ISCR Case 16-02488.h1

Case Headnote

ISCR Case No. 16-02488.h1

grantedMay 9, 2018· Hon. Arthur E. Marshall, Jr.· hearing

Summary

A 51-year-old defense contractor analyst was granted a security clearance despite concerns under Guideline F (Financial Considerations). The Statement of Reasons detailed several financial issues, including a past-due mortgage of $91,751 on a $412,572 balance, multiple collection accounts (some paid, some in dispute, and others with repayment plans developing), and a voluntarily abandoned Chapter 13 bankruptcy filing from January 2012. Additional concerns included a satisfied federal tax lien of $7,491 from February 2012, late filing of 2010 state and federal tax returns, and a $1,000 balance owed to a state taxing authority for which a repayment plan was being developed. The applicant also acknowledged a history of gambling since young adulthood.

The applicant attributed her financial difficulties to managing her late father's estate, high college costs for her daughter, and periods of unemployment. The judge found that she had mitigated the financial concerns by demonstrating a commitment to resolving her debts.

This commitment included a significant reduction in mortgage debt through a loan modification, evidence of financial counseling, and good-faith efforts to repay overdue creditors. The judge concluded that the financial difficulties were largely due to circumstances beyond her control, leading to the decision to grant the security clearance.

Why the Applicant Prevailed

The applicant demonstrated a commitment to resolving her financial issues, including a significant reduction in mortgage debt through a loan modification.
She provided evidence of financial counseling and a good-faith effort to repay overdue creditors.
The applicant's financial difficulties were largely attributed to circumstances beyond her control, such as managing her late father's estate and unexpected college costs.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Income Tax Returns
AG ¶ 19(h)raisedBorrowing Money or Engaging in Significant Financial Transactions to Fund Gambling

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling for the Problem
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)appliedReasonable Basis to Dispute Legitimacy of Past-due Debt

Key Rule Quoted

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

Procedural Posture

SOR issuedOct 23, 2016
Answer filedundated
Hearing heldJun 14, 2017
Decision dateMay 9, 2018

Cite For

Mitigation of Financial Issues Under Guideline F Due to Circumstances Beyond the Applicant's Control
Importance of Financial Counseling in Addressing Security Concerns
Demonstrating Good-faith Efforts to Resolve Debts as a Mitigating Factor

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	Past-due mortgage ($91,751 on total balance of $412,572) – In repayment. $91,751	For Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor
1.b	Collection account ($1,356) – In dispute. $1,356	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Disputed with Creditor
1.c	Collection account ($608) – Paid. $608	For Applicant	Unspecified Financial	Admitted	—	—	Documented Debt Paid in Full
1.d	Chapter 13 bankruptcy filing from January 2012 – Voluntarily abandoned.	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Documented Debt Paid in Full
1.e	Collection accounts ($1,519 and $1,519, respectively) – In dispute. $1,519	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Disputed with Creditor
1.f	Collection accounts ($1,519 and $1,519, respectively) – In dispute. $1,519	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Disputed with Creditor
1.g	Telecommunications collection ($505) – Developing repayment plan. $505	For Applicant	Utility or Phone Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Payment Plan with Creditor
1.h	Medical collection accounts ($206 and $45, respectively). In dispute/Paid. $206	For Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Documented Debt Paid in Full Claimed Debt Disputed with Creditor
1.i	Medical collection accounts ($206 and $45, respectively). In dispute/Paid. $45	For Applicant	Medical Debt	Admitted	—	—	Documented Debt Paid in Full
1.j	Applicant has gambled since she was a young adult.	For Applicant	Gambling Losses	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.k	Federal tax lien entered in February 2012 ($7,491). Satisfied. $7,491	For Applicant	Tax Unpaid	Admitted	—	—	Documented Debt Paid in Full
1.l	Failure to timely file state and federal income tax returns for TY 2010. – Filed late.	For Applicant	Tax Filing Failure	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Balance owed ($1,000) to state taxing authority. Developing repayment plan. $1,000	For Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Payment Plan with IRS

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Past-due mortgage ($91,751 on total balance of $412,572) – In repayment.

$91,751

For Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

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

Documented

Debt Paid in Full

Documented

Payment Plan with Creditor

1.b

Collection account ($1,356) – In dispute.

$1,356

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Disputed with Creditor

1.c

Collection account ($608) – Paid.

$608

For Applicant

Unspecified Financial

Admitted

—

Documented

Debt Paid in Full

1.d

Chapter 13 bankruptcy filing from January 2012 – Voluntarily abandoned.

For Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Documented

Debt Paid in Full

1.e

Collection accounts ($1,519 and $1,519, respectively) – In dispute.

$1,519

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Disputed with Creditor

1.f

Collection accounts ($1,519 and $1,519, respectively) – In dispute.

$1,519

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Disputed with Creditor

1.g

Telecommunications collection ($505) – Developing repayment plan.

$505

For Applicant

Utility or Phone Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Payment Plan with Creditor

1.h

Medical collection accounts ($206 and $45, respectively). In dispute/Paid.

$206

For Applicant

Medical Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Documented

Debt Paid in Full

Claimed

Debt Disputed with Creditor

1.i

Medical collection accounts ($206 and $45, respectively). In dispute/Paid.

$45

For Applicant

Medical Debt

Admitted

—

Documented

Debt Paid in Full

1.j

Applicant has gambled since she was a young adult.

For Applicant

Gambling Losses

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.k

Federal tax lien entered in February 2012 ($7,491). Satisfied.

$7,491

For Applicant

Tax Unpaid

Admitted

—

Documented

Debt Paid in Full

1.l

Failure to timely file state and federal income tax returns for TY 2010. – Filed late.

For Applicant

Tax Filing Failure

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.m

Balance owed ($1,000) to state taxing authority. Developing repayment plan.

$1,000

For Applicant

Tax Unpaid

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Payment Plan with IRS

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Case Profile

Summary

Why the Applicant Prevailed

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