Public trust clearance is a mandatory level of security clearance for those working in sensitive positions within the federal government. Approval for this clearance requires FBI-level investigations, which takes a few months to complete. Credit history and current financial status play major roles during these investigations. Filing for bankruptcy in the middle of security clearance investigations can greatly affect applicants' chances for approval.
Public Trust Clearance Definition
A public trust clearance is the most basic form of security clearance available for work with the federal government. This type of security clearance may be necessary for a variety of positions, including intelligence work, political jobs and federal law enforcement. You must complete Standard Form 85P and submit the document to the U.S. Office of Personnel Management to begin the investigation process for your security clearance. Lying, attempting to hide information or providing misleading information on this form is a federal offense punishable by a fine of up to $10,000 and/or five years in federal prison.
National Agency Check
Standard Form 85P requires a National Agency Check with Local Agency Check and Credit Check also known as a NACLC. This means the FBI will review your employment history, criminal history and credit information stored on federal law enforcement databases, federal and state tax agencies, local law enforcement databases and all major credit reporting bureaus for the last seven to 10 years. The U.S. Office of Personnel Management may also ask you to provide additional documentation relating to your debts including property settlements, status of delinquent loans and any creditor judgments entered against you.
Filing For Bankruptcy
Filing for bankruptcy during the FBI's investigation into your background could have a negative impact on the status of your security clearance application. Your credit score is a major factor in determining eligibility for security clearance. The damage a bankruptcy does to your credit may rule you out for approval because the federal government views you as a security risk. If you have financial problems, it's more likely you could sell secrets obtained through your security clearance level. If you believe filing for bankruptcy is the only solution to solve your financial difficulties, the FBI's investigation will not prevent you from filing.
Informing The FBI
If you choose to file for bankruptcy during your NACLC for security clearance, it's a smart move to inform the FBI ahead of time. Providing investigators with sufficient documentation about your financial status and plans to solve your debt could positively influence your chances of seeing your application approved. This also shows that you're taking charge of your finances and developing smarter debt strategies, which may reduce your overall risk level in the eyes of federal investigators.