ISCR Case 19-00114

Case Headnote

ISCR Case No. 19-00114

deniedSep 9, 2019· Hon. Richard A. Cefola· hearing

Summary

A 52-year-old defense contractor employee was denied a security clearance due to unresolved financial issues under Guideline F (Financial Considerations). The applicant admitted to multiple past-due debts, including approximately $11,694 owed to Creditor A, $10,134 to Creditor B, and $1,299 to Creditor C, all stemming from automobile repossessions. Additional admitted debts included $493 to Creditor D, $414 to Creditor F, and $1,555 to Creditor H. The applicant also owed $328 to Creditor E and $173 to Creditor G, both of which were later paid.

The administrative judge found that the applicant's financial issues were ongoing and not sufficiently mitigated. The applicant filed for Chapter 7 bankruptcy two months after the Statement of Reasons (SOR) was issued, which was seen as an indicator of continuing financial distress. Apart from the bankruptcy filing, the applicant had done little to address several past-due debts.

Ultimately, the applicant failed to demonstrate a good-faith effort to repay overdue creditors or resolve the outstanding debts, which totaled over $25,000 from the repossessions alone. This lack of mitigation led to the denial of security clearance eligibility.

Why the Applicant Was Denied

The applicant admitted to significant past-due debts totaling over $25,000 from multiple automobile repossessions.
The applicant filed for Chapter 7 bankruptcy two months after the SOR was issued, indicating unresolved financial distress.
The applicant did not demonstrate a good-faith effort to repay overdue creditors or resolve debts, failing to mitigate the financial concerns.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyThe applicant's financial issues are ongoing and recent.
AG ¶ 20(b)rejectedConditions Beyond the Person's ControlThe applicant did not demonstrate that her financial problems were largely beyond her control.
AG ¶ 20(c)rejectedReceived Financial CounselingThere was no evidence of financial counseling.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant did not show a good-faith effort to resolve her debts.
AG ¶ 20(e)rejectedReasonable Basis to Dispute DebtsThe applicant did not provide evidence to dispute the legitimacy of her debts.

Key Rule Quoted

“Failure to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information.”
— AG ¶ 18

Procedural Posture

SOR issuedJan 31, 2019
Answer filedMar 5, 2019
Hearing heldMay 7, 2019
Decision dateSep 9, 2019

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Impact of Recent Bankruptcy on Security Clearance Eligibility
Failure to Demonstrate Mitigation of Financial Distress in Security Clearance Cases

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant admits that she owes about $11,694 to Creditor A, as the result of an automobile repossession. $11,694	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.b	Applicant admits that she owes about $10,134 to Creditor B, as the result of a second automobile repossession. $10,134	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.c	Applicant admits that she owes about $1,299 to Creditor C, as the result of a third automobile repossession. $1,299	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.d	Applicant admits that she owes about $493 to Creditor D, and claims to have made some payments; but apart from the post-SOR Chapter 7 bankruptcy petition, Applicant has done little to address this past-due debt. $493	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.e	Applicant admits that she owed about $328 to Creditor E; and avers she has paid this debt, which is supported by a most recent, post-hearing credit report. $328	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.f	Applicant admits that she owes about $414 to Creditor F; but apart from the post-SOR Chapter 7 bankruptcy petition, Applicant has done little to address this past-due debt. $414	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant admits that she owed about $173 to Creditor G; and avers she has paid this 19-year-old debt, which is supported by a most recent, post-hearing credit report. $173	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.h	Applicant admits that she owes about $1,555 to Creditor H; but apart from the post-SOR Chapter 7 bankruptcy petition, Applicant has done little to address this past-due debt. $1,555	Against Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant admits that she owes about $11,694 to Creditor A, as the result of an automobile repossession.

$11,694

Against Applicant

Auto Loan Debt

Admitted

—

1.b

Applicant admits that she owes about $10,134 to Creditor B, as the result of a second automobile repossession.

$10,134

Against Applicant

Auto Loan Debt

Admitted

—

1.c

Applicant admits that she owes about $1,299 to Creditor C, as the result of a third automobile repossession.

$1,299

Against Applicant

Auto Loan Debt

Admitted

—

1.d

Applicant admits that she owes about $493 to Creditor D, and claims to have made some payments; but apart from the post-SOR Chapter 7 bankruptcy petition, Applicant has done little to address this past-due debt.

$493

Against Applicant

Unspecified Financial

Admitted

—

1.e

Applicant admits that she owed about $328 to Creditor E; and avers she has paid this debt, which is supported by a most recent, post-hearing credit report.

$328

For Applicant

Unspecified Financial

Admitted

—

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

1.f

Applicant admits that she owes about $414 to Creditor F; but apart from the post-SOR Chapter 7 bankruptcy petition, Applicant has done little to address this past-due debt.

$414

Against Applicant

Unspecified Financial

Admitted

—

1.g

Applicant admits that she owed about $173 to Creditor G; and avers she has paid this 19-year-old debt, which is supported by a most recent, post-hearing credit report.

$173

For Applicant

Unspecified Financial

Admitted

—

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

1.h

Applicant admits that she owes about $1,555 to Creditor H; but apart from the post-SOR Chapter 7 bankruptcy petition, Applicant has done little to address this past-due debt.

$1,555

Against Applicant

Unspecified Financial

Admitted

—

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Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION