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Summary

The applicant, a 53-year-old employee of a defense contractor, faced trustworthiness concerns under Guideline F (Financial Considerations) due to delinquent debts totaling approximately $34,302. The applicant successfully mitigated these concerns by demonstrating a good faith effort to repay debts, completing financial counseling, and providing positive character references, leading to a favorable outcome of eligibility for a public trust position.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: This is a joint installment loan with an unpaid and past-due balance of $13,438 that was placed for collection and charged off. Applicant reached out to the creditor and agreed to a repayment plan under which she commenced making monthly $50 payments before November 2017. She submitted documentation of routine past monthly payments with a recent receipt, dated July 25, 2018, reflecting a reduced remaining balance of $12,988. Applicant also discussed settlement possibilities, and the creditor initially offered to settle the account for a one-time payment of $6,494, or a monthly payment of $780 for ten months, neither of which Applicant could afford. Another option was an increased monthly payment of $75, commencing in September 2018. Applicant claimed that she agreed to this option, but she has not submitted any documents to support any such payments. Nevertheless, the account is in the process of being resolved (1.a). This is an unspecified type of account with an unpaid and past-due balance of $3,891 that was placed for collection and sold to a debt purchaser. Applicant reached out to the debt purchaser and agreed to a repayment plan under which she commenced making monthly $50 payments before November 2017. She submitted documentation of routine past monthly payments with a recent receipt, dated July 24, 2018, reflecting a cumulative payment of $350. Applicant also discussed a settlement possibility, but Applicant could not afford the one offered to her. She intends to increase her monthly payments for six months before exploring another settlement option. Nevertheless, the account is in the process of being resolved (1.b). This is a joint secured installment loan, which Applicant claims was made to purchase a vehicle, with an unpaid balance of $3,727 that was placed for collection and charged off in 2014. Applicant contends that she called the original creditor and the eventual creditor, to validate the account, but neither creditor had any information about it. She claims that she searched for paperwork and found a letter stating that the balance was $463.50, and that on February 28, 2014, she paid the creditor $471.22 with her debit card and has a confirmation number. While Applicant is specific in her references and claims, she failed to submit any documents to: (1) connect the original creditor to the eventual creditor; (2) support her position that she contacted the creditors or was advised that they had no information regarding the accounts; (3) support her position that she made the claimed payment; or (4) support her position that the account has been paid in full. Until those documents are submitted, it is impossible to determine the current status of the account. The account has not been resolved (1.c). These are two medical accounts with unpaid balances of $101 and $123 that were placed for collection and charged off. Applicant and the creditor agreed to a settlement regarding the smaller of the two accounts, and on December 10, 2015 – two years before the SOR was issued – she paid the remaining balance of $76.13, settling the account in full. With respect to the larger of the two accounts, on December 10, 2015 – again two years before the SOR was issued – she paid the creditor $123.84. Both accounts have been resolved (1.d). This is consumer loan from a financial institution with a high credit of about $10,000 that was placed for collection. A judgment for $11,524 was filed in 2014. Applicant explained that she had made monthly payments of about $300 for two to three years. When her financial issues made it difficult to make the regular payments, the creditor agreed to accept reduced payments. She failed to submit any documentation to support her contention that before the judgment was filed she had made any payments. By July 2017, the unpaid balance on the judgment had increased to $14,272, including interest. Applicant reached out to the collection attorneys and discussed settlement possibilities, and she was offered a proposed settlement of 60 percent of the existing balance to be paid by October 2017, but she was unable to agree to that offer. Negotiations continued, and in November 2017, Applicant agreed to a repayment plan under which she authorized automatic withdrawals from her account in the amount of $50. She submitted documentation of routine past monthly payments. Unfortunately for Applicant, despite her continuing monthly payments, because of the accrual of interest, the unpaid balance keeps increasing. As of April 2018, it was $14,659. Applicant intended to continue making the monthly payments, and after six months, she expected to receive another settlement offer. While the record is silent as to what subsequent events had occurred, the account is in the process of being resolved (1.e). This is a credit-card account with an unpaid balance of $1,499 that was placed for collection and sold to a debt purchaser. Applicant reached out to the debt purchaser and agreed to a repayment plan under which she authorized automatic withdrawals from her account in the amount of $63. She submitted documentation of routine past monthly payments, and expects the account to be paid in full by August 2019. The account is in the process of being resolved (1.f).

The judge granted the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d). The decision turned on the following: The applicant demonstrated a good faith effort to repay debts through established repayment plans; The applicant completed financial counseling with a certified financial planner; Positive character references supported the applicant's integrity and reliability.

Why the applicant prevailed

• The applicant demonstrated a good faith effort to repay debts through established repayment plans.
• The applicant completed financial counseling with a certified financial planner.
• Positive character references supported the applicant's integrity and reliability.

Conditions referenced

Key rule quoted

“Trustworthiness decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure.”

Procedural posture

• SOR issuedOct 13, 2017
• Answer filedNov 8, 2017
• Hearing heldJul 24, 2018
• Decision dateJan 4, 2019

Cite for

• Mitigation of Financial Considerations Under Guideline F
• Good Faith Efforts to Repay Debts
• Impact of Personal Circumstances on Financial Reliability