ISCR Case 14-03343.h1

Case Headnote

ISCR Case No. 14-03343.h1

deniedDec 10, 2015· Hon. Paul J. Mason· hearing

Summary

An engineering technician, 41, was denied a security clearance under Guideline F (Financial Considerations) due to six delinquent accounts totaling $95,036. The Statement of Reasons detailed several financial issues, including a real estate mortgage with a $76,492 balance, past due by $27,344 since February 2013. Other allegations included a charged-off account for $7,980 from September 2011, and two cellular collection accounts for $1,856 and $256, reported delinquent in March 2013 and September 2011, respectively. A medical collection account for $100, delinquent since June 2007, was also cited. One allegation was resolved in the applicant's favor.

The applicant made partial payments on some debts, including a $1,113 settlement for one cellular account and a $200 payment that resolved another. The medical collection account was also paid off with a $100 payment. However, the judge found that the applicant's claims of financial counseling and good-faith efforts to resolve the remaining significant debts lacked sufficient supporting documentation.

The denial was based on the applicant's substantial unresolved debts and insufficient evidence of responsible financial management. The judge concluded that the applicant's reliance on mortgage insurance to absolve liability did not demonstrate a good-faith effort to repay debts, leading to the denial of eligibility for access to classified information.

Why the Applicant Was Denied

The applicant had six delinquent accounts totaling $95,036, with significant unresolved debts.
The applicant's claims of financial counseling and good-faith efforts to resolve debts lacked supporting documentation.
The applicant's reliance on mortgage insurance to absolve liability did not demonstrate a good-faith effort to repay debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(c)rejectedThe Person Has Received or Is Receiving Counseling for the Problem And/or There Are Clear Indications That the Problem Is Being Resolved or Is Under ControlThe applicant provided no evidence of effective financial counseling.
AG ¶ 20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's claims of good-faith efforts lacked documentation and credibility.

Key Rule Quoted

“An applicant must do more than merely rely on a legally available option (such as bankruptcy) to claim the benefit of the condition.”
— ISCR Case No. O2-30304 at 3 (App. Bd. Apr. 20, 2004)

Procedural Posture

SOR issuedJul 28, 2014
Answer filedSep 10, 2014
Hearing heldAug 14, 2015
Decision dateDec 10, 2015

Cite For

Insufficient Evidence of Financial Responsibility Under Guideline F
Lack of Credible Documentation for Financial Claims
Reliance on Mortgage Insurance Does Not Equate to Good-faith Effort to Repay Debts

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 real estate mortgage with a total loan balance of $76,492, is past due in the amount of $27,344. The account was reported delinquent in February 2013. $27,344	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	SOR 1.b is a charged off account with a total loan balance of $7,980. The account was opened in February 2002 and was reported charged off in September 2011 by the original creditor. $7,980	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	SOR 1.c is a collection account for $1,856. The cellular account was opened in June 2011, and was reported delinquent in March 2013. Applicant accepted the collection agency’s settlement offer of $1,113, and began payments of $101 a month in February 2014. $1,856	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.d	SOR 1.d is resolved in Applicant’s favor. The credit reports show that the SOR 1.b creditor became a successor-in-interest to the SOR 1.d account in approximately August 2011.	For Applicant	Unspecified Financial	Admitted	—	—	—
1.e	SOR 1.e is a collection account for $256. The cellular account was opened in September 2006, and was reported delinquent in September 2011. Supporting documentation indicates that the account was paid off upon Applicant’s $200 payment on August 14, 2014. $256	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.f	SOR 1.f is a medical collection account for $100. The account was opened in September 6, 2006, and was reported delinquent on June 2007. Applicant’s September 9, 2014 bank statement reflects a payment of $100 to the original creditor on August 18, 2014. $100	For Applicant	Medical Debt	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

SOR 1.a is a real estate mortgage with a total loan balance of $76,492, is past due in the amount of $27,344. The account was reported delinquent in February 2013.

$27,344

Against Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

SOR 1.b is a charged off account with a total loan balance of $7,980. The account was opened in February 2002 and was reported charged off in September 2011 by the original creditor.

$7,980

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

SOR 1.c is a collection account for $1,856. The cellular account was opened in June 2011, and was reported delinquent in March 2013. Applicant accepted the collection agency’s settlement offer of $1,113, and began payments of $101 a month in February 2014.

$1,856

For Applicant

Utility or Phone Debt

Admitted

—

1.d

SOR 1.d is resolved in Applicant’s favor. The credit reports show that the SOR 1.b creditor became a successor-in-interest to the SOR 1.d account in approximately August 2011.

For Applicant

Unspecified Financial

Admitted

—

1.e

SOR 1.e is a collection account for $256. The cellular account was opened in September 2006, and was reported delinquent in September 2011. Supporting documentation indicates that the account was paid off upon Applicant’s $200 payment on August 14, 2014.

$256

For Applicant

Utility or Phone Debt

Admitted

—

1.f

SOR 1.f is a medical collection account for $100. The account was opened in September 6, 2006, and was reported delinquent on June 2007. Applicant’s September 9, 2014 bank statement reflects a payment of $100 to the original creditor on August 18, 2014.

$100

For Applicant

Medical Debt

Admitted

—

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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

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES