ISCR Case 14-03813.h1

Case Headnote

ISCR Case No. 14-03813.h1

grantedSep 15, 2015· Hon. Mary E. Henry· hearing

Summary

A 34-year-old former Air Force member was granted a public trust position despite initial concerns under Guideline F (Financial Considerations). The applicant had several past-due debts totaling over $26,000, which were detailed in seven specific allegations. These included a $9,852 credit card debt she disputed but later acknowledged, an electric bill of $196 which she paid in full, and a $640 account she planned to settle for $450.

Other debts included a $646 credit card debt she agreed to settle for $350, and a $2,957 debt from a health and wellness center that ceased operations, which she disputed as fraudulent. She also had an $8,946 debt she initially disputed but later acknowledged, planning to pay it with a home equity loan or through a payment plan. Finally, a $3,060 charged-off account was shown to have been paid in full by February 2011, though this was not reflected in credit reports.

The judge found that the applicant's financial difficulties were largely beyond her control, partly due to a significant work hiatus for health reasons. She demonstrated a commitment to resolving her financial issues through counseling and consistent payments, and her income and financial management indicated a reasonable plan to address her debts. Consequently, eligibility was granted.

Why the Applicant Prevailed

The applicant demonstrated a commitment to resolving her financial issues through counseling and consistent payments.
The judge found that the applicant's financial difficulties were largely beyond her control, including a significant hiatus from work due to health issues.
The applicant's income and financial management indicated a reasonable plan to address her 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(b)appliedConditions Beyond the Person's Control
AG ¶ 20(c)appliedReceiving Counseling for the Problem
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)appliedReasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

“The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability.”
— ISCR Case No. 08-06605 at 3 (App. Bd. Feb. 4, 2010)

Procedural Posture

SOR issuedMar 18, 2015
Answer filedApr 8, 2015
Hearing heldJul 14, 2015
Decision dateSep 15, 2015

Cite For

Mitigating Conditions Under Guideline F for Financial Considerations
Demonstrating a Reasonable Plan to Resolve Financial Problems
Impact of Uncontrollable Circumstances on Financial Obligations

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 $9,852 debt in SOR allegation 1.a relates to a credit card opened in 2007 with a default date of April 2009. Applicant did not recognize this debt and disputed the debt with one credit reporting company. After investigation, the credit reporting company concluded that this was her debt. She admitted this debt in her response to the SOR. She then contacted the creditor to resolve the debt. They did not reach an agreement because the creditor sought a lump sum payment of $6,500 or a monthly payment of $500. Applicant could not make either payment. The creditor refused to accept a payment of $100 a month. Applicant indicated to the creditor an intent to pay the debt. $9,852	For Applicant	Credit Card Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts (e) reasonable, documented basis to dispute the debt	Claimed Debt Paid in Full
1.b	SOR allegation 1.b concerns an electric bill of $196. Applicant was unaware that she owed money to this creditor as she continues to be a customer. She paid this debt in full in March 2015. $196	For Applicant	Utility or Phone Debt	Admitted	—	—	Claimed Debt Paid in Full
1.c	The $640 debt in SOR allegation 1.c is an account belonging to Applicant. She contacted the creditor, which will settle the debt for $450. She plans to pay the debt in September 2015 after resolving two other debts. $640	For Applicant	Unspecified Financial	Admitted	—	—	Claimed Debt Settlement
1.d	The $646 debt in SOR allegation 1.d concerns a credit card. Applicant contacted the creditor by letter dated June 25, 2015. She advised that she would pay the debt by September 30, 2015. She again contacted the representative for the creditor and agreed to pay $350 as a settlement of the debt by August 6, 2015. She provided documentation on the agreement. The documentation included a copy of a cancelled check to allow the creditor to withdraw the money from her checking account. The agreement copy did not have a signature, but the representative of the creditor planned to electronically debit her account on August 3, 2015. $646	For Applicant	Credit Card Debt	Admitted	—	—	Claimed Debt Settlement
1.e	Concerning SOR allegation 1.e ($2,957), Applicant contracted with a health and wellness center in May 2007 in hopes of changing her body. She signed an agreement for 25 treatments at a cost of approximately $3,000. Applicant made several payments and received two treatments, when the center ceased operation. She notified the current collection agency, in a letter dated June 25, 2015, that the center never completed the treatments for which she contracted. She told the collection agency that she felt she had been defrauded and requested possible loan forgiveness or a resolution of the debt. She also disputed the debt with one credit reporting agency because she initially thought the debt did not belong to her. Upon further investigation, she agreed that this is her debt. Applicant has not resolved this debt. $2,957	For Applicant	Unspecified Financial	Denied	—	(e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.f	Applicant disputed the $8,946 debt in SOR allegation 1.f with one credit reporting company on the grounds that it was not her account. After investigation, the credit reporting company determined that the account belonged to her. She later contacted the creditor, who requested a lump sum payment of $5,500 or $450 a month for six months with a final payment to settle the account. She could not make either payment. She wrote the creditor a letter on June 25, 2015, advising that she planned to use a home equity loan to pay the debt at the end of the year. At the hearing, Applicant said that if she could not get the equity loan, she would work with the creditor to pay the loan. The account remains unresolved. $8,946	For Applicant	Unspecified Financial	Denied	—	(e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.g	Both credit reports in the record show the debt in SOR allegation 1.g ($3,060) as a past-due, charged-off account. Applicant provided documentation that she paid this debt in full by February 2011. Her payment has not been reported to the credit reporting companies. $3,060	For Applicant	Unspecified Financial	Admitted	—	—	Claimed Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The $9,852 debt in SOR allegation 1.a relates to a credit card opened in 2007 with a default date of April 2009. Applicant did not recognize this debt and disputed the debt with one credit reporting company. After investigation, the credit reporting company concluded that this was her debt. She admitted this debt in her response to the SOR. She then contacted the creditor to resolve the debt. They did not reach an agreement because the creditor sought a lump sum payment of $6,500 or a monthly payment of $500. Applicant could not make either payment. The creditor refused to accept a payment of $100 a month. Applicant indicated to the creditor an intent to pay the debt.

