Summary
Applicant is a 31-year-old supervisor employed by a federal contractor. He filed for bankruptcy only a month before the hearing and has substantial non-dischargeable student loan debt, with plans to continue schooling to avoid repayment. The judge found that he did not successfully mitigate security concerns regarding financial considerations, leading to a denial of clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: $347 collection account placed February 2001 (1.a). $4,596 credit union charged off in April 2003 (1.b). $395 collection account placed in June 2003 (1.c). $463 credit union charged off in January 2005 (1.d). $6,412 credit union charged off in November 2004 (1.e). $153 collection account placed in March 2001 (1.f). $372 collection account placed in June 1999 (1.g).
The judge denied the clearance. The government raised disqualifying conditions E2.A6.1.2.1, E2.A6.1.2.3. The judge applied mitigating conditions E2.A6.1.3.3, E2.A6.1.3.4, E2.A6.1.3.6. The decision turned on the following: Applicant filed for bankruptcy only one month before the hearing, indicating a lack of proactive financial management; He has a significant amount of non-dischargeable student loan debt and intends to continue schooling to defer repayment indefinitely; Applicant made no payments on his debts and did not seek financial counseling prior to filing for bankruptcy.
Why the Applicant Was Denied
- Applicant filed for bankruptcy only one month before the hearing, indicating a lack of proactive financial management.
- He has a significant amount of non-dischargeable student loan debt and intends to continue schooling to defer repayment indefinitely.
- Applicant made no payments on his debts and did not seek financial counseling prior to filing for bankruptcy.
Conditions Referenced
- E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
- E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts
- E2.A6.1.3.3rejectedConditions That Resulted in the Behavior Were Largely Beyond the Person’s ControlApplicant's financial issues were exacerbated by unemployment, but he did not make efforts to pay his debts.
- E2.A6.1.3.4rejectedReceived or Is Receiving Counseling for the ProblemAlthough he attended financial management courses, he did not seek counseling prior to bankruptcy and has not prepared a budget.
- E2.A6.1.3.6rejectedInitiated a Good-faith Effort to Repay Overdue CreditorsThere was no evidence of good-faith efforts to repay debts, and he waited until after the SOR was filed to file for bankruptcy.
Key Rule Quoted
“The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is eligible for a security clearance.”
Procedural Posture
- SOR issuedAug 7, 2006
- Answer filedSep 14, 2006
- Hearing heldJan 23, 2007
- Decision dateApr 30, 2007
Cite For
- Denial of Clearance Due to Recent Bankruptcy Filing and Ongoing Financial Irresponsibility
- Failure to Mitigate Financial Concerns Under Guideline F
- Impact of Non-dischargeable Debts on Security Clearance Eligibility