ISCR Case 17-01866.h1

Case Headnote

ISCR Case No. 17-01866.h1

deniedOct 5, 2018· Hon. Gregg A. Cervi· hearing

Summary

A 58-year-old mental health professional was denied a security clearance due to unresolved financial issues under Guideline F (Financial Considerations). The applicant had delinquent debts totaling approximately $20,667. Specific concerns included a $56 credit card debt, which was paid in August 2017, and a state A tax lien for $2,845 from 2016. While the applicant disputed the tax debt and provided some documentation, its current status remained unclear on a November 2017 credit report.

Further issues involved an unpaid judgment from state A for $9,542, stemming from an overpayment of unemployment benefits in 2009 and 2010. The applicant did not respond to the judgment notice in 2011, claiming he had moved out of state, and provided no evidence of a claimed 2017 payment. Additionally, credit card debts totaling $8,224 were noted, with some becoming delinquent in 2009 and others in 2016. The applicant claimed these were charged off and no longer active, but provided no evidence of attempts to resolve them.

The denial was based on the applicant's unresolved debts, which raised concerns about reliability and judgment. The applicant failed to provide sufficient documentation of good-faith efforts to resolve these debts, and his financial status appeared unstable, with no evidence of seeking financial assistance or counseling.

Why the Applicant Was Denied

The applicant has unresolved debts that raise concerns about his reliability and judgment.
He failed to provide sufficient documentation of good-faith efforts to resolve his debts.
The applicant's financial status appears unstable, and he has not sought financial assistance or counseling.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)rejectedConditions That Resulted in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(c)rejectedReceived Financial Counseling From a Legitimate Source
AG ¶ 20(d)rejectedInitiated and Adhered to a Good-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

“An applicant has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.”
— ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002)

Procedural Posture

SOR issuedJul 26, 2017
Answer filed—Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on written record.
Decision dateOct 5, 2018

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Insufficient Evidence of Financial Stability and Good-faith Efforts to Resolve Debts
Impact of Financial Issues on Reliability and Judgment Under Guideline F

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	SOR ¶ 1.a is a small credit card debt for $56. Once notified of the debt, Applicant paid it in August 2017. This account is resolved. $56	For Applicant	Credit Card Debt	Admitted	—	—	—
1.b	SOR ¶ 1.b is a tax lien placed by state A in 2016. Applicant acknowledged living and working in state A, but when he moved to state B in 2011, he continued to receive tax notices from state A. In September 2016, Applicant notified state A that he disputed the tax debt and provided some but not all documentation showing his residence and employment in state B for the years in question. It is unclear what the current status is with the state A tax obligation, as Applicant’s November 2017 credit report continues to show an unresolved $2,845 tax lien from state A. However, Applicant has taken adequate measures to address the state tax delinquency and has provided sufficient documentation to state A to refute the debt. This account is being resolved. $2,845	For Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts	(e) reasonable, documented basis to dispute the debt	—
1.c	SOR ¶ 1.c is an unpaid judgment from state A to recoup overpayment of state unemployment benefits. Applicant applied for and began receiving state unemployment benefits in 2009 and 2010. At some point, Applicant did not correctly disclose his dates of re-employment, resulting in an overpayment. In 2011, the state sent Applicant a notice of the judgment filing for $9,542, but Applicant did not respond to the court because he had moved out of state. The judgment remained delinquent thereafter. In his Answer to the SOR, he claimed he paid 10% of the balance in 2017, but did not provide evidence of such payment. He stated that since this judgment debt does not incur interest charges, he typically pays other obligations that incur interest before this debt. $9,542	Against Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	SOR ¶ 1.d are credit card debts totaling $8,224. Applicant noted in his Answer that during the recession, he was unable to pay these debts, but claimed they are no longer active because they have been charged off. These collection accounts are recorded in Applicant’s 2016 credit report (GE 7) and show one account becoming delinquent in 2009, while two others show delinquencies beginning in 2016. Three smaller collection accounts with the same lender as alleged in SOR ¶¶ 1.e and 1.f, became delinquent in 2010, but are not alleged in the SOR. Applicant asserts that the delinquent accounts no longer appear on his 2017 credit report and are not active debts. No evidence of attempts to resolve the debts was provided. $8,224	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e–1.f	2 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

SOR ¶ 1.a is a small credit card debt for $56. Once notified of the debt, Applicant paid it in August 2017. This account is resolved.

$56

For Applicant

Credit Card Debt

Admitted

—

1.b

SOR ¶ 1.b is a tax lien placed by state A in 2016. Applicant acknowledged living and working in state A, but when he moved to state B in 2011, he continued to receive tax notices from state A. In September 2016, Applicant notified state A that he disputed the tax debt and provided some but not all documentation showing his residence and employment in state B for the years in question. It is unclear what the current status is with the state A tax obligation, as Applicant’s November 2017 credit report continues to show an unresolved $2,845 tax lien from state A. However, Applicant has taken adequate measures to address the state tax delinquency and has provided sufficient documentation to state A to refute the debt. This account is being resolved.

$2,845

For Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(e) reasonable, documented basis to dispute the debt

—

1.c

SOR ¶ 1.c is an unpaid judgment from state A to recoup overpayment of state unemployment benefits. Applicant applied for and began receiving state unemployment benefits in 2009 and 2010. At some point, Applicant did not correctly disclose his dates of re-employment, resulting in an overpayment. In 2011, the state sent Applicant a notice of the judgment filing for $9,542, but Applicant did not respond to the court because he had moved out of state. The judgment remained delinquent thereafter. In his Answer to the SOR, he claimed he paid 10% of the balance in 2017, but did not provide evidence of such payment. He stated that since this judgment debt does not incur interest charges, he typically pays other obligations that incur interest before this debt.

$9,542

Against Applicant

Judgment Against Applicant

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

SOR ¶ 1.d are credit card debts totaling $8,224. Applicant noted in his Answer that during the recession, he was unable to pay these debts, but claimed they are no longer active because they have been charged off. These collection accounts are recorded in Applicant’s 2016 credit report (GE 7) and show one account becoming delinquent in 2009, while two others show delinquencies beginning in 2016. Three smaller collection accounts with the same lender as alleged in SOR ¶¶ 1.e and 1.f, became delinquent in 2010, but are not alleged in the SOR. Applicant asserts that the delinquent accounts no longer appear on his 2017 credit report and are not active debts. No evidence of attempts to resolve the debts was provided.

$8,224

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.e–1.f

2 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

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES