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Summary

The applicant, a 32-year-old defense contractor and former U.S. Air Force member, faced security concerns under Guideline F due to significant financial issues, including a Chapter 13 bankruptcy and multiple delinquent accounts. The judge found that the applicant had made substantial progress in resolving his debts and demonstrated a commitment to financial responsibility, ultimately granting him eligibility for a security clearance.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant was ordered by one state to pay child support for his two children who later moved to another state, and then to still another state. He acknowledged that he was unable to make the full monthly payments, and an arrearage developed. The December 2016 credit report lists the unpaid balance as $28,910 and the past-due amount as $5,896 (1.a). Applicant is awaiting correspondence and an accounting regarding his continuing obligations from the most recent state of his ex-wife’s residence. The account is in the process of being resolved (1.b). a credit-union credit card with a $500 credit limit and unpaid and past-due balance of $642 that was charged off. The account was included in Applicant’s bankruptcy, and no claim was asserted. In other words, it was disallowed. Nevertheless, on September 28, 2017, Applicant paid the creditor $642.75. The account has been resolved (1.i). a medical account with an unidentified provider with an unpaid balance of $70. At the time of the service, Applicant presented the provider with his insurance card and paid a $60 co-pay. The insurance company paid its portion of the bill, and the unpaid balance was in dispute because the physician was unable to properly treat Applicant. Applicant paid the creditor $70 on September 26, 2017. The account has been resolved (1.j). three credit cards with unpaid balances of $4,973 (that went to judgment); $7,879; and $3,151. Applicant disputed the accounts, and he denied applying for the cards and did not authorize anyone to do so, or use them, in his name. In his e-QIP, Applicant contended that 'a relative' had applied for the cards, and during the hearing he identified the relative as his father. He chose not to officially dispute the accounts because he did not want his father to get charged with fraud. Applicant’s father testified and stated that when Applicant first joined the U.S. Air Force, he was struggling financially because he had no credit history. Without Applicant’s knowledge, he decided to assist his son by responding to some of the mail solicitations that offered credit. The purpose was to build up credit by making purchases in Applicant’s name and eventually pay them off. He paid off two or three accounts, but when the economic collapse of 2009 occurred, he lost both of his jobs, and his monthly income dropped from $10,000 down to $1,800, and no further payments could be made. He recommended that Applicant file for bankruptcy under Chapter 7, but Applicant chose to file under Chapter 13. To 'rectify' his guilt, he paid off Applicant’s vehicle for about $12,000. Although the three accounts were identified in the Chapter 13 bankruptcy, no payments were made to them by the Trustee. Applicant has not made any payments once the bankruptcy was dismissed. The accounts have not been resolved (1.l).

The judge granted the clearance. The government raised disqualifying conditions F.3, F.4. The judge applied mitigating conditions F.2, F.3, F.4. The decision turned on the following: The applicant resolved several delinquent accounts through payments and garnishments; He demonstrated a commitment to financial stability by managing his income and expenses effectively; The applicant's father provided testimony supporting his character and financial management efforts.

Why the Applicant Prevailed

• The applicant resolved several delinquent accounts through payments and garnishments.
• He demonstrated a commitment to financial stability by managing his income and expenses effectively.
• The applicant's father provided testimony supporting his character and financial management efforts.

Conditions Referenced

Key Rule Quoted

“The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.”

Procedural Posture

• SOR issuedFeb 10, 2017
• Answer filedMar 7, 2017
• Hearing heldAug 22, 2017
• Decision dateFeb 8, 2018

Cite For

• Mitigation of Financial Issues Under Guideline F
• Consideration of Personal Circumstances Affecting Financial Stability
• Demonstration of Good Faith Efforts to Resolve Debts