Sep
13
In an era of high unemployment and personal debt loads, it may trouble some people to learn that having a significant personal debt burden might decrease a person’s odds of getting security clearance for some government jobs and regular employment at others.
Here’s a look at how debt and employment are linked and what you can reasonably expect if you’re on the hunt for a new job.
Debt-Related Reasons to Deny an Applicant
A recent report on this issue noted that the leading reason that Americans are denied security clearance is delinquent personal debt. A look at cases heard by a court that decided clearance-worthiness of questionable candidates revealed these interesting nuggets of information:
- Making a good-faith effort to repay debts helps. If you have delinquent debts on your credit history, it seems that your odds of getting job clearance improve if you have documented good-faith efforts to repay those debts. Every circumstance is different, but if your record shows no clear reason why your debts went unpaid, you may not make the job cut.
- It’s not a good idea to owe the IRS. Particularly for government-related jobs, it seems that having delinquent tax debts, federally subsidized student loans or other taxpayer-funded loans will seriously harm your chances at getting hired.
- The trend of credit checks is picking up. Apparently, 32 percent of employers polled this year said they regularly checked the credit histories of job applicants. Of those, at least half noted that they looked as far back as seven years. This number is fairly high, considering that several states have outlawed the practice of credit checks for job applicants in non-financial fields altogether.
A Vicious Circle?
Critics of pre-employment credit checks have pointed out that the practice can lead to a devastating cycle of debt: people rack up debt when they’re out of work, then are denied a job (and source of income) because of that debt.
But, on the other side of the coin, supporters of credit checks make these arguments:
- Embezzlement is a lower risk. It seems some employers think applicants with significant personal debt are more likely to embezzle money (to repay those debts, perhaps) than non-indebted employees.
- Selling out is not a threat. Similarly, government organizations want to avoid the chance that someone with a serious debt burden will be tempted to sell government secrets for money that could help them out of a tight situation.
Get Started on Eliminating Your Debt Today
Whatever your reasons, if you have a heavy debt burden, you’re probably interested in erasing it. Consulting with a bankruptcy lawyer in your area may help you determine whether bankruptcy is the right option for getting your personal finances back on track.
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