ISCR Case 09-05254.h1

Case Headnote

ISCR Case No. 09-05254.h1

deniedJul 1, 2009· Hon. Robert E. Coacher· hearing

Summary

A 56-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to a history of delinquent debts and a prior bankruptcy. The Statement of Reasons detailed several financial concerns. Two medical debts were paid in April 2010. However, a delinquent Home Equity Line of Credit (HELOC) totaling $65,332 remained unpaid, with the last payment made in May 2009 and no repayment agreement in place.

Additionally, the applicant admitted to three credit card or consumer debts in the amounts of $2,385, $14,414, and $5,710. While payment plans were established for these, only one payment was made on each. The applicant's 1997 bankruptcy, which discharged approximately $42,000 in unsecured debts, was attributed to his wife's job loss due to Lupus and associated medical costs not fully covered by insurance. She later received $1,200 per month in disability income.

Despite evidence of good character and a long employment history, the clearance was denied. The decision cited the applicant's ongoing financial difficulties, the failure to establish a repayment plan for significant obligations, and the recent and continuing nature of the financial issues, which raised concerns about reliability and judgment.

Why the Applicant Was Denied

The applicant has a history of delinquent debts and a prior bankruptcy discharge.
The applicant admitted to owing multiple debts and failed to establish a repayment plan for significant obligations.
The applicant's financial issues are recent and ongoing, raising questions about his reliability and judgment.

Conditions Referenced

Disqualifying

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

Mitigating

F.20(a)rejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to RecurThe applicant's financial issues are recent and ongoing.
F.20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlThe applicant chose to incur additional debt and did not demonstrate that his financial issues were beyond his control.
F.20(c)rejectedThe Person Has Received or Is Receiving Counseling for the ProblemWhile the applicant received some counseling, it was insufficient to resolve ongoing financial issues.
F.20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue CreditorsThe applicant's limited payments and lack of a comprehensive repayment plan do not demonstrate a good-faith effort.

Key Rule Quoted

“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”

Procedural Posture

SOR issuedMar 19, 2010
Answer filedApr 23, 2010
Hearing heldDec 30, 2010Hearing was held as scheduled.
Decision date—

Cite For

Denial of Security Clearance Due to Ongoing Financial Issues Under Guideline F
Impact of Prior Bankruptcy on Current Financial Reliability
Insufficient Evidence of Good-faith Efforts to Resolve 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	The debts alleged in SOR ¶¶ 1.a and 1.b are medical debts. Applicant paid both debts in April 2010.	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	The debts alleged in SOR ¶¶ 1.a and 1.b are medical debts. Applicant paid both debts in April 2010.	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	SOR ¶ 1.c alleges the delinquent HEL in the amount of $65,332. This debt remains unpaid with no repayment agreement in place. The last payment made on this debt was in May 2009. $65,332	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The debts alleged in SOR ¶¶ 1.d through 1.f are credit card or consumer debts in the respective amounts of: $2,385, $14,414, and $5,710. Applicant admitted these debts and set up a payment plan to satisfy the debts. He provided evidence of one payment made on each debt. $2,385	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.e	The debts alleged in SOR ¶¶ 1.d through 1.f are credit card or consumer debts in the respective amounts of: $2,385, $14,414, and $5,710. Applicant admitted these debts and set up a payment plan to satisfy the debts. He provided evidence of one payment made on each debt. $14,414	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.f	The debts alleged in SOR ¶¶ 1.d through 1.f are credit card or consumer debts in the respective amounts of: $2,385, $14,414, and $5,710. Applicant admitted these debts and set up a payment plan to satisfy the debts. He provided evidence of one payment made on each debt. $5,710	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.g	Applicant attributes his 1997 bankruptcy (SOR ¶ 1.g) to his wife’s job loss. She suffers from Lupus and that condition affected her employment. Additionally, their health insurance does not cover all the costs associated with her Lupus. She eventually received disability income for her condition in the amount of $1,200 per month. The bankruptcy action discharged approximately $42,000 worth of unsecured debts.	For Applicant	Bankruptcy Filing	Admitted	—	(a) behavior happened long ago / infrequent / unlikely to recur	Claimed Passage of Time

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The debts alleged in SOR ¶¶ 1.a and 1.b are medical debts. Applicant paid both debts in April 2010.

For Applicant

Medical Debt

Admitted

—

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

1.b

The debts alleged in SOR ¶¶ 1.a and 1.b are medical debts. Applicant paid both debts in April 2010.

For Applicant

Medical Debt

Admitted

—

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

1.c

SOR ¶ 1.c alleges the delinquent HEL in the amount of $65,332. This debt remains unpaid with no repayment agreement in place. The last payment made on this debt was in May 2009.

$65,332

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

The debts alleged in SOR ¶¶ 1.d through 1.f are credit card or consumer debts in the respective amounts of: $2,385, $14,414, and $5,710. Applicant admitted these debts and set up a payment plan to satisfy the debts. He provided evidence of one payment made on each debt.

$2,385

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) good-faith effort to repay or otherwise resolve debts

Documented

Payment Plan with Creditor

1.e

$14,414

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) good-faith effort to repay or otherwise resolve debts

Documented

Payment Plan with Creditor

1.f

$5,710

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) good-faith effort to repay or otherwise resolve debts

Documented

Payment Plan with Creditor

1.g

Applicant attributes his 1997 bankruptcy (SOR ¶ 1.g) to his wife’s job loss. She suffers from Lupus and that condition affected her employment. Additionally, their health insurance does not cover all the costs associated with her Lupus. She eventually received disability income for her condition in the amount of $1,200 per month. The bankruptcy action discharged approximately $42,000 worth of unsecured debts.

For Applicant

Bankruptcy Filing

Admitted

—

(a) behavior happened long ago / infrequent / unlikely to recur

Claimed

Passage of Time

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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