Loading case…

Summary

The applicant, a 54-year-old medical reviewer for a defense contractor, faced trustworthiness concerns under Guideline F due to financial difficulties stemming from personal circumstances, including a history of domestic abuse and subsequent financial mismanagement. The judge found that the applicant had taken significant steps to address her financial issues, including establishing repayment plans and seeking financial advice, leading to a decision to grant her eligibility for a public trust position.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: These are two “snapshots” of the same state income tax account caused by Applicant’s withdrawal of her 401(k) funds. In May 2012, the state department of taxation noted that Applicant had $4,036 in total payments and refundable credits, leaving a balance of $3,054.16, for the tax period 2011. On May 1, 2013, the same state entity obtained a judgment against Applicant in the amount of $3,416. One week later, her anticipated $339 refund from her 2012 income taxes was applied to the 2011 balance. In October 2015, the state department of taxation restated Applicant’s income tax liability for the tax period 2011: tax assessed was $3,034; interest assessed was $925.81; penalty assessed was $586.14; payments or credits were $339; and the current balance due was $4,206.95. Applicant sought eligibility for entry into the state’s Offer in Compromise Program for “financially distressed taxpayers to put overwhelming tax liabilities behind them by paying a reasonable amount in compromise and becoming productive members of the economy.” She made three separate repayment offers, with the initial one being rejected, and the remaining two not yet resolved. She also agreed to an alternative repayment plan under which she makes monthly payments of $100. As of the hearing date, Applicant contended she had already made two such payments (1.a). This is a medical account with a high credit of $216 and a remaining unpaid balance of $191 (that insurance failed to cover) that was placed for collection following Applicant’s treatment for a mini-stroke. On May 27, 2016, Applicant contacted the current holder of the account and made the entire payment of $191. The account has been resolved (1.b). This is a medical account with a remaining unpaid balance of $76 that was placed for collection following Applicant’s treatment for a mini-stroke. On May 27, 2016, Applicant contacted the current holder of the account and made the entire payment of $76, but it appears that the check was never cashed. Applicant has had no further contact with the collection agent, but is willing to furnish a substitute check if the first one cannot be found. The account has either been resolved or is in the process of being so (1.c). This is an apartment lease that Applicant cosigned for her former boyfriend with an unpaid balance of $4,650 that was placed for collection. Although Applicant had contacted the facility manager to have her name removed from the lease when she moved out of state, and she was under the impression that her request had been honored, she later learned that her name remained on the lease. Applicant claims to be assisting the creditor in their effort to locate her former boyfriend. In the event he cannot be located, she was willing to negotiate a settlement or to start making payments towards at least one-half of the remaining balance. Her offer was rejected. As a lease cosigner, Applicant remains legally responsible for the unpaid balance. The account remains unresolved (1.d). This is a bank credit card account with a $300 credit limit that was placed for collection, and charged off in the amount of $505. The account was sold to a debt purchaser. Applicant contacted the debt purchaser and agreed to a repayment settlement. An unspecified amount was paid to the debt purchaser and the account was considered satisfied. The account has been resolved (1.e). This is a bank credit card account with a credit limit of $775 and a past-due balance of $1,196 that was charged off in January 2013, and sold to a debt purchaser. Applicant contacted the current holder of the account and agreed to a settlement of $358.80 provided monthly payments were made as agreed. Applicant made her initial payment of $81.76 in February 2016, and subsequent monthly payments of $71.76 followed. The final payment was due in June 2016. Although Applicant failed to submit documentation regarding payments made after her initial one or a letter from the current collection agent, it appears that the account, if not already resolved, is in the process of being resolved (1.f). This is a bank credit card account with a $720 credit limit and high credit of $988 that was placed for collection, and charged off in the amount of $660. The account was sold to a debt purchaser in September 2007. Applicant contacted the original creditor who referred her to the debt purchaser. The creditor said that Applicant’s balance with it was zero, but that she “may still owe something to [the debt purchaser].” Although Applicant made numerous telephone calls and wrote two letters to the debt purchaser, she has never received any response to her resolution efforts. Other than the letter informing her that the account had been sold, Applicant failed to submit any documentation to support the existence of her follow-up efforts to contact the debt purchaser. Considering the age of the debt, it appears that the statute of limitations may have run making the debt generally unenforceable at this late date unless it has been re-aged by Applicant. Furthermore, the debt is not listed in Applicant’s most recent credit report under the debt purchaser’s name, and the creditor has requested that the debt under its name be deleted by the credit reporting agencies. Nevertheless, it appears that the account has not been resolved (1.g). This is a telephone land-line account with a past-due balance of $58 that was placed for collection. Applicant insisted that she had called the creditor before closing the account in June 2012 and was told that there was no outstanding balance. She was subsequently informed that the account was in collection, but no one was able to tell her what the delinquency was for. Applicant claimed to have made the payment, but that payment was apparently lost and the account was transferred to another collection agent. Upon learning of the situation and the new collection agent, in February 2016, Applicant sent that collection agent a check for $58.83. The payment was returned to Applicant in March 2016 stating that all future payments should be forwarded to yet another collection agent. A money order was then sent to the new collection agent in May 2016. The account has been resolved (1.h). This is a bank credit card account with a credit limit of $250, a past-due balance of $160, and an unpaid balance of $331 that was placed for collection and charged off in December 2006. It was subsequently transferred or sold to another collection agent. Applicant contended the account became delinquent when she separated from her second husband, and that when she received monies from a workmen’s compensation case in 2008 or 2009, she paid the entire balance. When she called the creditor or the collection agent, Applicant was informed that the account had been sold and there was no further information available. Applicant failed to submit any documentation to support the existence of her purported payments or her follow-up efforts to contact the creditor or collection agents. Considering the age of the debt, it appears that the statute of limitations may have run making the debt generally unenforceable at this late date unless it has been re-aged by Applicant. Furthermore, the debt is not listed in Applicant’s more recent credit reports under the creditor’s name or the collection agents’ names. Applicant intends to continue her efforts to locate the current holder of the account. It appears that the account has not been resolved (1.i). This is a utility account at the apartment for which Applicant served as a cosigner with an unpaid balance of $426 that was placed for collection. For the same reasons she gave with respect to her disputed responsibility for the apartment lease, Applicant disputed responsibility for this cosigned utility account. She has made efforts to locate her former boyfriend to persuade the creditor and collection agent to resolve the account. The account remains unresolved (1.j).

