ISCR Case 15-05123.h1

Case Headnote

ISCR Case No. 15-05123.h1

grantedMar 15, 2017· Hon. Noreen A. Lynch· hearing

Summary

A 40-year-old systems engineer and single mother was granted a security clearance despite concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) detailed two Chapter 7 bankruptcies, one discharged in June 1999 for $16,000, and another filed in March 2005 and discharged in June 2005 for $33,000. Additionally, the SOR alleged eight delinquent debts totaling approximately $33,500.

Specific allegations included a $2,222 collection account that was not the applicant’s debt and was removed from her credit report, and a $1,660 wireless account that also did not belong to her. Other debts, such as a $1,601 credit union collection account, a $3,510 past-due mortgage, a $4,025 student loan, a $15,344 charged-off account, and a $4,514 charged-off account, were all shown to be in repayment or resolved. A $2,179 past-due account was removed from her credit report after a dispute.

The judge found that the applicant had taken significant steps to address her financial issues. These included obtaining steady employment, receiving financial counseling, and making consistent payments on her debts. The applicant demonstrated a significant improvement in her financial situation, provided evidence of consistent payments and a reasonable plan for remaining issues, and received supportive character references. Consequently, her security clearance was granted.

Why the Applicant Prevailed

The applicant demonstrated a significant improvement in her financial situation since her last bankruptcy discharge.
She provided evidence of consistent payments on her debts and a reasonable plan to address remaining issues.
The applicant's character references supported her reliability and trustworthiness.

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
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)appliedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

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

Procedural Posture

SOR issuedJan 19, 2016
Answer filed—Applicant represented herself after initially retaining counsel.
Hearing heldFeb 3, 2017Record held open until February 24, 2017.
Decision dateMar 15, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Consideration of Personal Circumstances in Financial Difficulties
Importance of Character References in Security Clearance Decisions

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 in 1995, which was discharged in June 1999 ($16,000) and another Chapter 7 bankruptcy ($33,000), which was filed in March 2005 and discharged in June 2005.	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 (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts (e) reasonable, documented basis to dispute the debt	Documented Financial Counseling Claimed Debt Paid in Full
1.b	The SOR alleges eight delinquent debts, including student loans, collection accounts, charged-off accounts, a past-due mortgage payment, which total approximately $33,500. $33,500	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts (e) reasonable, documented basis to dispute the debt	Documented Financial Counseling Claimed Debt Paid in Full
1.c	The allegation in SOR 1.c, $2,222 collection account, was not Applicant’s debt but it is unclear about the status, although removed from her credit report. $2,222	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.d	A $1,601 collection account from a credit union was paid, and had been in a payment plan where Applicant paid $42.14 a month. $1,601	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.e	A $1,660 wireless account was not Applicant’s account. $1,660	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	A $3,510 past-due mortgage account is current and regular payments are being made in the amount of $1,111.04. $3,510	For Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full
1.g	A $4,025 120 days past-due student loan has been rehabilitated and payments of $150 a month have been made since early 2016. $4,025	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full
1.h	A $15,344 charged-off account has been in repayment status since 2016. $15,344	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full
1.i	A $2,179 past-due account was removed from credit report after dispute. $2,179	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.j	A $4,514 charged-off account in repayment status since 2013 with monthly payments of $100. The account was settled with a final payment in 2017. $4,514	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed for Chapter 7 bankruptcy in 1995, which was discharged in June 1999 ($16,000) and another Chapter 7 bankruptcy ($33,000), which was filed in March 2005 and discharged in June 2005.

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

(c) received/receiving counseling; problem being resolved

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

(e) reasonable, documented basis to dispute the debt

Documented

Financial Counseling

Claimed

Debt Paid in Full

1.b

The SOR alleges eight delinquent debts, including student loans, collection accounts, charged-off accounts, a past-due mortgage payment, which total approximately $33,500.

$33,500

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

(e) reasonable, documented basis to dispute the debt

Documented

Financial Counseling

Claimed

Debt Paid in Full

1.c

The allegation in SOR 1.c, $2,222 collection account, was not Applicant’s debt but it is unclear about the status, although removed from her credit report.

$2,222

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.d

A $1,601 collection account from a credit union was paid, and had been in a payment plan where Applicant paid $42.14 a month.

$1,601

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

1.e

A $1,660 wireless account was not Applicant’s account.

$1,660

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

A $3,510 past-due mortgage account is current and regular payments are being made in the amount of $1,111.04.

$3,510

For Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

Claimed

Debt Paid in Full

1.g

A $4,025 120 days past-due student loan has been rehabilitated and payments of $150 a month have been made since early 2016.

$4,025

For Applicant

Student Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

Claimed

Debt Paid in Full

1.h

A $15,344 charged-off account has been in repayment status since 2016.

$15,344

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

Claimed

Debt Paid in Full

1.i

A $2,179 past-due account was removed from credit report after dispute.

$2,179

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.j

A $4,514 charged-off account in repayment status since 2013 with monthly payments of $100. The account was settled with a final payment in 2017.

$4,514

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

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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

FOOTNOTES