ISCR Case 15-01767.h1

Case Headnote

ISCR Case No. 15-01767.h1

grantedJul 1, 2015· Hon. Michael H. Leonard· hearing

Summary

A 52-year-old engineer with a long history of holding a security clearance was granted a security clearance despite concerns under Guideline F (Financial Considerations). The applicant's financial difficulties were primarily attributed to a costly divorce and a business failure.

The Statement of Reasons detailed several financial allegations. These included a $10,000 student loan for a son, which was rehabilitated and is now current, and a $26,116 charged-off line of credit for which the applicant has been making consistent monthly payments since December 2015. Another $10,000 charged-off credit card account was settled for $2,903. Additionally, two $515 and $5,494 collection accounts were paid in full, and a $2,363 charged-off credit card debt, reduced to a civil judgment, was satisfied for $2,800. A $13,540 student loan cosigned for a son, which became delinquent, is now current, and a charged-off credit card account with a high balance was paid and closed with a $0 balance. The applicant also attempted to resolve two other charged-off accounts but could not locate the current creditors.

The decision to grant the clearance was based on several mitigating factors. The judge found that the financial problems largely stemmed from circumstances beyond the applicant's control. Furthermore, the applicant demonstrated a good-faith effort to resolve the debts, with many accounts rehabilitated or settled. The applicant's long history of holding a security clearance without incident and strong family support also contributed to the favorable outcome.

Why the Applicant Prevailed

The applicant's financial problems were largely due to circumstances beyond his control, including divorce and business failure.
The applicant demonstrated a good-faith effort to resolve his debts, with several accounts rehabilitated or settled.
The applicant's long history of holding a security clearance without incident and strong family support contributed to the favorable outcome.

Conditions Referenced

Disqualifying

AG ¶ 18raisedFinancial Considerations

Mitigating

AG ¶ 20(b)appliedConditions Beyond ControlThe applicant's financial issues stemmed from a divorce and business failure.
AG ¶ 20(c)appliedProblem ResolutionThe applicant showed clear indications that his financial problems were being resolved.
AG ¶ 20(d)appliedGood-faith Effort to RepayThe applicant initiated efforts to repay overdue creditors and resolve debts.

Key Rule Quoted

“The overall concern is: 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 issuedNov 20, 2015
Answer filedDec 24, 2015
Hearing heldApr 12, 2016
Decision dateApr 22, 2016

Cite For

Mitigating Conditions for Financial Difficulties Under Guideline F
Consideration of Circumstances Beyond an Applicant's Control in Financial Cases
Importance of Good-faith Efforts to Resolve Debts in Security Clearance Determinations

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	charged-off account. This debt stems from a student loan for $10,000 Applicant obtained for one of his sons in 2005. Applicant successfully rehabilitated the loan, the creditor removed the record of default from the loan in 2013, and the loan is current and up to date. He estimated the current balance at about $1,800. $1,800	For Applicant	Student Loan Debt	Admitted	—	—	—
1.b	$26,116 charged-off account. This debt stems from an unsecured line of credit Applicant obtained in about 2007 or 2008 for business and family expenses. He had multiple conversations with the creditor and they indicated they were not interested in establishing a formal repayment arrangement because the debt was charged off. Nonetheless, he has made monthly payments in varying amounts ($200, $150, or $100) since December 2015. He estimated the current balance at about $25,580. $25,580	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	$10,000 charged-off account. This debt stems from a credit card account Applicant used for business and family expenses. He settled the account for the lesser amount of $2,903 in February–March 2016. $2,903	For Applicant	Credit Card Debt	Admitted	—	—	—
1.d	two charged-off accounts with the same original creditor. Despite multiple telephone calls to the original and subsequent creditors, Applicant has not succeeded in finding a creditor who owns the accounts.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e	two charged-off accounts with the same original creditor. Despite multiple telephone calls to the original and subsequent creditors, Applicant has not succeeded in finding a creditor who owns the accounts.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	$515 collection account. This debt stems from a department store charge card account. Applicant paid it in full in September 2014. $515	For Applicant	Credit Card Debt	Admitted	—	—	—
1.g	$5,494 collection account. This debt stems from a credit card account that was turned over to a collection agency. The account was satisfied in full in December 2015. $5,494	For Applicant	Credit Card Debt	Admitted	—	—	—
1.h	$2,363 charged-off account. This debt stems from a credit card account opened in about early 2007. The debt was subsequently reduced to a civil judgment for $2,446 in June 2010. Applicant paid $2,800 to satisfy the judgment in March 2015. $2,800	For Applicant	Judgment Against Applicant	Admitted	—	—	—
1.i	$13,540 collection account. This debt stems from a student loan Applicant cosigned for a son. Applicant was unaware that the loan was delinquent until his 2014 background investigation. The loan became delinquent when his son was laid off from a job. His son has resumed making payments on the loan, and the loan is current and up to date.	For Applicant	Student Loan Debt	Admitted	—	—	—
1.j	charged-off account. This debt stems from a credit card account that had a $2,500 credit limit and a high balance of $8,730. The account is now paid and closed with $431 written off, and has a $0 balance. $431	For Applicant	Credit Card Debt	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