The judge granted the clearance. The government raised disqualifying conditions F.3, F.4. The judge applied mitigating conditions F.2, F.3. The decision turned on the following: The applicant demonstrated proactive efforts to resolve her financial issues, including establishing repayment arrangements with creditors; She provided evidence of a budget that showed her ability to manage her finances moving forward; The applicant's financial difficulties were largely attributed to extenuating personal circumstances, including domestic abuse and theft.

Why the Applicant Prevailed

• The applicant demonstrated proactive efforts to resolve her financial issues, including establishing repayment arrangements with creditors.
• She provided evidence of a budget that showed her ability to manage her finances moving forward.
• The applicant's financial difficulties were largely attributed to extenuating personal circumstances, including domestic abuse and theft.

Conditions Referenced

Key Rule Quoted

“"The security clearance decision is not a determination of an applicant's overall fitness to hold a position of trust, but rather a determination of whether the applicant's conduct raises a security concern that is not mitigated by the evidence presented."”

Procedural Posture

• SOR issuedNov 24, 2015
• Answer filedDec 16, 2015
• Hearing heldMay 19, 2016
• Decision dateAug 15, 2016

Cite For

• Mitigation of Financial Considerations Under Guideline F
• Good Faith Efforts to Resolve Debts
• Impact of Personal Circumstances on Financial Stability