Can You Get a Top Secret Clearance With a Bankruptcy?


Bankruptcy does not automatically disqualify someone for receiving security clearances, but it will slow the process down--as will any derogatory financial information. If you are applying for top-secret clearance, background investigators will review the reasons for your bankruptcy. If it was caused by circumstances outside of your control, such as medical bills, you may be viewed more favorably. If the debts that forced you into bankruptcy indicate a lack of financial self control, you may be disqualified. Bankruptcies are public record and can easily be located, and they include detailed information about the nature of debts. Lying about a bankruptcy may also cause you to lose or be denied clearance.

Adjudicative Guidelines

The granting of security clearances is guided by U.S. Executive Order 12968. The order does not specifically mention the word bankruptcy as a possible reason for disqualification of security clearances, but it does list a range of behaviors that could lead to bankruptcy or would be uncovered by background investigators during a thorough examination of bankruptcy process documents. Those behaviors can include frivolous spending, the inability to live within one's means and spending money without evidence of a willingness or intent to pay a debt. According to the adjudicative guidelines, these types of behaviors can raise a security concern for someone applying for top-secret clearances.

Mitigating Factors

Even if a candidate for a top-secret clearance engaged in conduct that may raise questions, background investigators can consider mitigating factors. These factors include whether or not the conduct was infrequent or long ago, whether the applicant attempted to repay debts in good faith or whether there was a legitimate dispute over a debt.

The Positives of Bankruptcy

Bankruptcy isn't the only sign of financial stress. Unpaid debts uncovered on a credit report or judgments in civil court can also lead to denial of security clearances. Large outstanding debts can be problematic, and bankruptcy helps people address those debts in a government-sponsored manner. According to the Air Force Academy, filing for bankruptcy can have positive effects on a person's financial state because it shows a willingness to accept financial responsibility. According to the academy's website, "eliminating your debts through bankruptcy may make you less of a security risk."


If background investigators cannot make a determination on an applicant, the matter may go before an administrative judge. In 2008, a federal panel granted a security clearance to a man who had previously had top-secret clearance. The man filed for bankruptcy in 1997 because of a girlfriend's gambling debts. He gambled also, but to a smaller degree. The panel found that the gambling occurred long ago, and was unlikely to happen again.

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