ISCR Case 15-06782.h1

Case Headnote

ISCR Case No. 15-06782.h1

grantedSep 14, 2017· Hon. Wilford H. Ross· hearing

Summary

A 43-year-old married applicant with three children was granted a security clearance despite initial concerns under Guideline F (Financial Considerations) due to a history of past-due debts and taxes. The Statement of Reasons detailed several financial allegations. The applicant had fully paid a $2,000 federal tax debt stemming from a 2011 retirement fund liquidation. He admitted owing approximately $2,528 in state taxes, towards which he had paid $1,000 and was negotiating a resolution.

Regarding other debts, the applicant owed an automobile finance company $9,384 for a vehicle purchased in December 2010. Payments were interrupted in January 2014 when the company faced federal charges, but he has since re-engaged with the creditor and is making payments. He also admitted a $495 past-due credit card debt, which he intends to resolve, and a $9,462 past-due automobile loan, for which he has a payment arrangement. Two other alleged debts, one of an unknown amount and a $64 medical debt, were found not to be owed by the applicant.

The judge determined that the applicant had taken significant steps to resolve his financial issues. His financial situation stabilized after securing full-time employment, and he demonstrated a credible intent to resolve his remaining debts. These mitigating factors led to the decision to grant the security clearance.

Why the Applicant Prevailed

The applicant demonstrated a credible intent to resolve his past-due debts.
The applicant's financial situation stabilized after gaining full-time employment.
The applicant paid off his federal tax debt and made substantial payments towards state taxes.

Conditions Referenced

Disqualifying

F.1.araisedInability to Satisfy Debts
F.1.craisedHistory of Not Meeting Financial Obligations
F.1.fraisedFailure to File or Fraudulently Filing Income Tax Returns

Mitigating

F.2.aappliedBehavior Happened so Long Ago or Infrequently
F.2.bappliedConditions Largely Beyond the Person's Control
F.2.dappliedGood-faith Effort to Repay Overdue Creditors
F.2.gappliedArrangements with Tax Authority

Key Rule Quoted

“An applicant is not required to show that [he] has completely paid off [his] indebtedness, only that [he] has established a reasonable plan to resolve [his] debts and has taken significant actions to implement that plan.”
— ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008)

Procedural Posture

SOR issuedMay 23, 2016
Answer filedJun 27, 2016
Hearing heldJan 25, 2017
Decision dateSep 14, 2017

Cite For

Mitigation of Financial Issues Under Guideline F
Consideration of Employment Stability in Financial Cases
Good-faith Efforts to Resolve Debts as a Mitigating Factor

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 denied owing the Federal government $2,000 in past-due taxes. The taxes were because of his decision to liquidate his retirement fund from his employment in 2011. He has paid those taxes in full, and does not owe any money to the Federal government for other taxes, as shown in documentation from the IRS. This debt is resolved. $2,000	For Applicant	Tax Unpaid	Denied	—	—	—
1.b	Applicant admitted owing past-due taxes to his home state in the approximate amount of $2,528. He is in negotiation with the state to resolve this debt, and has paid $1,000 towards the taxes. Applicant evinces a credible intent to pay off this debt as soon as possible. It is being resolved. $2,528	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Paid in Full
1.c	Applicant admitted owing an automobile finance company $9,384. He denies that his payments were ever past due. Applicant purchased the vehicle in December 2010. He made consistent monthly payments for three years. When he attempted to make his January 2014 payment he found that the company was the subject of Federal charges and there was now nowhere to send his money. Applicant still had possession of the vehicle, but no title. If he had been able to continue making timely monthly payments, like he had been, the debt would have been paid in July 2016. When Applicant was hired for his current employment he began investigating this debt and discovered that the company was back in business. He began negotiations with the creditor, and is making payments in accordance with an agreement with them. This debt is being resolved. $9,384	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.d	Applicant admitted owing a past-due credit card debt in the amount of $495. