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Summary

The applicant, a 41-year-old DOD contractor, faced security clearance denial under Guideline F due to financial irresponsibility, including 22 delinquent accounts totaling approximately $50,950 and two bankruptcies. Despite some debts being disputed and resolved, many remain unresolved, leading the judge to conclude that her financial issues were ongoing and insufficiently managed, resulting in the denial of her security clearance.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: $11,325 delinquent account placed for collection. Applicant claims she was the second signer on this car loan. The car was repossessed. The debt is not paid. She is trying to settle this account. The debt remains unresolved (1.a). $10,172 balance due as a result of a car repossession. Applicant testified that this was a voluntary car repossession. She claims the car was a lemon and she turned it in after repeatedly having to have the car repaired. She believes that she does not owe anything, but did not provide documentation to verify that the account is resolved. The debt remains unresolved (1.b). $9,818 balance due as a result of a car repossession. Applicant testified that this was a voluntary car repossession. She claims the car was a lemon and she turned it in after repeatedly having to have the car repaired at the dealership. She believes that she does not owe anything, but did not provide documentation to verify that this account is resolved. The debt remains unresolved (1.c). $3,582 delinquent medical account that was placed for collection. Applicant testified that this debt was no longer on her credit report. The debt is listed on a credit report, dated April 21, 2021. It was not resolved at the time, but it noted Applicant disputed the debt. It does not appear to be on Applicant’s most recent credit reports dated in early January 2023 (1.d). $3,176 charged-off furniture store account. Applicant rented this furniture as rent to own. She notified the company that she was moving and they could pick up the furniture. The furniture store never picked up the furniture. The debt remains unresolved (1.e). $2,287 student loan account placed for collection. Applicant provided proof that her debt resolution company was able to successfully dispute this debt with the credit reporting agencies. It was removed from her credit report. It is not clear whether Applicant paid this loan (1.f). $1,626 student loan account placed for collection. Applicant provided proof that her debt resolution company was able to successfully dispute this debt with the credit reporting agencies. It was removed from her credit report. It is not clear whether Applicant paid this loan (1.g). $1,319 medical account that was placed for collection. Status unknown (1.h). $996 medical account that was placed for collection. Status unknown (1.i). $703 charged off utility account. Applicant intends to pay this debt but did not submit proof of payment or resolution. The debt remained unresolved at the close of the record (1.j). $460 charged off debt owed to a bank. Applicant provided proof that her debt resolution company successfully disputed this account to the credit reporting agencies. It was removed from her credit report (1.k). $431 delinquent account owed to a bank placed for collection. Status of this account is unknown (1.l). $316 charged off. Status of the debt is unknown (1.m). $170 medical account that was placed for collection. Status unknown (1.n). $166 medical account that was placed for collection. Status unknown (1.o). $123 medical account that was placed for collection. Status unknown (1.p). $102 medical account that was placed for collection. Status unknown (1.q). $69 medical account that was placed for collection. Status unknown (1.r). $63 medical account that was placed for collection. Status unknown (1.s). $50 medical account that was placed for collection. Status unknown (1.t). $1,250 delinquent furniture store account that was charged off. Applicant claims she purchased furniture for her mother. Her mother passed away and her sister took the furniture. She hopes to settle this account. Status of the account is unknown at the close of the record (1.u). $2,746 delinquent cell phone account placed for collection. Applicant disputes this account. She transferred to another cell phone company and does not believe the debt should be so large. Applicant’s debt resolution company successfully disputed this account with the credit reporting agencies. It was removed from her credit report (1.v).

The judge denied 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(e). The decision turned on the following: The applicant has a long history of financial problems, including two bankruptcies and numerous unresolved debts; The applicant did not demonstrate a good-faith effort to resolve her delinquent debts, instead waiting for the statute of limitations to expire; The applicant's financial issues raise concerns about her reliability and trustworthiness.

Why the Applicant Was Denied

• The applicant has a long history of financial problems, including two bankruptcies and numerous unresolved debts.
• The applicant did not demonstrate a good-faith effort to resolve her delinquent debts, instead waiting for the statute of limitations to expire.
• The applicant's financial issues raise concerns about her reliability and trustworthiness.

Conditions Referenced

Key Rule Quoted

“An applicant is not required to be debt free, but is required to manage his finances in such a way as to meet his financial obligations.”

Procedural Posture

• SOR issuedOct 5, 2021
• Answer filedOct 8, 2021
• Hearing heldJan 11, 2023
• Decision dateMar 24, 2023

Cite For

• Financial Irresponsibility Under Guideline F
• Impact of Unresolved Debts on Security Clearance Eligibility
• Consideration of Mitigating Conditions Related to Financial Issues