Loading case…

Summary

The applicant, a 54-year-old U.S. military veteran with a history of financial difficulties stemming from a failed business, contested the Department of Defense's intent to revoke his security clearance. Despite incurring significant debt, he demonstrated a commitment to addressing his financial obligations and provided evidence of stable employment and efforts to repay creditors. The judge granted the security clearance, finding sufficient mitigation of the financial concerns.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: collection account for $8,477. This debt stems from a credit card account. Applicant entered into a repayment arrangement and has made $100 monthly payments since September 2015. The account balance is not reflected in the documentation (1.a). collection account for $11,770. This debt stems from a credit card account. Applicant entered into a repayment arrangement and has made $151 monthly payments since September 2015. The account has a balance of $10,713 as of April 4, 2016 (1.b). collection account for $2,308. This debt stems from a lease for business equipment. Applicant settled this debt for $1,500 in February 2016 and the account now has a zero balance (1.c). collection account for $6,855. This debt stems from a credit card account. Applicant entered into a repayment arrangement and has made $75 monthly payments since September 2015. The account has a balance of $6,404 as of March 16, 2016 (1.d). collection account for $121,846. This debt stems from the second mortgage loan Applicant obtained on his personal residence. It is also the debt that Applicant attempted to resolve through previous negotiations. In March 2016, he along with his wife (it’s a joint debt), agreed with the creditor to settle the debt for $138,252 via a confession of judgment, which required a $25,000 lump-sum payment and consecutive monthly payments of at least $1,000 each month. Applicant made the lump-sum payment on March 18, and the first $1,000 monthly payment was scheduled for April 30, 2016 (1.e). collection account for $4,903. This debt stems from a credit card account. Applicant entered into a repayment arrangement and has made $153 monthly payments since September 2015. The account has a balance of $3,983 as of March 29, 2016 (1.f). past-due accounts for $25,256 and $28,256 with the same mortgage lender. These debts stem from mortgage loans Applicant had on rental homes, which he refinanced in an effort to keep his business afloat. The homes were foreclosed upon and he was not aware of the accounts until receiving the SOR. He received no correspondence from the creditor, but he attempted to contact the creditor and learned it was no longer in business. He contacted the possible successor companies and was told that there was no debt in his name. The April 2014 credit report lists both past-due accounts as closed accounts; foreclosure redeemed; and credit grantor reclaim collateral. Neither account appears on the more recent November 2015 account. Given these circumstances, I find the past-due accounts were resolved when the rental homes were foreclosed upon (1.g). collection account for $20,518. This debt stems from a vehicle loan Applicant obtained to provide transportation for his sales manager. The loan went into default and the vehicle was repossessed when the business failed. He believed the repossession resolved the account and learned there was a deficiency balance for a lesser amount after receiving the SOR. He entered into a repayment arrangement and has made $125 monthly payments since February 2016. The account has a balance of $12,923 as of April 4, 2016 (1.i).

The judge granted the clearance. The government raised disqualifying conditions AG ¶ 18. 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 provided evidence of stable employment and a significant increase in income; He demonstrated a commitment to repaying his debts and took proactive steps to address his financial situation; The financial difficulties were largely due to circumstances beyond his control, including a business failure during the financial crisis.

Why the Applicant Prevailed

• The applicant provided evidence of stable employment and a significant increase in income.
• He demonstrated a commitment to repaying his debts and took proactive steps to address his financial situation.
• The financial difficulties were largely due to circumstances beyond his control, including a business failure during the financial crisis.

Conditions Referenced

Key Rule Quoted

“No one has a right to a security clearance.”

Procedural Posture

• SOR issuedJul 13, 2016
• Answer filedSep 28, 2015
• Hearing heldApr 13, 2016
• Decision dateNot specified

Cite For

• Mitigation of Financial Difficulties Under Guideline F
• Impact of Personal Circumstances on Financial Obligations
• Consideration of Military Service in Security Clearance Decisions