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Will I Lose My Security Clearance If I File Bankruptcy?

In a word, no. I have spoken to, and represented, many New Jersey residents who are members of the military, TSA and other government agencies, and my answer has always been the same.

In fact, federal law (under the Bankruptcy Code) prohibits this from happening. Section 525(a) states that,

“a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant . . . or discriminate with respect to employment against, a person that is or has been a debtor [in bankruptcy] . . . solely because such . . . debtor [filed bankruptcy] . . . or was discharged under the Bankruptcy Act.”

Thus any branch of the military, government agency, or other “governmental unit” cannot revoke said clearance. If anything, filing bankruptcy will help, because you are less vulnerable.

People in debt are often desperate for money and as such can be more susceptible to bribes or blackmail that could compromise security. Bankruptcy takes that away.

This question raises one of many myths and fears that people have about bankruptcy that can prevent them from getting a fresh start.

So What Should I Do?

If you live in South Jersey and are considering filing bankruptcy, call my office at 856-432-4113 or contact me through this site for a free consultation to discuss your case.

If you have more questions about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.

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