ISCR Case 15-06587.h1

Case Headnote

ISCR Case No. 15-06587.h1

deniedOct 18, 2017· Hon. Wilford H. Ross· hearing

Summary

A 47-year-old retired Navy veteran was denied a security clearance under Guideline F, Financial Considerations, due to a history of unresolved financial issues. The applicant had filed for Chapter 7 bankruptcy three times: in March 1996, which was discharged in June 1996 due to increased child support payments and involved approximately $10,000 in credit card and smaller debts; and again in February 2016, listing between $100,001 and $500,000 in liabilities. No discharge documentation was provided for the 2016 bankruptcy.

The applicant also had several outstanding delinquent debts. These included a 2013 judgment for $622, which the applicant claimed was listed in his 2016 bankruptcy but provided no documentation of discharge. Other admitted debts included medical bills of $36 and $128, charged-off debts of $1,125, $457, and $450, and past-due debts of $778, $1,649, $722, $1,160, and $1,745. For all these debts, the applicant stated they were listed in his 2016 bankruptcy, but no supporting documentation of discharge or resolution was provided.

Additionally, the applicant admitted to a state tax lien of approximately $873, claiming it was paid in full, but offered no documentation to support this. The judge found that the applicant failed to demonstrate that his financial issues were under control or that he had made efforts to resolve the nearly $10,000 in delinquent debt, leading to concerns about his reliability and trustworthiness. The security clearance was therefore denied.

Why the Applicant Was Denied

Applicant filed three Chapter 7 bankruptcies between 1996 and 2016, with the most recent in February 2016, which has not been discharged.
Applicant has almost $10,000 in delinquent debt that he did not show has been paid or resolved.
Applicant did not provide evidence that his financial difficulties are under control.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Key Rule Quoted

“Failure to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information.”

Procedural Posture

SOR issuedMar 25, 2016
Answer filedApr 9, 2016
Hearing held—Decided on the written record without a hearing.
Decision dateOct 18, 2017

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues
Impact of Multiple Bankruptcies on Security Eligibility
Failure to Provide Evidence of Financial Stability as a Basis for Denial Under Guideline F

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 admitted that he had filed for Chapter 7 bankruptcy protection in February 2016. Applicant indicated in the petition that he had taken the credit counseling required by bankruptcy law. In the petition Applicant admitted having between $100,001 to $500,000 in liabilities. The FORM does not contain a copy of the bankruptcy schedules that contain a listing of the debts Applicant wishes to discharge in bankruptcy, or a copy of any discharge. Applicant did not respond to the FORM with either one of these documents.	Against Applicant	Bankruptcy Filing	Admitted	—	—	—
1.b	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.c	Applicant has filed for Chapter 7 bankruptcy three times. The first time was in March 1996. He received a discharge in June 1996. According to Applicant this bankruptcy was filed because of financial hardship brought about by paying increased child support. In a sworn statement dated August 9, 2004, Applicant said, “I claimed about $10,000 on the bankruptcy and included all open accounts. The accounts were mostly credit cards and smaller debts.” No additional documentation concerning this bankruptcy was presented.	Against Applicant	Bankruptcy Filing	Admitted	—	—	—
1.d	Applicant denied that he had a judgment filed against him in 2013 in the amount of $622. He stated in his Answer, “I was never served with court papers or notified in any way of the court hearing.” Support for this debt was found in 2015 and 2016 credit reports. Applicant further stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt because he had been advised that the judgment would not be reversed. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $622	Against Applicant	Judgment Against Applicant	Denied with Explanation	—	—	—
1.e	Applicant admitted owing a medical creditor $36 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $36	Against Applicant	Medical Debt	Admitted	—	—	—
1.f	Applicant admitted owing a medical creditor $128 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $128	Against Applicant	Medical Debt	Admitted	—	—	—
1.g	Applicant admitted owing a creditor $1,125 for a charged-off debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $1,125	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant admitted owing a creditor $457 for a charged-off debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $457	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Applicant admitted owing a creditor $450 for a charged-off debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $450	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.j	Applicant admitted owing a creditor $778 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $778	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.k	Applicant admitted owing a creditor $1,649 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $1,649	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.l	Applicant admitted owing a creditor $722 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $722	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.m	Applicant admitted owing a creditor $1,160 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $1,160	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.n	Applicant admitted owing a bank $1,745 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved. $1,745	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.o	Applicant admitted that he had received a tax lien from his state taxing authority concerning back taxes. The lien was in the approximate amount of $873. Applicant stated in his Answer that this debt has been paid in full, but provided no documentation to support that statement. This debt is not resolved. $873	Against Applicant	Tax Unpaid	Admitted	—	—	—
1.p	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant admitted that he had filed for Chapter 7 bankruptcy protection in February 2016. Applicant indicated in the petition that he had taken the credit counseling required by bankruptcy law. In the petition Applicant admitted having between $100,001 to $500,000 in liabilities. The FORM does not contain a copy of the bankruptcy schedules that contain a listing of the debts Applicant wishes to discharge in bankruptcy, or a copy of any discharge. Applicant did not respond to the FORM with either one of these documents.

