Summary
The applicant, a 50-year-old defense contractor and Navy veteran, faced security concerns under Guideline F due to a history of financial problems, including a Chapter 13 bankruptcy and several delinquent debts. The applicant successfully mitigated these concerns by demonstrating that his financial difficulties were largely beyond his control and that he has since stabilized his finances through bankruptcy and financial counseling. The judge granted eligibility for a security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant has a history of financial problems. He filed a Chapter 13 bankruptcy case in 2001. He completed the payments to the trustee, and any remaining dischargeable debts were discharged in 2006 (1.a). The SOR alleges the 2001 through 2006 Chapter 13 bankruptcy case and eight delinquent debts totaling about $62,000 (1.b). He had a side business that was adversely affected by an environmental disaster in 2010. Thereafter, he lost his full-time job and went through a divorce. He was unable to pay all his bills and a number of debts became delinquent (1.c). Applicant filed a claim with the corporation that caused the environmental disaster. He expected to use the proceeds from the claim to pay his debts. The claim was denied in February 2017 (1.d). Applicant filed a Chapter 7 bankruptcy case in February 2016. His dischargeable debts were discharged in November 2017 (1.e). He stated that his finances are currently stable. He uses what he learned through financial counseling. He is paying his student loans, which were not discharged in his bankruptcy (1.f). Applicant submitted documents and letters attesting to his excellent job performance. He is praised for his responsibility, honesty, trustworthiness, work ethic, patriotism, reliability, high morals and ethics, loyalty, leadership, dedication, and integrity (1.g). He admitted owing all the debts with the exception of the $47 unidentified medical debt alleged in SOR 1.h, which he paid (1.h).
The judge granted the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d). The decision turned on the following: The applicant's financial difficulties were largely beyond his control due to job loss and divorce; He successfully completed a Chapter 7 bankruptcy, discharging his debts and stabilizing his finances; The applicant demonstrated responsible behavior by seeking financial counseling and adhering to a budget.
Why the Applicant Prevailed
- The applicant's financial difficulties were largely beyond his control due to job loss and divorce.
- He successfully completed a Chapter 7 bankruptcy, discharging his debts and stabilizing his finances.
- The applicant demonstrated responsible behavior by seeking financial counseling and adhering to a budget.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 20(a)appliedBehavior Happened Long Ago or Infrequently
- AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
- AG ¶ 20(c)appliedReceived Financial Counseling
- AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe bankruptcy does not qualify as a good-faith effort to repay overdue creditors.
Key Rule Quoted
“The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.”
Procedural Posture
- SOR issuedMay 19, 2017
- Answer filedJul 11, 2017
- Hearing heldDec 7, 2017
- Decision dateFeb 28, 2018
Cite For
- Mitigation of Financial Concerns Under Guideline F
- Impact of Uncontrollable Circumstances on Financial Stability
- Importance of Financial Counseling in Resolving Debts