ISCR Case 15-02225.h1

Case Headnote

ISCR Case No. 15-02225.h1

grantedMar 24, 2017· Hon. Arthur E. Marshall, Jr.· hearing

Summary

A 57-year-old senior program manager for a defense contractor was granted a security clearance despite concerns under Guideline F (Financial Considerations). The applicant's financial history included two bankruptcy filings in 1986 and 1999, with the latter discharged in 2003. Additionally, the applicant faced allegations concerning multiple delinquent debts, including adverse judgments, collection accounts, and charged-off accounts. These debts ranged from $28 to $10,765, with several related to residential issues, medical expenses, and utility bills.

Many of these debts were satisfied, including a $1,140 residential judgment, a $143 collection account, a charged-off account paid by June 2016, a $359 collection account, a $10,765 collection account, and a $1,335 medical account. However, several debts remained unsatisfied at the time of the hearing, such as a $1,335 adverse judgment, a $511 collection account with a settlement offer, a $551 collection account the applicant intended to pay, and multiple medical and utility accounts. Some outstanding medical and collection accounts were noted as potentially duplicative.

The judge found that the applicant mitigated the security concerns. His financial difficulties were largely attributed to significant medical expenses for his daughter and himself, along with reduced income. The applicant demonstrated a responsible approach by satisfying numerous debts and presenting a reasonable plan to address the remaining obligations, showing good faith efforts. Ultimately, the applicant's security clearance was granted.

Why the Applicant Prevailed

The applicant demonstrated a significant improvement in his financial situation by paying off or satisfying several debts.
The applicant's financial difficulties were largely due to circumstances beyond his control, including medical emergencies and reduced income.
The applicant has a reasonable plan to address remaining debts and has shown good faith efforts to resolve financial obligations.

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 That Resulted in the Financial Problem Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem And/or There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedNov 4, 2016
Answer filedDec 14, 2016Notarized response admitting most allegations.
Hearing heldJun 10, 2016
Decision dateMar 24, 2017

Cite For

Mitigation of Financial Considerations Under Guideline F Due to Circumstances Beyond Control
Good Faith Efforts to Resolve Debts
Whole-person Concept in Evaluating Security Clearance Eligibility

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	Applicant filed for Chapter 7 Bankruptcy protection on the advice of counsel in 1986. Related debts of about $10,000 were discharged in 1986. $10,000	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.b	Applicant filed for Chapter 13 Bankruptcy in 1999, with his debts discharged in 2003.	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.c	Adverse judgment ($1,140) – Residential debt. Satisfied. This debt was incurred because Applicant gave the rental complex insufficient notice before moving. $1,140	For Applicant	Judgment Against Applicant	Admitted	—	—	—
1.d	Adverse judgment ($1,335) - Unsatisfied - This judgment is for a home association balance related to a short sale. $1,335	For Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Collection account ($143) – Satisfied – Applicant had no knowledge of the origin of this debt and successfully had it removed from his credit report after formal dispute. $143	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	Collection account ($511) – Unsatisfied – Applicant contacted this creditor and it will settle the matter for a lesser amount if paid in a certain amount of time. $511	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Charged-off account (unknown balance) – Satisfied – Applicant showed that this account was paid off in or before June 2016.	For Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Collection account ($359) – Satisfied – Applicant wrote that his wife contacted this creditor concerning an account opened in 2011, and was told it had no record of this debt. $359	For Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Collection account ($10,765) – Satisfied – This debt was incurred due to insufficient notice before moving. $10,765	For Applicant	Unspecified Financial	Admitted	—	—	—
1.j	Collection account ($551) – Unsatisfied – Applicant wrote his intention to pay this debt within a few months of the hearing. $551	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	Medical account ($99) – Unsatisfied – After the hearing, Applicant wrote that this account shows paid on credit report provided by the Government. $99	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	Medical account ($99) – Unsatisfied – Applicant wrote that this account shows paid on credit report provided by the Government. $99	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	Medical account ($28) – Unsatisfied – Applicant wrote that this account shows paid on credit report provided by the Government. $28	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	Utility collection ($826) – Unsatisfied. Although Applicant successfully had this deleted from his credit report through the dispute process, he wrote his intention to pay this debt within a few months of the hearing. $826	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.o	Collection accounts ($1,694) - Unsatisfied. These accounts are duplicative. Applicant stated he had not yet contacted this creditor, but hoped to make a payment in the following month. $1,694	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.p	Medical account ($1,335) – Satisfied. Evidence was presented showing this account was paid. $1,335	For Applicant	Medical Debt	Admitted	—	—	—
1.q	Collection accounts ($1,297) - Unsatisfied. These accounts are duplicative. Applicant stated he had not yet contacted this creditor, but hoped to make a payment in the following month. $1,297	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.r	Collection account ($539) - Unsatisfied. Applicant was extended a settlement offer if debt was paid by a certain date. $539	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.s	Medical accounts ($536) - Unsatisfied. Applicant expressed his feeling that these balances were in some way duplicative. $536	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.t	Medical accounts ($432) - Unsatisfied. Applicant expressed his feeling that these balances were in some way duplicative. $432	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.u	Medical accounts ($90) - Unsatisfied. Applicant expressed his feeling that these balances were in some way duplicative. $90	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed for Chapter 7 Bankruptcy protection on the advice of counsel in 1986. Related debts of about $10,000 were discharged in 1986.

