Contractors' Questions: How will bankruptcy affect my SC security clearance?

Contractor's Question:I am a contractor working under my own limited company. Due to a poor 2009, I am being advised to file for bankruptcy as an individual, not as my limited company. How will this impact my ability to get contracts? I do most of my work for the public sector including the criminal justice sector, for which I am SC cleared. The SC officials do not seem overly worried about my incoming status, but I am interested in the credit checks that agencies sometimes do. Will bankruptcy make me 'unemployable' as a contractor or even as a permanent member of staff?

Expert's Answer:You must declare your bankruptcy to the DVA through your security officer. You will need to complete an additional form and they will review your status based on the new information. The potential to maintain current clearance levels reduce if it is an issue at the level that you have clearance for, or your clearance expires. Pending their official decision, your opportunity to remain on a post that requires clearance may be affected, as may your ability to secure future posts of a sensitive nature.

Checks will be made on your financial background, as it is assumed that there is more possibility of an individual being susceptible to bribery if they are not financially secure. The situation is likely to be worse if you don't declare your change of status.

There are, of course, additional positions within Financial and Public Sector organisations that require credit checks, due to the nature of the systems being worked on. Again, for you, it could be a risk to securing future positions where credit checks are undertaken.

Finally, I would suggest you liaise with the accountant you use for your limited company. There are some rules about being a director of a company and your accountant can advise you on whether your individual circumstances conflict with these obligations.

The expert was Alan Rommel, managing director of Parity Resources, the IT recruitment and services group.