Summary
The applicant, a 47-year-old human relations specialist with a history of military service, faced security concerns under Guideline F (Financial Considerations) due to multiple delinquent debts and a prior bankruptcy. Despite her claims of willingness to resolve her financial issues, the judge found that her financial problems were recent and numerous, and she had not taken meaningful steps to address them until her security clearance was jeopardized, leading to a denial of her application.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: She purchased a second investment property in September 2006 for about $410,000. She borrowed the entire purchase price. The mortgage on this property was foreclosed in June 2008, but she still owes the lender about $32,000 (1.a). She purchased her primary residence, where she currently lives, in August 2005 for about $588,000, borrowing about $400,000. She refinanced the mortgage, increasing the debt to $670,000. Foreclosure proceedings were initiated on this property but have been suspended. Applicant negotiated a payment plan in April 2009. However, at the time of the hearing, Applicant had not made any payments on this property for about six months, because she applied for a loan modification in February 2011 and was awaiting a decision on her application (1.b). Three debts alleged in the SOR were recently resolved. In April 2011, the delinquent $91 gas bill alleged in SOR ¶ 1.h was paid in full. (AX A.) In July 2011, the delinquent $430 telephone bill alleged in SOR ¶ 1.c was paid in full (1.c). In April 2011, she negotiated a 'short payoff' for $5,500, payable in six installments. She had made two of the six installment payments at the time of the hearing (1.d). The SOR also alleged three delinquent credit card accounts in amounts of about $2,143 (SOR ¶ 1.e), $1,113 (SOR ¶ 1.f), and $1,025 (SOR ¶ 1.i) (1.e). The SOR also alleged three delinquent credit card accounts in amounts of about $2,143 (SOR ¶ 1.e), $1,113 (SOR ¶ 1.f), and $1,025 (SOR ¶ 1.i) (1.f). The SOR also alleged three delinquent credit card accounts in amounts of about $2,143 (SOR ¶ 1.e), $1,113 (SOR ¶ 1.f), and $1,025 (SOR ¶ 1.i) (1.g). The SOR also alleged three delinquent credit card accounts in amounts of about $2,143 (SOR ¶ 1.e), $1,113 (SOR ¶ 1.f), and $1,025 (SOR ¶ 1.i) (1.h). The SOR also alleged three delinquent credit card accounts in amounts of about $2,143 (SOR ¶ 1.e), $1,113 (SOR ¶ 1.f), and $1,025 (SOR ¶ 1.i) (1.i). Applicant filed a petition for Chapter 7 bankruptcy in November 2000 and received a discharge in February 2001 (1.j).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c), AG ¶ 19(e). The decision turned on the following: Applicant has a history of financial overextension and multiple delinquent debts; She failed to demonstrate a good-faith effort to resolve her financial issues until after being notified of security concerns; The judge found that her financial problems were numerous, recent, and indicative of poor judgment.
Why the Applicant Was Denied
- Applicant has a history of financial overextension and multiple delinquent debts.
- She failed to demonstrate a good-faith effort to resolve her financial issues until after being notified of security concerns.
- The judge found that her financial problems were numerous, recent, and indicative of poor judgment.
Conditions Referenced
- AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
- AG ¶ 19(e)appliedConsistent Spending Beyond One's Means
Key Rule Quoted
“Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information.”
Procedural Posture
- SOR issuedFeb 23, 2011
- Answer filedApr 22, 2011
- Hearing heldJun 6, 2011
- Decision dateJul 26, 2011
Cite For
- Denial Based on Financial Irresponsibility Under Guideline F
- Importance of Timely Debt Resolution in Security Clearance Cases
- Impact of Prior Bankruptcy on Current Financial Evaluations