ISCR Case 23-01399

Case Headnote

ISCR Case No. 23-01399

deniedMay 1, 2024· Hon. Carol G. Ricciardello· hearing

Summary

A 38-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant delinquent debts totaling approximately $87,589. The applicant attributed these financial difficulties to a divorce and pandemic-related unemployment.

The Statement of Reasons detailed several specific debts. These included three credit card accounts, last used in 2019 for household expenses and cash advances, with balances of $26,906, $25,533, and $15,853. The applicant reported making a settlement agreement for one credit card debt for $14,043, with an initial payment of $50, and reaching a settlement for another for $10,762. Additionally, two personal loans, obtained in 2017 to pay down credit cards and student loans, were cited with balances of $12,060 and $7,067. A settlement of $4,824 was reached for one of these loans, and a $3,533 settlement was reached for the other, though payment was not made due to the account being outside the statute of limitations. The applicant also denied a $170 debt to a communications company for unreturned equipment.

The denial was based on the applicant's failure to provide sufficient evidence of responsible financial management or efforts to mitigate the debts. The judge found that the applicant's financial issues were exacerbated by living beyond his means prior to the pandemic and divorce, and he did not demonstrate a good-faith effort to repay creditors or provide evidence of settlement agreements.

Why the Applicant Was Denied

The applicant failed to provide evidence of responsible financial management or efforts to mitigate his debts.
The applicant's financial issues were exacerbated by living beyond his means prior to the pandemic and divorce.
The applicant did not demonstrate a good-faith effort to repay his creditors or provide evidence of settlement agreements.

Conditions Referenced

Disqualifying

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

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 issuedJul 28, 2023
Answer filedOct 4, 2023Applicant elected to have the case decided on the written record.
Hearing held—Decision made based on written record.
Decision dateMay 1, 2024

Cite For

Failure to Mitigate Financial Issues Under Guideline F
Insufficient Evidence of Responsible Financial Management
Lack of Good-faith Effort to Repay Debts

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	During Applicant’s background investigation, he was confronted by the government investigator with the accounts alleged in SOR ¶¶ 1.a ($26,906) and 1.b ($25,533). He explained that the debts in SOR ¶¶ 1.a, 1.b, and 1.c were credit cards last used in 2019 for household items, food, clothes, computers, and cash advances to make house and car payments. $26,906	Against Applicant	Credit Card Debt	Admitted	—	—	—
1.b	He explained that the debts in SOR ¶¶ 1.a, 1.b, and 1.c were credit cards last used in 2019 for household items, food, clothes, computers, and cash advances to make house and car payments. He made a settlement agreement with the creditor in SOR ¶ 1.b for $14,043 and said he made a first payment of $50. $25,533	Against Applicant	Credit Card Debt	Admitted	—	—	—
1.c	Applicant disclosed on his SCA the delinquent debts alleged in SOR ¶¶ 1.c ($15,853), 1.d ($12,060) and 1.e ($7,067). He made contact with the collection agency attorney for the debt in SOR ¶ 1.c. $15,853	Against Applicant	Credit Card Debt	Admitted	—	—	—
1.d	Applicant stated these were personal loans that he obtained in 2017 and used to pay down his credit cards and student loan debts. He stated that he had reached settlements with the creditors in SOR ¶¶ 1.a ($10,762) and 1.d ($4,824). $12,060	Against Applicant	Personal Loan Debt	Admitted	—	—	—
1.e	He disclosed on his SCA the delinquent debts alleged in SOR ¶¶ 1.c ($15,853), 1.d ($12,060) and 1.e ($7,067). For the debt in SOR ¶ 1.e, he said he had reached a settlement amount ($3,533) but the account no longer belonged to the original creditor and was outside of the statute of limitations, so he was unable to make a payment to the collector or the original creditor. $7,067	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f	He denied the debt in SOR ¶ 1.f ($170) owed to a communications company. He said it was alleged that he failed to return their equipment. $170	Against Applicant	Unspecified Financial	Denied	—	—	—
1.g	specific text not stated in this decision	Withdrawn	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

During Applicant’s background investigation, he was confronted by the government investigator with the accounts alleged in SOR ¶¶ 1.a ($26,906) and 1.b ($25,533). He explained that the debts in SOR ¶¶ 1.a, 1.b, and 1.c were credit cards last used in 2019 for household items, food, clothes, computers, and cash advances to make house and car payments.

$26,906

Against Applicant

Credit Card Debt

Admitted

—

1.b

He explained that the debts in SOR ¶¶ 1.a, 1.b, and 1.c were credit cards last used in 2019 for household items, food, clothes, computers, and cash advances to make house and car payments. He made a settlement agreement with the creditor in SOR ¶ 1.b for $14,043 and said he made a first payment of $50.

$25,533

Against Applicant

Credit Card Debt

Admitted

—

1.c

Applicant disclosed on his SCA the delinquent debts alleged in SOR ¶¶ 1.c ($15,853), 1.d ($12,060) and 1.e ($7,067). He made contact with the collection agency attorney for the debt in SOR ¶ 1.c.

$15,853

Against Applicant

Credit Card Debt

Admitted

—

1.d

Applicant stated these were personal loans that he obtained in 2017 and used to pay down his credit cards and student loan debts. He stated that he had reached settlements with the creditors in SOR ¶¶ 1.a ($10,762) and 1.d ($4,824).

$12,060

Against Applicant

Personal Loan Debt

Admitted

—

1.e

He disclosed on his SCA the delinquent debts alleged in SOR ¶¶ 1.c ($15,853), 1.d ($12,060) and 1.e ($7,067). For the debt in SOR ¶ 1.e, he said he had reached a settlement amount ($3,533) but the account no longer belonged to the original creditor and was outside of the statute of limitations, so he was unable to make a payment to the collector or the original creditor.

$7,067

Against Applicant

Unspecified Financial

Admitted

—

1.f

He denied the debt in SOR ¶ 1.f ($170) owed to a communications company. He said it was alleged that he failed to return their equipment.

$170

Against Applicant

Unspecified Financial

Denied

—

1.g

specific text not stated in this decision

Withdrawn

Unspecified Financial

Unknown

—

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Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision