Summary
The applicant, a 38-year-old college graduate and computer engineer, faced security clearance concerns under Guideline F due to a Chapter 7 bankruptcy filing in 2010, which he later converted to Chapter 13 before having it dismissed. The judge found that the applicant had taken significant steps to resolve his financial issues, including negotiating settlements and reporting cancelled debts as income, leading to the granting of his security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant filed a Chapter 7 bankruptcy petition in August 2010 that was converted to a Chapter 13 bankruptcy in February 2011 before Applicant had it dismissed (1.a). Applicant allegedly owed charged-off balances of $17,882 (1.b). Applicant allegedly owed charged-off balances of $18,013 (1.c).
The judge granted the clearance. The government raised disqualifying conditions F3, F4. The judge applied mitigating conditions F2, F3, F4. The decision turned on the following: The applicant demonstrated a proactive approach to resolving his financial issues by negotiating settlements with creditors; He reported cancelled debts as income and has not incurred new delinquent accounts in the last five years; The applicant's financial situation improved significantly, and he provided evidence of responsible financial management post-bankruptcy.
Why the Applicant Prevailed
- The applicant demonstrated a proactive approach to resolving his financial issues by negotiating settlements with creditors.
- He reported cancelled debts as income and has not incurred new delinquent accounts in the last five years.
- The applicant's financial situation improved significantly, and he provided evidence of responsible financial management post-bankruptcy.
Conditions Referenced
- F3raisedInability or Unwillingness to Satisfy Debts
- F4raisedDeliberately Providing False or Misleading Information
- F2appliedThe Conditions That Resulted in the Financial Problems Were Largely Beyond the Person's Control
- F3appliedThe Person Has Made a Good Faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
- F4notedThe Person Has Received or Is Receiving Counseling for Financial Problems
Key Rule Quoted
“The U.S. Supreme Court has recognized the substantial discretion the Executive Branch has in regulating access to information pertaining to national security, emphasizing that 'no one has a ‘right’ to a security clearance.'”
Procedural Posture
- SOR issuedFeb 17, 2016
- Answer filedMar 5, 2016
- Hearing heldSep 28, 2016
- Decision dateJan 7, 2017
Cite For
- Proactive Resolution of Financial Issues Under Guideline F
- Mitigating Conditions Related to Financial Difficulties
- Impact of Cancelled Debts on Security Clearance Eligibility