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Will a Foreclosure Affect my Security Clearance?

Posted by Rory Vohwinkel | Mar 07, 2019 | 0 Comments

If you are facing the threat of foreclosure, the last thing you need is to face the possibility of losing your source of income. But if your job requires a security clearance, that's exactly what could happen. That's because foreclosure is one of the financial factors that can affect your security clearance. In the most severe cases, you could lose your security clearance altogether.

Guideline F: How Financial Factors can Affect Your Clearance

Certain jobs within and outside of the federal government require employees to qualify and maintain a certain level of security clearance. The government sets out a number of guidelines that cover everything from ties to foreign countries to drug abuse. But the guideline that leads to the most security clearance problems is the one that regulates financial issues, known as Guideline F. Guideline F reads as follows:

Failure or inability to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified information.

In other words, if the review officer in your case believes that your poor financial track record is a reflection on your trustworthiness, you may run into issues with your clearance.

Will a foreclosure hurt my security clearance?

There is no simple answer, as every case is different. But understand that foreclosures happen every day, and having a foreclosure on your credit report isn't a guarantee that you will lose your clearance or have your application for a higher clearance level denied.

The review officer in your case will consider everything that went into your situation. If you dealt fairly with your lender and didn't lie about the foreclosure during the clearance process, you are more likely to survive a review with your clearance intact. But if the officer is concerned with the possibility of fraud, or if you were not forthcoming during your review process, you may wind up having a difficult time keeping your security clearance after your Nevada foreclosure.

Foreclosure Protection Options in Las Vegas

If you are concerned about your security clearance but have not yet faced a foreclosure on your Las Vegas property, you have a number of options to avoid foreclosure altogether. These options include:

Bankruptcy – Thanks to the automatic bankruptcy stay, the filing of a Chapter 7 or Chapter 13 bankruptcy will halt a foreclosure action against you. However, bankruptcies can cause their own issues thanks to Guideline F.

Foreclosure Mediation – Since 2015, the United States Bankruptcy Courts have allowed homeowners to enter into mediation with their lenders outside of a formal bankruptcy filing. Foreclosure mediation will pause your foreclosure without the effects a bankruptcy can have on your security clearance.

Loan Modification – One of the best options is agreeing to a loan modification with your lender. A loan modification is simply an agreement with your lender to alter your loan to include more favorable terms or rates.

If you are facing foreclosure in Nevada and are concerned about your security clearance, discuss your options with the experienced Las Vegas bankruptcy attorneys at Vohwinkel Law.

About the Author

Rory Vohwinkel

Rory Vohwinkel began his legal career at one of Nevada's oldest and largest law firms, representing clients in commercial litigation and business transactions. Rory went on to serve as the sole in-house attorney for a national real estate investment and property management company. In 2009, Rory...

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