ISCR Case 15-06773.h1

Case Headnote

ISCR Case No. 15-06773.h1

grantedOct 19, 2017· Hon. Marc E. Curry· hearing

Summary

A 55-year-old engineer was granted a security clearance despite a history of financial difficulties, specifically delinquent debts under Guideline F (Financial Considerations). The Statement of Reasons detailed several financial issues, including a 2014 home foreclosure that resulted in a $43,996 deficiency after a $284,405 delinquency. A second mortgage holder also foreclosed, obtaining a $71,018 judgment, for which the applicant began making payments in 2016 under a forbearance agreement.

The applicant had resolved several other debts, including approximately $32,000 in consolidated credit card accounts by May 2017, and a $16,389 credit union debt by September 2017, though he lacked documentary proof for the latter. He also claimed to have paid approximately $3,500 across two other debts but could not obtain verification. Ongoing efforts included negotiating settlement for a $41,309 debt, negotiating payment plans for approximately $26,000 across three accounts, and his spouse arranging a payment plan for an $11,392 credit card debt and resolving a $52 medical bill, with plans to pay the remaining $2,850 in medical bills.

The judge granted the clearance, finding that the applicant had made significant progress in resolving his debts and managing his finances. The decision highlighted that the applicant demonstrated his delinquent debts were being resolved, provided credible evidence of payments, and that he and his wife had not incurred new debt in eight years, establishing a structured repayment plan.

Why the Applicant Prevailed

The applicant demonstrated that his delinquent debts are being resolved and that his finances are under control.
He provided credible evidence of payments made towards the majority of his debts.
The applicant and his wife have not incurred new debt in eight years and have a structured repayment plan.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceiving Counseling for the Problem
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors

Key Rule Quoted

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

Procedural Posture

SOR issuedFeb 21, 2016
Answer filedApr 6, 2016Applicant requested a decision based on the administrative record.
Hearing held—No hearing; decision based on the record.
Decision dateOct 19, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Evidence of Financial Rehabilitation and Control
Consideration of Personal Circumstances Affecting Financial Stability

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 sought a loan modification. After a lengthy, four-year process, the bank rejected the loan modification. In 2013, the bank initiated foreclosure proceedings, alleging a $284,405 delinquency. In 2014, the home was foreclosed and resold, leaving a deficiency of $43,996. $43,996	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	—
1.b	Subparagraphs 1.b and 1.j, totaling approximately $32,000, constitute delinquent credit card accounts owed to the same bank. Applicant contacted the creditor and consolidated these accounts. By May 2017, he had satisfied them. $32,000	For Applicant	Credit Card 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	—
1.c	Subparagraph 1.c, totaling $16,389, is a debt that Applicant originally incurred with a credit union. By September 2017, Applicant had satisfied the debt, but was unable to obtain documentary proof. $16,389	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	—
1.d	The holder of the second mortgage of Applicant’s home also foreclosed the property, obtaining a judgment for $71,018. In 2016, Applicant negotiated a tolling and forbearance agreement with the bank in which the bank agreed to forego legal action, so long as Applicant began satisfying the judgment, through $500 in payments beginning in March 2016, followed by $200 monthly payments thereafter. $71,018	For Applicant	Judgment Against Applicant	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	—
1.e	Subparagraph 1.e totals $41,309. In September 2017, Applicant contacted the creditor to begin settlement negotiations. $41,309	For Applicant	Unspecified Financial	Unknown	(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	—
1.f	Subparagraphs 1.f, 1.h, and 1.i, collectively totaling approximately $26,000, have been assigned to the same collection agent. Applicant has contacted the creditor and is negotiating a payment plan. $26,000	For Applicant	Unspecified Financial	Unknown	(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	—
1.g	Subparagraph 1.g, totaling $11,392, is a credit card debt that has been assigned to a collection agent. In September 2017, Applicant’s spouse contacted the creditor and arranged a payment plan. $11,392	For Applicant	Credit Card Debt	Unknown	(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	—
1.h	Subparagraphs 1.f, 1.h, and 1.i, collectively totaling approximately $26,000, have been assigned to the same collection agent. Applicant has contacted the creditor and is negotiating a payment plan. $26,000	For Applicant	Unspecified Financial	Unknown	(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	—
1.i	Subparagraphs 1.f, 1.h, and 1.i, collectively totaling approximately $26,000, have been assigned to the same collection agent. Applicant has contacted the creditor and is negotiating a payment plan. $26,000	For Applicant	Unspecified Financial	Unknown	(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	—
1.j	Subparagraphs 1.b and 1.j, totaling approximately $32,000, constitute delinquent credit card accounts owed to the same bank. Applicant contacted the creditor and consolidated these accounts. By May 2017, he had satisfied them. $32,000	For Applicant	Credit Card 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	—
1.k	Applicant contends that he paid the debts owed to the creditors alleged in subparagraphs 1.k and 1.l, totaling approximately $3,500. He contacted both creditors for verification, but neither creditor agreed to provide it. $3,500	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	—
1.l	Applicant contends that he paid the debts owed to the creditors alleged in subparagraphs 1.k and 1.l, totaling approximately $3,500. He contacted both creditors for verification, but neither creditor agreed to provide it. $3,500	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	—
1.m	The debt alleged in subparagraph 1.m is a medical bill totaling $52. It is one of several medical bills that Applicant’s wife incurred, related to a hospitalization in 2015, collectively totaling $2,850. In September 2017, she contacted the creditor. She satisfied the debt alleged in subparagraph 1.m, and will begin paying the remainder in $100 monthly increments. $52	For Applicant	Medical Debt	Unknown	(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	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant sought a loan modification. After a lengthy, four-year process, the bank rejected the loan modification. In 2013, the bank initiated foreclosure proceedings, alleging a $284,405 delinquency. In 2014, the home was foreclosed and resold, leaving a deficiency of $43,996.

