I have a current payment plan through the IRS to pay my last years taxes, no liens or defaults on that plan paid monthly. If you cannot be counted on to comply in a timely matter with every citizens obligation to file on time, whats to say you wont abuse security rules and obligations that demand similar diligence? Debt settlement can help borrowers clear old debts, often for much less than the full amount owed. While many of these qualities are difficult to pinpoint with scientific accuracy, how a candidate for a security clearance manages money is readily apparent, which helps explain why financial mismanagement is the most common area of disqualification. What is important is the underlying reason for the bankruptcy or credit counseling. We also use third-party cookies that help us analyze and understand how you use this website. Military and Debt - Too Much Debt Can Ruin Your Military Career * Guideline F: Financial Considerations is one of 13 criteria listed in the Adjudicative Guidelines For Determining Eligibility For Access To Classified Information. Credit repair: Why credit counseling may be a better answer Explore our free tool. Bring documentation, especially for any ticklish situations involving credit cards or bank loans. How Debt Settlement Works. The Internal Revenue Service (IRS) treats forgiven debts as income, and you may have to pay income taxes on the forgiven amount. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the sites original Frugal Man. Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. Debt Settlement: How It Works and Risks You Face - NerdWallet In contrast, if you share an account with your spouse and your own credit history is negatively affected as a result of their debt, it could have a larger impact on your security clearance application. will paid collections hurt my security clearance status. You also have the option to opt-out of these cookies. Questions? Instead, your account is updated to something that shows you've settled, such as "Charged-off settled" or "Paid charge-off.". Generally speaking there is no magic FICO score that guarantees a clearance. By settled I mean that I paid it off for a lesser amount and now it shows a 0 balance. Also, hopefully you disclosed all required information on the PR application. The only thing that might be an issue is this: as a clearance holder it is incumbent upon you to self report debts that are 120 days delinquent. If the reports do not report any late payments then you cant possibly know what to list. A settled status isn't nearly as good for your credit score as a "Paid in full" account (though its still viewed more favorably than delinquent or past-due accounts that remain outstanding). Bankruptcy within the past 3 to 5 years with evidence of current credit problems. While it can save cash and reduce your stress level, debt settlement can be costly . Financial management is available on most, if not all military installations, butmilitary members can also seek debt managementor financial advice on their own. His debts include time share accounts, a home equity loan, and credit cards.
