Summary
A 31-year-old federal government contractor applicant was denied a security clearance under Guideline F (Financial Considerations) due to significant financial difficulties. The applicant had 11 delinquent accounts totaling $52,914, including unpaid state taxes, consumer debts, medical accounts, a nearly $22,000 deficiency balance from a repossessed vehicle, an unpaid utility account, and over $32,000 in student loans.
The applicant filed for Chapter 7 bankruptcy in May 2017 after two years of reduced income. However, the bankruptcy case was still pending, and the debts remained unresolved at the time of the security clearance decision. The bankruptcy court had also issued an Order to Show Cause regarding the applicant's failure to pay the filing fee.
The denial was based on the applicant's failure to provide sufficient evidence of responsible financial management following hardship. The applicant did not demonstrate a good-faith effort to repay creditors or resolve debts before filing for bankruptcy, nor did they provide a budget to substantiate their current financial standing. There was also no evidence that the applicant was adhering to the bankruptcy court's rules for debt discharge.
Why the Applicant Was Denied
- The applicant failed to provide sufficient evidence of responsible financial management after experiencing financial hardship.
- The applicant's Chapter 7 bankruptcy was pending, and no debts had been discharged at the time of the decision.
- The applicant did not demonstrate a good-faith effort to repay overdue creditors or resolve debts prior to filing for bankruptcy.
Conditions Referenced
- F.1.araisedInability to Satisfy Debts
- F.1.braisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
- F.1.craisedA History of Not Meeting Financial Obligations
- F.2.brejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlWhile the applicant experienced financial hardship due to her husband's layoffs, she did not act responsibly under the circumstances.
- F.2.cappliedReceived Financial Counseling From a Legitimate Source
- F.2.drejectedGood-faith Effort to Repay Overdue CreditorsThe applicant did not provide evidence of adhering to bankruptcy court rules or making efforts to repay creditors.
Key Rule Quoted
“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”
Procedural Posture
- SOR issuedJun 7, 2017
- Answer filedJun 19, 2017Requested decision on the written record.
- Hearing held—No hearing; decision made on the written record.
- Decision dateJan 12, 2018
Cite For
- Insufficient Evidence of Responsible Financial Management Under Guideline F
- Impact of Pending Bankruptcy on Security Clearance Eligibility
- Criteria for Evaluating Financial Considerations in Security Clearance Cases