As a former federal executive who managed a security group where all employess were required to have at least a confidential level clearance, the vast majority a secret clearance, and a handful requiring a top secret clearance, I was involved almost daily with security investigation and clearance issues.
Most background investigations (BIs) are directed at two things. Number one, honesty in disclosure, and two, a review of your available records. Presence of old, unpaid debt, has two potential derogatory aspects. One, it may subject you to compromise if its payment is still required, and two, it reflects negatively on your moral character.
As for honesty in disclosure, you take your chances when you withold anything or miss-state the facts. In your BI application questionnaire, you will probably be asked if you have any old, unpaid debts. Or the investigator, in his interview, may pose that question. If you answer no based on its exclusion from your CR due to its age, you take a chance. Chances are he will only be able to obtain access to that information from your CR, so you may be able to dodge it. That is particularly true if the BI is only for the grant of a confidential clearance, for those do not do in-depth investigations beyond the normal sources. However, if the clearance sought is for a secret or top secret clearance, the BI is usually a bit broader, increasing the chances of the information being discovered from sources outside of the four walls of your CR.
As for the impact of the bad debt, other than its reflection on your character, if it is no longer legally collectible due to expiration of its SOL, the issue of potential compromise based on this debt is pretty much gone. So I am not sure why the investigator would be very concerned about its future payment status. There is really no compelling reason for him to require payment as it regards your susceptibility to cooercion. Maybe he is just testing your moral character by "requiring" its payment. I dont see that as being a show-stopper.
Be honest, and realize the potential downside if any dishonesty is detected.
As for accrual of interest on an unpaid debt, your contract with the creditor most likely included, in your initial account agreement, to such a stipulation. Most states place interest level ceilings on unpaid debt, so the amount is regulated, but the bottom line is they have not received the money they lent, and are normally entitled to interest on their unpaid debt. Check out your state civil code on unpaid debt.
