Summary
A Department of Defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of significant delinquent debts. The applicant's Statement of Reasons detailed a Chapter 13 bankruptcy filed in May 2015 and dismissed in June 2016, along with numerous outstanding debts. These included a delinquent student loan of approximately $28,008, delinquent child support of approximately $14,846, and a $2,065 judgment for a broken apartment lease. Other debts included a $8,076 charged-off car loan, a $6,347 charged-off account, and several smaller collection accounts ranging from $105 to $3,128.
The judge found that the applicant had a history of approximately $64,380 in delinquent debts. The Chapter 13 bankruptcy was dismissed due to a failure to make timely payments, and a subsequent Chapter 7 bankruptcy did not discharge the child support or student loan obligations.
Despite the application of mitigating conditions, the clearance was denied because the applicant's financial problems were ongoing, and he had not demonstrated a consistent effort to resolve his debts.
Why the Applicant Was Denied
- The applicant has a history of significant delinquent debts totaling approximately $64,380, including child support and student loans.
- The applicant's Chapter 13 bankruptcy was dismissed due to failure to make timely payments, and he subsequently filed for Chapter 7 bankruptcy, which does not discharge child support or student loans.
- The applicant's financial problems are ongoing, and he has not demonstrated a consistent effort to resolve his debts.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
- AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe applicant's financial situation was adversely affected by a four-month period of unemployment due to a federal government furlough.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant's bankruptcy filing does not constitute a good-faith effort to repay overdue creditors.
Key Rule Quoted
“An applicant is not required to be debt free, but is required to manage his finances in such a way as to meet his financial obligations.”
Procedural Posture
- SOR issuedAug 1, 2017
- Answer filedSep 29, 2017
- Hearing heldSep 10, 2018
- Decision dateOct 24, 2018
Cite For
- Denial of Security Clearance Due to Significant Financial Issues Under Guideline F
- Impact of Ongoing Financial Obligations on Security Clearance Eligibility
- Insufficient Evidence of Responsible Financial Management in Bankruptcy Cases