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Summary

The applicant, a 36-year-old team lead instructor for a defense contractor, faced security clearance concerns under Guideline F due to over $28,000 in delinquent financial obligations, including unpaid judgments and collection accounts. The judge found that the applicant had mitigated these concerns through responsible financial management, including payments made towards debts and evidence of improved financial stability following a legal separation from his wife, who had contributed to his financial difficulties.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant incurred a $5,541 charged-off account resulting from a vehicle accident in which the vehicle was a total loss. The charged-off amount resulted from a gap in his insurance coverage. The creditor has since stated there was a mistake as to the gap insurance, and the debt would be removed from his credit report (1.a). In July 2017, he paid the $83 medical debt (1.b). The $70 Wi-Fi account was paid in full to the original creditor after the check sent to the collection agency was returned (1.c). Applicant had three medical collection accounts: SOR 1.d ($34), SOR 1.e ($143), and SOR 1.f ($722), which were the result of treatment when Applicant fractured his ankle. He sent money orders to cover the $143 and $722 debts. The collection agency was unable to process the $143 money order because the collection agency had closed the account. As of July 19, 2017, the collection agency collecting the $722 debt indicated their records indicated the account was paid (1.d). Applicant had three medical collection accounts: SOR 1.d ($34), SOR 1.e ($143), and SOR 1.f ($722), which were the result of treatment when Applicant fractured his ankle. He sent money orders to cover the $143 and $722 debts. The collection agency was unable to process the $143 money order because the collection agency had closed the account. As of July 19, 2017, the collection agency collecting the $722 debt indicated their records indicated the account was paid (1.e). Applicant had three medical collection accounts: SOR 1.d ($34), SOR 1.e ($143), and SOR 1.f ($722), which were the result of treatment when Applicant fractured his ankle. He sent money orders to cover the $143 and $722 debts. The collection agency was unable to process the $143 money order because the collection agency had closed the account. As of July 19, 2017, the collection agency collecting the $722 debt indicated their records indicated the account was paid (1.f). Since early 2016, Applicant has been in contact with the credit union attempting to resolve the $10,516 charged-off debt. The debt resulted from a vehicle accident when another driver ran a red light and struck Applicant’s vehicle. In November 2017, the credit union offered to settle the debt, then $7,437, for $2,231. He agreed to make six monthly payments of $371 each. At the time of the hearing, he had made three of the six required payments (1.g). The $369 debt resulted from an old checking account. In July 2017, Applicant paid the debt (1.h). The $7,796 charged-off credit union account related to his wife’s vehicle. It was repossessed during a period of time when he was unemployed. Since 2016, he has attempted to reach a settlement with the credit union (1.i). He incurred a $1,270 telephone collection account. In July 2017, the creditor offered to settle the matter for $423. He paid the amount the creditor sought, and the creditor removed the debt from his credit report (1.j). A credit union charged off a $984 debt. The creditor offered to settle the matter for $606, and Applicant accepted and paid the debt in July 2017 (1.k). A homeowners’ association obtained two judgments against him in the amounts of $331 for HOA dues. When the delinquent obligations were incurred, he was unemployed, and his VA disability payments had not commenced. In July 2017, he paid the $320 judgment (1.l). A homeowners’ association obtained two judgments against him in the amounts of $320 for HOA dues. When the delinquent obligations were incurred, he was unemployed, and his VA disability payments had not commenced. In July 2017, he paid the $320 judgment (1.m). In January 2018, he accepted and paid the settlement offer by the collection agency relating to the $417 medical debt (1.n). In July 2017, he also paid the $12 medical debt (1.o).

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 demonstrated a good-faith effort to repay overdue creditors and resolve debts; The applicant's financial issues were largely due to circumstances beyond his control, including unemployment and a spouse's financial irresponsibility; The applicant has shown improvement in his financial situation, maintaining current payments on obligations and achieving a fair credit score.

Why the Applicant Prevailed

• The applicant demonstrated a good-faith effort to repay overdue creditors and resolve debts.
• The applicant's financial issues were largely due to circumstances beyond his control, including unemployment and a spouse's financial irresponsibility.
• The applicant has shown improvement in his financial situation, maintaining current payments on obligations and achieving a fair credit score.

Conditions Referenced

Key Rule Quoted

“An individual is not required to be debt-free, but is required to manage his finances to meet his financial obligations.”

Procedural Posture

• SOR issuedJun 6, 2017
• Answer filedJul 19, 2017
• Hearing heldFeb 27, 2018
• Decision dateOct 19, 2018

Cite For

• Mitigation of Financial Issues Under Guideline F
• Impact of Personal Circumstances on Financial Obligations
• Importance of Good-faith Efforts in Debt Repayment