$43,996

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

—

1.b

Subparagraphs 1.b and 1.j, totaling approximately $32,000, constitute delinquent credit card accounts owed to the same bank. Applicant contacted the creditor and consolidated these accounts. By May 2017, he had satisfied them.

$32,000

For Applicant

Credit Card 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

—

1.c

Subparagraph 1.c, totaling $16,389, is a debt that Applicant originally incurred with a credit union. By September 2017, Applicant had satisfied the debt, but was unable to obtain documentary proof.

$16,389

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

—

1.d

The holder of the second mortgage of Applicant’s home also foreclosed the property, obtaining a judgment for $71,018. In 2016, Applicant negotiated a tolling and forbearance agreement with the bank in which the bank agreed to forego legal action, so long as Applicant began satisfying the judgment, through $500 in payments beginning in March 2016, followed by $200 monthly payments thereafter.

$71,018

For Applicant

Judgment Against Applicant

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

—

1.e

Subparagraph 1.e totals $41,309. In September 2017, Applicant contacted the creditor to begin settlement negotiations.

$41,309

For Applicant

Unspecified Financial

Unknown

(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

—

1.f

Subparagraphs 1.f, 1.h, and 1.i, collectively totaling approximately $26,000, have been assigned to the same collection agent. Applicant has contacted the creditor and is negotiating a payment plan.

$26,000

For Applicant

Unspecified Financial

Unknown

(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

—

1.g

Subparagraph 1.g, totaling $11,392, is a credit card debt that has been assigned to a collection agent. In September 2017, Applicant’s spouse contacted the creditor and arranged a payment plan.

$11,392

For Applicant

Credit Card Debt

Unknown

(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

—

1.h

Subparagraphs 1.f, 1.h, and 1.i, collectively totaling approximately $26,000, have been assigned to the same collection agent. Applicant has contacted the creditor and is negotiating a payment plan.

$26,000

For Applicant

Unspecified Financial

Unknown

(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

—

1.i

Subparagraphs 1.f, 1.h, and 1.i, collectively totaling approximately $26,000, have been assigned to the same collection agent. Applicant has contacted the creditor and is negotiating a payment plan.

$26,000

For Applicant

Unspecified Financial

Unknown

(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

—

1.j

$32,000

For Applicant

Credit Card 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

—

1.k

Applicant contends that he paid the debts owed to the creditors alleged in subparagraphs 1.k and 1.l, totaling approximately $3,500. He contacted both creditors for verification, but neither creditor agreed to provide it.

$3,500

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

—

1.l

$3,500

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

—

1.m

The debt alleged in subparagraph 1.m is a medical bill totaling $52. It is one of several medical bills that Applicant’s wife incurred, related to a hospitalization in 2015, collectively totaling $2,850. In September 2017, she contacted the creditor. She satisfied the debt alleged in subparagraph 1.m, and will begin paying the remainder in $100 monthly increments.

$52

For Applicant

Medical Debt

Unknown

(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

—

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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