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Summary

The applicant, a 27-year-old administrative assistant at a defense contractor, faced security concerns under Guideline F due to financial difficulties stemming from a detrimental home life and poor communication with creditors. The applicant demonstrated significant progress in addressing her debts, establishing repayment plans, and improving her financial status, leading to the granting of her security clearance.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: These are two student loans with unpaid balances of $6,031 and $3,940 that fell into a default status and were placed for collection. Applicant entered into a repayment plan with the creditor one month before the SOR was issued. She is making monthly payments of $150 towards the outstanding balances. Both loans have been rehabilitated, and neither loan has a past-due balance. While there are still balances on the loans, the accounts have been resolved (1.a). These are two student loans with unpaid balances of $6,031 and $3,940 that fell into a default status and were placed for collection. Applicant entered into a repayment plan with the creditor one month before the SOR was issued. She is making monthly payments of $150 towards the outstanding balances. Both loans have been rehabilitated, and neither loan has a past-due balance. While there are still balances on the loans, the accounts have been resolved (1.b). This is a bank credit card account with a $300 credit limit and a past-due and unpaid balance of $497 that was placed for collection and sold to a debt purchaser. Although Applicant contended that a repayment plan had been established, effective January 15, 2016, and she submitted documentation reflecting payments to the same debt purchaser for two accounts, and the resolution of those accounts, neither of those accounts was the one alleged in the SOR. She failed to submit documentation to support her contention that this particular account had been placed into a repayment plan. The account has not been resolved (1.c). This is a medical account with an unpaid balance of $448 that was placed for collection. Applicant set up a repayment arrangement with the collection agent in February 2015 – ten months before the SOR was issued – and authorized automatic payments were made, totaling $461.74, with the final payment being made in April 2015. The account has been resolved (1.d). This is a medical account with an unpaid balance of $384 that was placed for collection. At the time Applicant answered the SOR, she stated an intention to contact the collection agent, the same one handling her other medical account, to set up a repayment plan for either one full payment or several payments made over the period of a month. She did not submit any more recent documentation to reflect her subsequent actions. The account has not been resolved (1.e). These are two unspecified accounts related to an insurance lapse with unpaid balances of $124 and $48 that were placed for collection. At the time Applicant answered the SOR, she stated an intention to contact the collection agent for both accounts to set up a repayment plan to pay them off in February 2016. She did not submit any more recent documentation to reflect her subsequent actions. The accounts have not been resolved (1.f). These are two unspecified accounts related to an insurance lapse with unpaid balances of $124 and $48 that were placed for collection. At the time Applicant answered the SOR, she stated an intention to contact the collection agent for both accounts to set up a repayment plan to pay them off in February 2016. She did not submit any more recent documentation to reflect her subsequent actions. The accounts have not been resolved (1.g).

The judge granted the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d). The decision turned on the following: The applicant established repayment arrangements with creditors and rehabilitated her student loans before the SOR was issued; The applicant's financial problems were largely due to circumstances beyond her control, including a detrimental home life and unemployment; The applicant's financial status has improved significantly, with most accounts resolved or in the process of being resolved.

Why the Applicant Prevailed

• The applicant established repayment arrangements with creditors and rehabilitated her student loans before the SOR was issued.
• The applicant's financial problems were largely due to circumstances beyond her control, including a detrimental home life and unemployment.
• The applicant's financial status has improved significantly, with most accounts resolved or in the process of being resolved.

Conditions Referenced

Key Rule Quoted

“An applicant need only establish a plan to resolve financial problems and take significant actions to implement the plan.”

Procedural Posture

• SOR issuedDec 13, 2015
• Answer filedJan 14, 2016Applicant elected for a written record decision.
• Hearing held—No hearing; case decided on the written record.
• Decision dateNov 17, 2016

Cite For

• Mitigation of Financial Issues Under Guideline F
• Impact of Personal Circumstances on Financial Difficulties
• Evaluation of Good-faith Efforts to Resolve Debts