$10,000

For Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

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

—

1.b

Applicant filed for Chapter 13 Bankruptcy in 1999, with his debts discharged in 2003.

For Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

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

—

1.c

Adverse judgment ($1,140) – Residential debt. Satisfied. This debt was incurred because Applicant gave the rental complex insufficient notice before moving.

$1,140

For Applicant

Judgment Against Applicant

Admitted

—

1.d

Adverse judgment ($1,335) - Unsatisfied - This judgment is for a home association balance related to a short sale.

$1,335

For Applicant

Judgment Against Applicant

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

Collection account ($143) – Satisfied – Applicant had no knowledge of the origin of this debt and successfully had it removed from his credit report after formal dispute.

$143

For Applicant

Unspecified Financial

Admitted

—

1.f

Collection account ($511) – Unsatisfied – Applicant contacted this creditor and it will settle the matter for a lesser amount if paid in a certain amount of time.

$511

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

Charged-off account (unknown balance) – Satisfied – Applicant showed that this account was paid off in or before June 2016.

For Applicant

Unspecified Financial

Admitted

—

1.h

Collection account ($359) – Satisfied – Applicant wrote that his wife contacted this creditor concerning an account opened in 2011, and was told it had no record of this debt.

$359

For Applicant

Unspecified Financial

Admitted

—

1.i

Collection account ($10,765) – Satisfied – This debt was incurred due to insufficient notice before moving.

$10,765

For Applicant

Unspecified Financial

Admitted

—

1.j

Collection account ($551) – Unsatisfied – Applicant wrote his intention to pay this debt within a few months of the hearing.

$551

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.k

Medical account ($99) – Unsatisfied – After the hearing, Applicant wrote that this account shows paid on credit report provided by the Government.

$99

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.l

Medical account ($99) – Unsatisfied – Applicant wrote that this account shows paid on credit report provided by the Government.

$99

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.m

Medical account ($28) – Unsatisfied – Applicant wrote that this account shows paid on credit report provided by the Government.

$28

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.n

Utility collection ($826) – Unsatisfied. Although Applicant successfully had this deleted from his credit report through the dispute process, he wrote his intention to pay this debt within a few months of the hearing.

$826

For Applicant

Utility or Phone Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.o

Collection accounts ($1,694) - Unsatisfied. These accounts are duplicative. Applicant stated he had not yet contacted this creditor, but hoped to make a payment in the following month.

$1,694

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.p

Medical account ($1,335) – Satisfied. Evidence was presented showing this account was paid.

$1,335

For Applicant

Medical Debt

Admitted

—

1.q

Collection accounts ($1,297) - Unsatisfied. These accounts are duplicative. Applicant stated he had not yet contacted this creditor, but hoped to make a payment in the following month.

$1,297

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.r

Collection account ($539) - Unsatisfied. Applicant was extended a settlement offer if debt was paid by a certain date.

$539

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.s

Medical accounts ($536) - Unsatisfied. Applicant expressed his feeling that these balances were in some way duplicative.

$536

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.t

Medical accounts ($432) - Unsatisfied. Applicant expressed his feeling that these balances were in some way duplicative.

$432

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.u

Medical accounts ($90) - Unsatisfied. Applicant expressed his feeling that these balances were in some way duplicative.

$90

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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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