charged-off account. This debt stems from a student loan for $10,000 Applicant obtained for one of his sons in 2005. Applicant successfully rehabilitated the loan, the creditor removed the record of default from the loan in 2013, and the loan is current and up to date. He estimated the current balance at about $1,800.

$1,800

For Applicant

Student Loan Debt

Admitted

—

1.b

$26,116 charged-off account. This debt stems from an unsecured line of credit Applicant obtained in about 2007 or 2008 for business and family expenses. He had multiple conversations with the creditor and they indicated they were not interested in establishing a formal repayment arrangement because the debt was charged off. Nonetheless, he has made monthly payments in varying amounts ($200, $150, or $100) since December 2015. He estimated the current balance at about $25,580.

$25,580

For Applicant

Unspecified Financial

Admitted

—

1.c

$10,000 charged-off account. This debt stems from a credit card account Applicant used for business and family expenses. He settled the account for the lesser amount of $2,903 in February–March 2016.

$2,903

For Applicant

Credit Card Debt

Admitted

—

1.d

two charged-off accounts with the same original creditor. Despite multiple telephone calls to the original and subsequent creditors, Applicant has not succeeded in finding a creditor who owns the accounts.

For Applicant

Unspecified Financial

Unknown

—

1.e

For Applicant

Unspecified Financial

Unknown

—

1.f

$515 collection account. This debt stems from a department store charge card account. Applicant paid it in full in September 2014.

$515

For Applicant

Credit Card Debt

Admitted

—

1.g

$5,494 collection account. This debt stems from a credit card account that was turned over to a collection agency. The account was satisfied in full in December 2015.

$5,494

For Applicant

Credit Card Debt

Admitted

—

1.h

$2,363 charged-off account. This debt stems from a credit card account opened in about early 2007. The debt was subsequently reduced to a civil judgment for $2,446 in June 2010. Applicant paid $2,800 to satisfy the judgment in March 2015.

$2,800

For Applicant

Judgment Against Applicant

Admitted

—

1.i

$13,540 collection account. This debt stems from a student loan Applicant cosigned for a son. Applicant was unaware that the loan was delinquent until his 2014 background investigation. The loan became delinquent when his son was laid off from a job. His son has resumed making payments on the loan, and the loan is current and up to date.

For Applicant

Student Loan Debt

Admitted

—

1.j

charged-off account. This debt stems from a credit card account that had a $2,500 credit limit and a high balance of $8,730. The account is now paid and closed with $431 written off, and has a $0 balance.

$431

For Applicant

Credit Card Debt

Admitted

—

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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

DISCUSSION

FORMAL FINDINGS

CONCLUSION

FOOTNOTES