$9,852

For Applicant

Credit Card Debt

Admitted

—

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

(c) received/receiving counseling; problem being resolved

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

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Paid in Full

1.b

SOR allegation 1.b concerns an electric bill of $196. Applicant was unaware that she owed money to this creditor as she continues to be a customer. She paid this debt in full in March 2015.

$196

For Applicant

Utility or Phone Debt

Admitted

—

Claimed

Debt Paid in Full

1.c

The $640 debt in SOR allegation 1.c is an account belonging to Applicant. She contacted the creditor, which will settle the debt for $450. She plans to pay the debt in September 2015 after resolving two other debts.

$640

For Applicant

Unspecified Financial

Admitted

—

Claimed

Debt Settlement

1.d

The $646 debt in SOR allegation 1.d concerns a credit card. Applicant contacted the creditor by letter dated June 25, 2015. She advised that she would pay the debt by September 30, 2015. She again contacted the representative for the creditor and agreed to pay $350 as a settlement of the debt by August 6, 2015. She provided documentation on the agreement. The documentation included a copy of a cancelled check to allow the creditor to withdraw the money from her checking account. The agreement copy did not have a signature, but the representative of the creditor planned to electronically debit her account on August 3, 2015.

$646

For Applicant

Credit Card Debt

Admitted

—

Claimed

Debt Settlement

1.e

Concerning SOR allegation 1.e ($2,957), Applicant contracted with a health and wellness center in May 2007 in hopes of changing her body. She signed an agreement for 25 treatments at a cost of approximately $3,000. Applicant made several payments and received two treatments, when the center ceased operation. She notified the current collection agency, in a letter dated June 25, 2015, that the center never completed the treatments for which she contracted. She told the collection agency that she felt she had been defrauded and requested possible loan forgiveness or a resolution of the debt. She also disputed the debt with one credit reporting agency because she initially thought the debt did not belong to her. Upon further investigation, she agreed that this is her debt. Applicant has not resolved this debt.

$2,957

For Applicant

Unspecified Financial

Denied

—

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.f

Applicant disputed the $8,946 debt in SOR allegation 1.f with one credit reporting company on the grounds that it was not her account. After investigation, the credit reporting company determined that the account belonged to her. She later contacted the creditor, who requested a lump sum payment of $5,500 or $450 a month for six months with a final payment to settle the account. She could not make either payment. She wrote the creditor a letter on June 25, 2015, advising that she planned to use a home equity loan to pay the debt at the end of the year. At the hearing, Applicant said that if she could not get the equity loan, she would work with the creditor to pay the loan. The account remains unresolved.

$8,946

For Applicant

Unspecified Financial

Denied

—

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.g

Both credit reports in the record show the debt in SOR allegation 1.g ($3,060) as a past-due, charged-off account. Applicant provided documentation that she paid this debt in full by February 2011. Her payment has not been reported to the credit reporting companies.

$3,060

For Applicant

Unspecified Financial

Admitted

—

Claimed

Debt Paid in Full

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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

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES