ISCR Case 16-00598.h1

Case Headnote

ISCR Case No. 16-00598.h1

deniedDec 1, 2017· Hon. Marc E. Curry· hearing

Summary

A 55-year-old Navy veteran was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant had filed for Chapter 13 bankruptcy in December 2014, including approximately $55,000 in debt, with a plan to pay $880 monthly. However, the bankruptcy was dismissed in September 2015 due to the applicant's failure to make consistent payments.

Additionally, the applicant owed about $4,000 in delinquent state income taxes for 2012 and 2013, which he began addressing with monthly payments of $232 as of February 2015. A $30,680 dental debt was disputed by the applicant and subsequently confirmed as paid by the dentist who purchased the original practice. However, other miscellaneous judgments totaling approximately $16,000 remained outstanding.

The denial was based on the applicant's failure to comply with the bankruptcy plan, the history of unresolved debts, and insufficient documentation regarding the status of his financial obligations. While some efforts were made to address specific debts, the overall financial concerns were not mitigated.

Why the Applicant Was Denied

Applicant failed to comply with the Chapter 13 bankruptcy plan, resulting in its dismissal.
Applicant has a history of unresolved debts totaling approximately $16,000.
Applicant did not provide sufficient evidence regarding the status of his financial obligations.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns or Failure to Pay Annual Federal, State, or Local Income Tax as Required

Mitigating

AG ¶ 20(g)appliedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those Arrangements
AG ¶ 20(e)appliedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due Debt Which Is the Cause of the Problem and Provides Documented Proof to Substantiate the Basis of the Dispute or Provides Evidence of Actions to Resolve the Issue

Key Rule Quoted

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

Procedural Posture

SOR issuedAug 9, 2016
Answer filedSep 14, 2016Applicant requested a decision on the written record.
Hearing held—No hearing; decision based on written record.
Decision dateDec 1, 2017

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Impact of Dismissed Bankruptcy on Security Clearance Eligibility
Importance of Providing Evidence for Financial Obligations in 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 filed for Chapter 13 bankruptcy protection in December 2014, as alleged in subparagraph 1.a. Approximately $55,000 of debt was included in the plan. Under the terms of the plan, $880 per month was to be disbursed to the creditors through the bankruptcy plan. On September 10, 2015, the court dismissed the bankruptcy because of Applicant’s failure to make good-faith payments consistent with the plan. $55,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Subparagraph 1.b: Against Applicant	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Currently, Applicant owes approximately $4,000 in delinquent state income taxes for tax years 2012 and 2013, as alleged in subparagraph 1.c. As of at least February 2015, he has been paying the state revenue authority, per an agreement, $232 each month. $4,000	For Applicant	Tax Unpaid	Admitted	(f) failure to file / fraudulent filing of tax returns or unpaid tax	(g) arrangements made with the tax authority; in compliance	—
1.d	Subparagraph 1.d alleges a delinquency for $30,680 of dental work. Applicant denies this debt, and contends that all of his dental bills were paid upon the completion of the dental work. Applicant’s dentist is retired. The dentist who purchased the practice researched Applicant’s account and confirmed that he owed no money. $30,680	For Applicant	Unspecified Financial	Denied	—	(e) reasonable, documented basis to dispute the debt	Documented Debt Disputed with Creditor
1.e	Subparagraph 1.e through 1.j are miscellaneous judgments entered against Applicant in favor of various creditors, totaling approximately $16,000. They remain outstanding. $16,000	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f–1.j	5 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed for Chapter 13 bankruptcy protection in December 2014, as alleged in subparagraph 1.a. Approximately $55,000 of debt was included in the plan. Under the terms of the plan, $880 per month was to be disbursed to the creditors through the bankruptcy plan. On September 10, 2015, the court dismissed the bankruptcy because of Applicant’s failure to make good-faith payments consistent with the plan.

$55,000

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

Subparagraph 1.b: Against Applicant

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Currently, Applicant owes approximately $4,000 in delinquent state income taxes for tax years 2012 and 2013, as alleged in subparagraph 1.c. As of at least February 2015, he has been paying the state revenue authority, per an agreement, $232 each month.

$4,000

For Applicant

Tax Unpaid

Admitted

(f) failure to file / fraudulent filing of tax returns or unpaid tax

(g) arrangements made with the tax authority; in compliance

—

1.d

Subparagraph 1.d alleges a delinquency for $30,680 of dental work. Applicant denies this debt, and contends that all of his dental bills were paid upon the completion of the dental work. Applicant’s dentist is retired. The dentist who purchased the practice researched Applicant’s account and confirmed that he owed no money.

$30,680

For Applicant

Unspecified Financial

Denied

—

(e) reasonable, documented basis to dispute the debt

Documented

Debt Disputed with Creditor

1.e

Subparagraph 1.e through 1.j are miscellaneous judgments entered against Applicant in favor of various creditors, totaling approximately $16,000. They remain outstanding.

$16,000

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f–1.j

5 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)

Against Applicant

—

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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

FOOTNOTES