Military and settlement?

Hello..........I'm in the Army Reserves. I use to be Active Army. The answer is NO......doing some kind of debt settlement will NOT cause a Military memeber to lose a Security Clearance. Something like DUI's on a driving record, convictions of some kind, etc. ...that kind of thing. I hope this puts your mind at ease.

...I do want to add, however.........do ALOT of research on debt settlement companies. Look on the BBB ratings and see what the BBB 'rates' them. Can you give me some information on what you need to settle? ALOT of people, on this forum, have helped others settle debts themselves. That way, you're not paying out of pocket costs and you will get more familiar with your credit.

I'm not related to Military, but have extreme respect for them. Nice to have you in our forum Madam. I have no first hand experience in this area. But as far I can gather information through googling is: -
It can lower your debt by 40 to 60% and your debt can be settled within a period of 1 to 3 years.

You may go through the following links: -
Military family: Bankruptcy or debt settlement

In real deep...

Other members may help you more.

I think you for your comment. I served in the Army ( Active and Reserves) for 12 years. It's been an experience.............I've really 'grown' in alot of ways. I'm a single mom nd I work full time. Also.............did a 'tour' in Kwaitt and Iraq. Thank you, again, for your comment.

That's not necessarily true. My Father is a Lieutenant Commander in the Navy and he has seen many of times where people had their security clearance yanked for having bad credit. If you are in the military and are considering doing debt settlement I strongly suggest you speak with your commanding officer first. I can almost guarantee you he is not going to be thrilled that you are going into a program that your accounts to go delinquent. Army wife , are your bills are ready delinquent ? I suggest you look into a debt management Plan with a non-profit credit counseling Agency.

How would the CO know about bad credit? That's what I can't figure out. Heck, we would have bad credit now since being so high in debt. Makes no sense.

Husband is an officer in the reserves and will likely deploy in the next 6-9 months. Has a good civilian job as do I. Bills are current due to taking out a 401K loan to assist.

CC debt runs close to 140K due to many things but including two international adoptions. Cards are Amex (2 of them, highest balances), BofA, Chase, Capital One, and Citibank.

We could put 3K per month toward a settlement program and be done in 2-2.5 yrs.

We can likely muddle through for a while especially with tax returns coming soon. With a deployment, we'll have extra income which will help too.

Looked at a dmp but one would not work with Amex and the other wanted payments higher than our usual minimums.

So, we're stuck. We can muddle through with payments perhaps late at times but hopefully not more than 30 days, get caught up again at tax time/deployment, or look at settlement. We have a child heading for college in the fall so that plays into it to.

I agree, ARMY WIVE.............that DOESN'T make sense to me, either. A few people, in my unit, ( I know for a fact, because they've spoken to me..) are starting to file for BK. Their Security Clearances were just fine. However........I know someone who has GREAT credit, however, has DUI's on his driving record...........HIS Security Clearance was 'denied'. Not trying to make a 'big thing' about this. Also...........I want to add, when I was deployed to Kwaitt/Iraq, I started a debt consolidation program ( din't work out..) but, that din't have ANY effect on my Security Clearance.

I think it is dependant on what type of job your husband has in the military. You have free legal. Use the lawyers.

All it takes is a phone call from the creditor to his commanding officer and the commanding officer has the authority to make you pay them. For that reason the settlement company I work for will not even allow a person in the military to enroll unless they have the commanding officer sign off on it. 99 times out of 100 the CO never allows them to do debt settlement. I agree with FYI. Talk to a military lawyer to verify what I am telling you.

I don't mean to start an arguement here, but, why, ON EARTH, would my Commanding Officier worry about OUR credit?! I've never heard about THAT before. Actually......I DID have a CA call my unit. 'My' ISG, of the company told them if they called there again, 'my' ISG would go through the 'chain of command' and have the CA sued for harrassment. So, again, why on earth would you say that? A few people, in my unit ( as I said before..) filed for BK. When you apply for a Security Clearance, your credit is not checked. I've been in the milirat a LONG time...I know. I just wonder where you get your information.

I ALSO want to add that the debt settlement companies, that I HAVE looked into ( decided not to go through them..however..) could care less whether or not someone serves in the military. It won't 'disqualify' you from using their sevices.

I'm a bit perplexed after reading the above discussion. I, sort of, agree with Sdchargers. Why should a credit problem pose a threat to security clearance?

I have googled and found the following information: -



This above information forces me to grope in the dark and wonder, how come debt settlement affect one's security clearance?

I have also found an information which says that Bankruptcy Chapter 13 can affect your security clearance credential. Please go through the link given below: -
debt settlement or Chapter 13 Bankruptcy?

I'm quite confused. Can someone help me out? In fact, at this juncture I feel that Sdcharger's point is quite strong. But at the same time I feel that it doesn't hurt to consult a lawyer.

