ISCR Case 21-00907

Case Headnote

ISCR Case No. 21-00907

deniedAug 31, 2022· Hon. Darlene Lokey Anderson· hearing

Summary

A 48-year-old Account Manager was denied a security clearance under Guideline F (Financial Considerations) due to approximately $50,000 in delinquent debts. The Statement of Reasons detailed six financial allegations. The applicant had resolved some smaller debts, including a $7,138 collection account settled for $4,289 on December 21, 2021, and a $3,500 timeshare debt discharged in 2018, resulting in a $3,376 Cancellation of Debt. Another bank account, initially $2,489, was largely settled through payments of $1,000 and $1,489.37 in October 2021, leaving a remaining balance of $181.

However, the applicant still owed two significant charged-off credit card debts: one for approximately $16,235 and another for about $13,814, for which an attorney was hired in January 2020. A $7,000 debt was contended to be the same as a previously resolved account.

The denial was based on the applicant's failure to mitigate the two largest outstanding debts, totaling approximately $29,000. Despite an increase in income, the applicant did not provide sufficient evidence of resolving these charged-off debts, leading the administrative judge to conclude that the financial concerns regarding reliability and trustworthiness were not overcome.

Why the Applicant Was Denied

The applicant failed to demonstrate sufficient mitigation for the two largest debts totaling approximately $29,000.
The applicant did not provide evidence showing that he resolved the debts of concern, which were charged off and still owed.
Despite a significant increase in income, the applicant did not pay or resolve the largest debts, indicating a lack of responsibility.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened Long Ago or InfrequentlyThe applicant's financial issues were recent and ongoing.
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlWhile the applicant faced financial hardship, he did not resolve the largest debts.
AG ¶ 20(d)rejectedGood Faith Effort to Repay DebtsThe applicant did not provide evidence of resolving the largest debts.

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedDec 7, 2021
Answer filedFeb 9, 2022
Hearing heldJul 19, 2022
Decision dateAug 31, 2022

Cite For

Insufficient Evidence of Debt Resolution Under Guideline F
Failure to Mitigate Financial Concerns Despite Increased Income
Importance of Demonstrating Financial Responsibility for Security Clearance Eligibility

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 was indebted to a creditor for an account that was placed for collection in the approximate amount of $7,138. Applicant contacted the creditor and settled the debt on December 21, 2021, for $4,289. The debt is no longer owing. $7,138	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant was indebted to a resort for an account that was charged off in the approximate amount of $3,500. This was for a timeshare that Applicant purchased. Applicant was issued a 1099-C (Cancellation of Debt) for tax year 2018, and the amount of the debt discharged was $3,376. The debt is no longer owing. $3,500	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant was indebted to a bank for an account that was charged off in the approximate amount of $2,489. Applicant submitted a receipt showing that the account was agreed to be settled on October 20, 2021. On October 19, 2021, Applicant made a payment of $1,000 to the creditor. A second payment was made on October 29, 2021, in the amount of $1,489.37. The remaining balance owed is $181. $2,489	For Applicant	Unspecified Financial	Admitted	—	—	—
1.d	Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $16,235. Applicant stated that this is a delinquent credit card debt. Applicant’s credit report dated July 2022 shows that the debt was charged off. The debt remains owing. $16,235	Against Applicant	Credit Card Debt	Admitted	(b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $13,814. Applicant stated that this was a delinquent credit card debt. Applicant stated that he hired an attorney on January 20, 2020, to assist with settling the debt. The debt remains owing. $13,814	Against Applicant	Credit Card Debt	Admitted	(b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $7,000. Applicant contends that this is the same debt as the one set forth in paragraph 1.a. The debt is no longer owing. $7,000	For Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant was indebted to a creditor for an account that was placed for collection in the approximate amount of $7,138. Applicant contacted the creditor and settled the debt on December 21, 2021, for $4,289. The debt is no longer owing.

$7,138

Against Applicant

Unspecified Financial

Admitted

—

1.b

Applicant was indebted to a resort for an account that was charged off in the approximate amount of $3,500. This was for a timeshare that Applicant purchased. Applicant was issued a 1099-C (Cancellation of Debt) for tax year 2018, and the amount of the debt discharged was $3,376. The debt is no longer owing.

$3,500

For Applicant

Unspecified Financial

Admitted

—

1.c

Applicant was indebted to a bank for an account that was charged off in the approximate amount of $2,489. Applicant submitted a receipt showing that the account was agreed to be settled on October 20, 2021. On October 19, 2021, Applicant made a payment of $1,000 to the creditor. A second payment was made on October 29, 2021, in the amount of $1,489.37. The remaining balance owed is $181.

$2,489

For Applicant

Unspecified Financial

Admitted

—

1.d

Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $16,235. Applicant stated that this is a delinquent credit card debt. Applicant’s credit report dated July 2022 shows that the debt was charged off. The debt remains owing.

$16,235

Against Applicant

Credit Card Debt

Admitted

(b) unwillingness to satisfy debts regardless of ability

—

1.e

Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $13,814. Applicant stated that this was a delinquent credit card debt. Applicant stated that he hired an attorney on January 20, 2020, to assist with settling the debt. The debt remains owing.

$13,814

Against Applicant

Credit Card Debt

Admitted

(b) unwillingness to satisfy debts regardless of ability

—

1.f

Applicant is indebted to a creditor for an account that was charged off in the approximate amount of $7,000. Applicant contends that this is the same debt as the one set forth in paragraph 1.a. The debt is no longer owing.

$7,000

For 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