Old Medical Collections and Security Clearance

Anonymous · ‎01-17-2016

I currently have myself in a small bind. This forum has been a wealth of information but I have a few questions.

I have a Secret clearance reinvestigation about to begin. My SF-86 is due on the 20th.

I have 3 accounts in collections, 2 from a hospital and 1 from a doctor's office. From what I understand, I'm going to have to prove that I am currently working to pay these debts or there's a good chance my clearance won't be renewed.

I contaced both OCs, they said they not longer own the debt and I will be unable to pay them directly, and pointed me towards the collection agencies.

The 2 accounts with the hospital have a DOFD of 03/2009. The CA has been actively updating the accounts every few months, adding interest. Total for these 2 accounts is appx. $2500 total($1600 originally). They show on all 3 CRs.

The 1 account with the Dr. Office only shows up on TransUnion. The CR shows "Last payment made: 8/31/2009" even though there was never a payment made and it should be a DOFD of 03/2009. Balance is $739($479 originally). It hasn't been updated since 1/2015.

I currently have the funds to pay these off if I squeeze a few dimes out of my pockets. Both CA's have never contacted me, no phone calls, no letters, nothing. I assume they have no intentions of collecting, considering the accounts are outside the SOL, and the lack of interest they have had in contacting me.

My question is, if I offer a PFD, is that considered a written acknowledgement of the debt, and will it restart the date these fall off if the CA denies a PFD? I'd like to purchase a house this spring, and was counting on these accounts dropping off my CRs.

Also, from what I've read, a PFD usually needs to be in the full amount. I'd be willing to test the waters with the account that has the smaller balance, but PFD for the original amount due. Is this a feasible way to proceed? It wouldn't be so bad if I stretched 3 PFDs over a few months.

Would it be worth it to offer to settle for a much smaller amount and DV with the CA or CRA to try to get the accounts to drop off my CR's?

I need to figure out how to show that I am taking care of these accounts, but don't want to wreck my credit which should be clean in a few months. I've been completely forthcoming on the SF-86, lying about this type of thing would be a nail in the coffin. I feel like doing a DV first might make me seem like I'm dodging the issue to the investigator instead of taking care of the debts.

Anonymous · ‎01-17-2016

If they DoFD is 3/09 then they should fall off in March. Call the credit bureaus and talk to a supervisor and ask for an EE (Early Exclusion). TU will almost certainly do it since they usually will up to 6 months early. Experian is usually 1-3 months and EQ 1-2 months. Sending a PFD will not restart the clock.

thectdude · ‎01-18-2016

Contact the CA's and work out a payment plan. As a cleared individual myself they will have access to the financials so if you hide it they will look at that unfavorably. All you have to show is that you have a plan in place to take care of the financial obligation. That will allow the adjudicator some leeway in the review process

Anonymous · ‎01-18-2016

I've been totally upfront about the debts. I'll probably start with a PFD offer for the smaller debt, and try working something out regarding the other debts. Thanks.

Anonymous · ‎01-18-2016

I understand you are in a bit of a time crunch but remeber if you pay these it will not improve you credit and could possibly drop your score for the update to paid collection if you don't get a PFD agreement from the CA. If you had started on this a few months ago I would have sugested you google the HIPAA Letter Process, beware that paid medical collections are difficult to get removed from you credit report. You should be able to get them removed with an early exclusion because paying them does not change the original DOFD.

Anonymous · ‎01-18-2016

@Anonymous wrote:
I understand you are in a bit of a time crunch but remeber if you pay these it will not improve you credit and could possibly drop your score for the update to paid collection if you don't get a PFD agreement from the CA. If you had started on this a few months ago I would have sugested you google the HIPAA Letter Process, beware that paid medical collections are difficult to get removed from you credit report. You should be able to get them removed with an early exclusion because paying them does not change the original DOFD.

Paying/settling these will not drop his score. They are already being updated monthly. Scores are simply not the issue here anyway, as they will be gone in a few months. HIPPA process is not warranted here, IMO as they are close to dropping, and it may take too long, OP is under a deadline.

Anonymous · ‎01-18-2016

So if I understand correctly, paying/settling these debts with the CA will not change the drop off date? Should I ask for early exclusion before or after settling, or does it not matter?

RobertEG · ‎01-18-2016

I dont see credit report exclusion as a relevant issue with respect to the background investigation.

They are aware, via your disclosure in the SF-86, of unpaid, delinquent debt. That is the concern in the background investigation, not the issue of whether it is reflected in your credit report or credit score.

The degree to which you must show that you are addressing the debt depends upon the criteria associated with clearance for the specific job.

Jobs, for example, with executive, feduciary, or budgetary responsibilities have specific sensitivity levels that affect the clearance approval criteria.

Anonymous · ‎01-18-2016

@Anonymous wrote:
So if I understand correctly, paying/settling these debts with the CA will not change the drop off date? Should I ask for early exclusion before or after settling, or does it not matter?

That is correct, paying it will not change anything. No need to wait for the early exclusion request. TU will probably remove it now, EX may remove it now or next month, EQ is always the hold-out, usually waiting until the last month.

Anonymous · ‎01-18-2016

RobertEG: The only reason I was addressing exclusion was looking forward to applying for a mortgage loan this spring. As you said, it's irrelevant to the investigation. I was trying to kill 2 birds with 1 stone, and this has helped me out quite a bit.

NormanFH: Thanks for verifying. I think I have read some bad information in the past about paying off debts causing the drop-off date to restart.

Next step will be to try and settle with the CA's, hopefully this week.