I'm not saying that I'm TOTALLY right and everyone else is wrong,.......I'm jusy saying I've never heard of anything like that. Security Clearances are based upon your Criminal Background, warrants, not paying Child Support, Alias, etc. As I said, in the above posts, I know people that were just deployed and they had filed BK's. If someone has found OTHER information, please..inform me. Might be something 'there' that I just don't know. Thanks.

I'm currently active duty military and have been on a debt settlement program for 5 months now. I told my commanding officer about it, just as a heads up. As far as he is concerned it is my perogative and does not concern him. He nor the military can make me pay any debts unless they are military affiliated such as the military STAR card. My wages cannot be garnished nor can my security clearance be hindered in any way. There are many military families in debt and many enrolled in programs such as freedom debt relief. If the military were to reprimand all of us who are having difficulty there would be no one left to go to war. With divorce rates in the military sky-rocketed and the economy the way it is I would expect many more people will be looking for alternative solutions. thanks

I am not in the military but have several friends who are. Two of them have their Secret Clearance with the Air Force. From the information I gathered, the answer to your question vaires by branch and rank within the armed forces. I was told that the best thing for someone in the military to do is to speak with their CO about the situation, and ask specifically what effect being behind on your credit card bills would have on your career. In speaking with various armed forces personell, their responses have ranged from "oh it wouldn't matter at all" to "I'd get discharged from the military", and it never had anything to do with whether or not they had a clearance. According to one guy I spoke with in the Air Force, there was even the possibility of demotion.

This has been addressed, but I'll reiterate: If you go behind on your bills, someone above you in the military will more than likely find out eventually. Yes it is a private matter but seriously...its the military.

In summary: ask your CO what effect being "seriously delinquent" on your credit cards would have on your career with the military, if any.

@ sdchargers: You said that when you apply for a security clearance, your credit is not checked. Both of my friends that have their Secret Clearance with the Air Force had credit checks done, so I think this may be something that varies by branch in some cases. Also, when I was being interviewed for their background checks (I got interviewed on both :)), I did notice that the people doing the investigation weren't actually part of the military...maybe it varies by which company or group is conducting the background check process as well? If you have any insight on this please share.

And on a side-note: I have the utmost respect for people in the armed forces. If I were president, you would get $100 of debt discharged for every day you are deployed/active.

I believe it depends on a lot of things, the type of clearance first a secret is not as serious as a top secret even with a top secret there are about 12 levels of access. I disagree and I know someone in the AF that did a debt program and completed it and she was fine. I think I got lucking and did mine just before I had this situation pop up and a secret clearance is good for 10 years, top secret is different it is good for 5 years, so when you have one you get up for a review more. And also by the time you finish the program and get somethings together depending on how long you had it it may poss a problem.

A CO can't make you pay the debt and they have no right to talk to your CO about it. Also if now in the Navy they are responding to the letters that have been sent with a response concerning the Fair Creidt Act. These credit card companies are snakes and are abusing people right now. I wouldn't be surprised if the CO was in a program or ask you for some contact info. I had my interest rates increased to 55% for no reason just that the jistory of my account. Mind you I paid on time all the time and I paid more than the minimum on this account I had paid it off twice and when i charege 375 on it they pu interest at 55% my rate was 14.99. These are different times and I believe that people understand. To hell with them and I think that everyone is a little bit sick of them,

To everyone confused at how debt settlement can hurt your security clearance, it can if you don't show a change and if you are taking responsibility. If you look, what perplexes me most, is the person who says they are confused as to how debt settlement can impact a clearance, PHOENIX, pastes the criteria for a security clearance right below their post with financial responsibility right near the top. Financial irresponsibility is one of the most common reasons that a security clearance is denied, because when individuals become desperate financially, that is one of the most common reasons that they would consider selling secrets, historically. So, I am considering a program, and I do have a security clearance, but I am very cautious and want to have my credit in great shape by the time I go through my next 5 year update for my clearance so that I can demonstrate I have taken responsibility and improved my credit and finances.

Quote:

I work for a credit counseling agency: CESI Debt Solutions - have worked here for 3 years and we do DEBT MANAGEMENT. Debt Management will not effect your Security Clearance, b/c you are paying your creditors every month, just at a lowered interest rate and lower monthly payment. We also offer DEBT SETTLEMENT, via a law firm - this is where you do not pay your creditors until you have saved up enough money in an escrow account to pay back about 25-50% of what you owe. DEBT SETTLEMENT DOES HAVE THE ABILITY TO EFFECT YOUR SECURITY CLEARANCE. If a client is in the military, we cannot offer Settlement to the client. Just google "Debt Management versus Debt Settlement", and you will see. I was actually on a DMP before I worked here - I have paid off all of my debt, and my credit score is now in the 720's. I am getting credit cards and paying them off each month to personally build my own credit, and I don't have issues getting any credit cards. Heck, I could probably even buy a house now!

Financial irresponsibility could be looked at like you will sell government secrets to straiten out your personal mess. Nuff said.