The latest government shutdown has left the news cycle, but the impact—and anxieties—remain for many Federal employees and contractors. Those whose careers depend upon maintaining their security clearance have been managing a special sort of strain. They have not only been facing furloughs, but the additional risk of managing that furlough poorly and losing their security clearance—and job—as a result.
Financial considerations (Guideline F) remain the most common reason for security clearance revocations and denials in 2025. One may set themselves up for success in 2026 by addressing some common financial pitfalls for security clearance holders: one of which is assuming that debt is the only financial red flag for Security.
Does Your Financial Situation Affect Your Security Clearance Eligibility?
Yes, your finances, including debt, are an active security concern. Debt in and of itself, even bankruptcy, is not necessarily disqualifying. It is not only money going out that can trigger security concern under Guideline F, but money coming in, as well.
Understand that the concern with your finances is not about personal judgment. It is about protecting United States security interests from the liability of a clearance holder being leveraged by a foreign intelligence service into unlawfully disclosing classified information.
The rationale underlying Guideline F is threefold:
Your soundness of judgment
Failure to meet your financial obligations or live within your means calls into question your ability to follow rules, manage your affairs, and act responsibly: all qualities required for those trusted with a sensitive position.
Financial insecurity makes you a security liability
Money is an all too common incentive for espionage. People who are not in dire financial straits tend to be more challenging to bribe. If you are $500 thousand in the red, and someone offers to pay off your debts in exchange for sensitive information, you present more of a risk than your colleague with well managed finances.
By the same token, sudden financial windfalls also raise security concerns. If an unexpected influx of cash (or spending that indicates as much) goes unexplained, the source of that money comes under suspicion. Was it an inheritance and entirely above board? Or a payoff for criminal activity like espionage?
Financial Problems Indicative of Another Problem
Financial strain is sometimes the smoke of another bigger fire. In the eyes of Security, money problems might be symptomatic of anything from compulsive gambling to substance abuse.
Do Not Try to Hide Your Money Problems
Failing to self-report certain events/changes in circumstance can be more challenging to mitigate than whatever you neglected to report to your SO. SEAD 3 outlines reporting obligations for security clearance holders. Your agency may have its own additional requirements. For any of the following financial issues or anomalies, report the dollar value and explain the reasons for the problem or change:
- Garnishment of wages;
- Filing for bankruptcy;
- A lien;
- 120+ days delinquency on debt;
- Eviction;
- Other sources of income/employment;
- Sudden cash deposits/wealth increases (inheritance, gift, lawsuit, lottery winnings, etc.).
Under continuous vetting (CV), anything that pops up on a credit report—missed loan payments, missed credit card payments, a second mortgage—could flag your file as a potential security risk and trigger further investigation. Request your credit report every other year, and ensure it is accurate. Keep your correspondence regarding corrections in your own personal, digitized security file in the event security needs to review the evidence. On the off year, request your security file from the DCSA facility at Boyers, PA, and ensure its accuracy, too.
Being Responsible Means Taking Responsibility
Your failure to disclose significant financial issues or changes can trigger Guideline E concerns. Financial Considerations (Guideline F) may be the most common trigger for security clearance reinvestigations. That does not mean it was the sole or even primary deciding factor in all of those cases with unfavorable outcomes. Concerns under Guideline E: Personal Conduct can accompany—and exacerbate—any other security concern.
Responsibility is expected of you in not only the character sense, but a practical one. Fully disclosing financial information to the government is a challenge when you cannot fully disclose information to yourself. Maintain careful records. This includes the more obvious items like receipts, paystubs and statements, but it also includes notes that contextualize those items. Did you have a phone call with a creditor? Note that: the name of the person you spoke to, the date, the time, what was said, what (if any) actionable information was provided. Did your mortgage lender tell you to do something to resolve a payment issue, and you then followed through? Be able to explain and demonstrate as much.
Financial issues are a source of shame for many. If you spin those issues for your SO (significant other), do not let such fabrications cloud your reporting to your SO (your security office). If your debt was triggered by excessive gambling, disclose that. Maybe you could convince your friends that your debt resulted from the government shutdown when the reality is you were plummeting toward dire straits well before then, but do not attempt to use a furlough as an excuse with the government. Your lack of candor says just as much, if not more against you than any fiscal irresponsibility.
Bad Financial Advice Is Worse Than No Financial Advice
Filing for bankruptcy or enrolling in debt counselling is not automatic grounds for security clearance revocation or denial. Seeking help shows prudence: a characteristic expected of those in sensitive positions. Seeking help from bad actors like predatory loan consolidation firms, however, shows poor judgment. Many avenues offer help to those in dire financial situations. Sticking to government-sponsored programs can reduce your risk of entrusting your finances to a company feeding you bad advice and digging you deeper: with both your finances and your SO.
Secondary Employment and Gig Work
Depending on your level of clearance and employing agency, you may be expected to disclose any additional sources of employment/income. If you were furloughed during the government shutdown and picked up a side-gig as, say, an Uber driver, you may need to report that.
Reporting complementary income streams to Security is a requirement additional to reporting any and all eligible income to the IRS—another must for those with security clearance. Be mindful of reportable income thresholds. Small payments over the course of months may add up to a reportable amount in the IRS’s eyes. Failing to pay taxes is a particular hazard. Being delinquent on medical debt is one thing. Failing to pay the IRS is another.
Context Matters
A single incident or transaction may be what triggers investigation, but the larger situation at play is what you are judged on. Many financial problems can be mitigated with careful strategy. When assessing the security risk posed by your financial issues, adjudicators consider:
- Was the issue in your control?
- Is this part of a larger pattern?
- Did you act responsibly given the situation?
- What steps have you taken since to remedy the situation/ensure it does not happen again?
Make and maintain a Family Budget on a spreadsheet, and save it in your own personal security file. Have it ready for Security to review should it be needed.
Make the Context Work for You
This does not mean lying about the context of your debt by weaving false narratives about furloughs and hospital bills when the truth is you were living beyond your means. The government will know if your debt started because of a government shutdown or because of frivolous spending.
Making the context work for you means taking proactive steps to create opportunities for adjudicators to find in your favor. Delinquent on taxes? Contact the IRS to set up a repayment plan. Gambling debt? Enroll in addiction counseling. Medical debt? Contact government-sponsored resources and your medical providers to research your options.
Establish the course of action that is most responsible given your circumstances, make a plan, then follow through with that plan. And, as always, document everything. If a financial irregularity is flagged, you will be grateful for your past prudence in notating precisely what happened, what you did about it, what corrective measures you have taken/are taking now, and how you have been following through.
Prepare for the Worst to Ensure the Best in 2026
Financial issues are an all too common factor in security clearance denials and revocations, but it need not be so. Make it your goal for 2026 to request your security file, and update your personal files to prepare yourself for any future investigations. Make it your birthday tradition to reread SEAD 3 and SEAD 4. Prepare for the worst to ensure the best.
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Tully Rinckey attorneys understand that issues involving security clearances and financial strain can be challenging, and they will handle your matter with the attention and tact it deserves. If you have additional questions, our team of dedicated security clearance attorneys is available to assist you today. Please call (888) 968-1893, or schedule a consultation online.
