application because of bankruptcy, as iamfyodor has mentioned regarding the law, prospective employers have a responsibility to tell you from which reporting group it came from, and what you can do to dispute the report.As for getting another job, if you think that security clearance is going to be an issue, you can try getting a job that doesn't require one. Since you filed bankruptcy and was aiming for a fresh start, why not change the nature of your job too.

Posted on June 15, 2009 at 4:33 pm It is good that you brought up the 11 U.S.C. in relation to bankruptcy and employment. We have to keep in mind though that most of the time we are talking about a matter of perception. Most people perceive those who have filed bankruptcy as irresponsible in some way as they were unable to "manage their finances." A lot of people, and employers, do not take into consideration the genuine hardships that cause a lot of people to file bankruptcy. These would include (but are not limited to of course) a job loss, medical issue or divorce. So keep that in mind- it would be very hard to prove that a potential or current employer did not hire you or give you that promotion because you have a bankruptcy on your credit report.