Against Applicant

Bankruptcy Filing

Admitted

—

1.b

specific text not stated in this decision

Against Applicant

Unspecified Financial

Unknown

—

1.c

Applicant has filed for Chapter 7 bankruptcy three times. The first time was in March 1996. He received a discharge in June 1996. According to Applicant this bankruptcy was filed because of financial hardship brought about by paying increased child support. In a sworn statement dated August 9, 2004, Applicant said, “I claimed about $10,000 on the bankruptcy and included all open accounts. The accounts were mostly credit cards and smaller debts.” No additional documentation concerning this bankruptcy was presented.

Against Applicant

Bankruptcy Filing

Admitted

—

1.d

Applicant denied that he had a judgment filed against him in 2013 in the amount of $622. He stated in his Answer, “I was never served with court papers or notified in any way of the court hearing.” Support for this debt was found in 2015 and 2016 credit reports. Applicant further stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt because he had been advised that the judgment would not be reversed. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$622

Against Applicant

Judgment Against Applicant

Denied with Explanation

—

1.e

Applicant admitted owing a medical creditor $36 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$36

Against Applicant

Medical Debt

Admitted

—

1.f

Applicant admitted owing a medical creditor $128 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$128

Against Applicant

Medical Debt

Admitted

—

1.g

Applicant admitted owing a creditor $1,125 for a charged-off debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$1,125

Against Applicant

Unspecified Financial

Admitted

—

1.h

Applicant admitted owing a creditor $457 for a charged-off debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$457

Against Applicant

Unspecified Financial

Admitted

—

1.i

Applicant admitted owing a creditor $450 for a charged-off debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$450

Against Applicant

Unspecified Financial

Admitted

—

1.j

Applicant admitted owing a creditor $778 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$778

Against Applicant

Unspecified Financial

Admitted

—

1.k

Applicant admitted owing a creditor $1,649 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$1,649

Against Applicant

Unspecified Financial

Admitted

—

1.l

Applicant admitted owing a creditor $722 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$722

Against Applicant

Unspecified Financial

Admitted

—

1.m

Applicant admitted owing a creditor $1,160 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$1,160

Against Applicant

Unspecified Financial

Admitted

—

1.n

Applicant admitted owing a bank $1,745 for a past-due debt. Applicant stated in his Answer that he had listed this debt in his 2016 bankruptcy as an unsecured debt. No documentation was submitted supporting that statement, or that the debt has been discharged. This debt is not resolved.

$1,745

Against Applicant

Unspecified Financial

Admitted

—

1.o

Applicant admitted that he had received a tax lien from his state taxing authority concerning back taxes. The lien was in the approximate amount of $873. Applicant stated in his Answer that this debt has been paid in full, but provided no documentation to support that statement. This debt is not resolved.

$873

Against Applicant

Tax Unpaid

Admitted

—

1.p

specific text not stated in this decision

Against Applicant

Unspecified Financial

Unknown

—

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Case Profile

Summary

Why the Applicant Was Denied

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