ISCR Case 14-03438.h1

Case Headnote

ISCR Case No. 14-03438.h1

grantedMay 12, 2015· Hon. Mary E. Henry· hearing

Summary

A 54-year-old manager for a DOD contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant's financial difficulties stemmed from job loss and medical issues. Allegations included an unresolved $22,852 credit card debt where the creditor refused negotiation, and an $11,711 credit card debt that remained unpaid after the creditor declined settlement discussions.

However, the applicant demonstrated significant efforts to resolve other debts. A $22,712 credit card debt was settled for $14,100, with 25 of 28 required payments made by September 2014, and the final payment in December 2014. Another $13,895 credit card debt was also settled through the same payment plan. A $20,645 credit card debt was resolved when the creditor issued a 1099-C cancellation of debt form for $18,009, which the applicant claimed as income. Additionally, a $2,951 furniture store account was paid off by March 2015.

The decision to grant the clearance was based on the applicant's good-faith efforts to resolve debts, the fact that financial issues were largely due to circumstances beyond his control, and the subsequent improvement in his and his wife's financial situation, including timely payments on current obligations.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to resolve debts through a debt resolution company.
The applicant's financial issues were largely due to circumstances beyond his control, including job loss and health problems.
The applicant and his wife have since improved their financial situation and maintained timely payments on their current obligations.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(e)raisedConsistent Spending Beyond One's Means

Mitigating

AG ¶ 20(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)appliedConditions That Resulted in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling for the Problem and Indications That the Problem Is Being Resolved
AG ¶ 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“The standard that must be met for . . . assignment to sensitive duties is that, based on all available information, the person’s loyalty, reliability, and trustworthiness are such that . . . assigning the person to sensitive duties is clearly consistent with the interests of national security.”

Procedural Posture

SOR issuedNov 21, 2014
Answer filedDec 4, 2014
Hearing heldMar 25, 2015
Decision dateMay 12, 2015

Cite For

Mitigating Conditions Under Guideline F for Financial Considerations
Impact of Circumstances Beyond Control on Financial Issues
Good-faith Efforts in Debt Resolution and Financial Management

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 allegation 1.a concerns a credit card debt to a bank for $22,852. Applicant provided the debt resolution company information about this debt. The creditor refused to work with the debt resolution company. In 2011, Applicant spoke with the creditor independently, and the creditor refused to negotiate a settlement. This debt remains unresolved. $22,852	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	—
1.b	SOR allegations 1.b ($22,712) and 1.d ($13,895) concern two credit cards with the same creditor. The creditor sold both debts to debt collectors. Through the debt resolution company, Applicant settled the larger debt with the collection creditor for $14,100. The settlement terms required an initial payment of $2,000, which was made in August 2012, and monthly payments of $450 until paid. Applicant provided documentation indicating that of 28 the required payments, 25 were made through the debt resolution company by September 2014. He made the last payment on this debt in December 2014. The creditor has not yet provided verification, advising Applicant that it takes about six months to provide the notification. $22,712	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	—
1.c	The $20,645 debt in SOR allegation 1.c relates to a credit card. The creditor provided Applicant with a 1099-C cancellation of debt form for $18,009 in 2012. Applicant claimed this amount as income for taxes in 2012. This debt is resolved. $20,645	For Applicant	Credit Card Debt	Admitted	—	—	—
1.d	SOR allegations 1.b ($22,712) and 1.d ($13,895) concern two credit cards with the same creditor. The creditor sold both debts to debt collectors. Through the debt resolution company, Applicant settled the larger debt with the collection creditor for $14,100. The settlement terms required an initial payment of $2,000, which was made in August 2012, and monthly payments of $450 until paid. Applicant provided documentation indicating that of 28 the required payments, 25 were made through the debt resolution company by September 2014. He made the last payment on this debt in December 2014. The creditor has not yet provided verification, advising Applicant that it takes about six months to provide the notification. $13,895	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	—
1.e	SOR allegation 1.e ($11,711) relates to another credit card debt. Applicant had his checking accounts and an equity line of credit with this creditor. He spoke with the creditor on two separate occasions about resolving this debt since he continued to conduct his banking needs with it. The creditor refused to discuss a settlement of the debt and has not issued a 1099-C form. This debt remains unpaid. $11,711	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The last SOR allegation 1.f ($2,951) concerns a furniture store account. Applicant paid this debt, as shown by the March 2015 credit reports. The March 2015 Experian credit report shows eight payments totaling $2,100 to the creditor through the debt resolution company. This debt is resolved. $2,951	For Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

SOR allegation 1.a concerns a credit card debt to a bank for $22,852. Applicant provided the debt resolution company information about this debt. The creditor refused to work with the debt resolution company. In 2011, Applicant spoke with the creditor independently, and the creditor refused to negotiate a settlement. This debt remains unresolved.

$22,852

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

—

1.b

SOR allegations 1.b ($22,712) and 1.d ($13,895) concern two credit cards with the same creditor. The creditor sold both debts to debt collectors. Through the debt resolution company, Applicant settled the larger debt with the collection creditor for $14,100. The settlement terms required an initial payment of $2,000, which was made in August 2012, and monthly payments of $450 until paid. Applicant provided documentation indicating that of 28 the required payments, 25 were made through the debt resolution company by September 2014. He made the last payment on this debt in December 2014. The creditor has not yet provided verification, advising Applicant that it takes about six months to provide the notification.

$22,712

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

—

1.c

The $20,645 debt in SOR allegation 1.c relates to a credit card. The creditor provided Applicant with a 1099-C cancellation of debt form for $18,009 in 2012. Applicant claimed this amount as income for taxes in 2012. This debt is resolved.

$20,645

For Applicant

Credit Card Debt

Admitted

—

1.d

$13,895

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

—

1.e

SOR allegation 1.e ($11,711) relates to another credit card debt. Applicant had his checking accounts and an equity line of credit with this creditor. He spoke with the creditor on two separate occasions about resolving this debt since he continued to conduct his banking needs with it. The creditor refused to discuss a settlement of the debt and has not issued a 1099-C form. This debt remains unpaid.

$11,711

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

The last SOR allegation 1.f ($2,951) concerns a furniture store account. Applicant paid this debt, as shown by the March 2015 credit reports. The March 2015 Experian credit report shows eight payments totaling $2,100 to the creditor through the debt resolution company. This debt is resolved.

$2,951

For Applicant

Unspecified Financial

Admitted

—

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Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

PROCEDURAL RULINGS

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION