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Divorce Debt Mountain While Trying To Get Security Clearance – Robert

“Dear Steve,

I went through a divorce in 2004 and i was stuck with most of the bills. I am in the military and i am trying to get a security clear., but am having trouble due to all the bills that went past due and charged off from the divorce. I have paid on alot of the bills working my way from the smaller balances but now i am getting to the larger accounts. I need some help on the best way to pay for them with out spending my whole pay check each payday.


I asked my friend Mike Killian to answer your question for you. I wanted to make sure you got an answer as quickly as possible as I’m a bit backed up at the moment. I’ll be watching the comments on this question and be around to help if you need me.


Dear Dear Robert,

As a retired military member with the highest of security clearances, I do understand your concern and dilemma. My drawback is that I have been out of the system for some time and therefore not knowledgeable of current security background checks. My advice is to check with the Staff Judge Advocate’s office as well as the people handling your security clearance armed with the information I will offer you below on debt reduction/elimination. Determine from them the best course of action based upon each option and its impact on your clearance.

Your options are fairly limited. The first thing is contacting the creditor and trying to lower interest. This may be a mute action but who knows. It might work. The second option is working through a debt counselor to try to get that interest down and working out a debt management repayment program. Please check with Better Business Bureau and anyone familiar with a local office before making any commitment to them. Simply locate a debt counselor in the yellow pages of a nearby major metropolitan area. The third option is debt negotiation. With this option you or a professional debt negotiator offer less than what you owe…. Say 50%. That sounds good on the surface but has some drawbacks. Debt negotiation usually requires a lump sum payment and completely destroys your credit. Additionally any debt forgiven above $600 will be taxable by the IRS as added income.

Your final option is bankruptcy and unfortunately, this may be one of your few workable options. You can usually talk to a bankruptcy attorney for a free initial consultation and the attorney can tell you its affect on your personal situation. You gave no indication as to your assets but I assume they are limited.

But these are your options and you need to weigh each according to your needs, wishes, and desires.

Good luck.



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About Mike Killian

Mike Killian
Mike Killian is founder of Learning Credit and Debt Management. He has been writing and teaching about credit and debt management issues for over 12 years. His articles have been referenced by various members of the media, including MSNBC and The Motley Fool. Mike has also offered debt elimination seminars to businesses and community colleges for many years. He has an MS in counseling and is a nationally certified as a Personal Finance Counselor. Mike can be found at

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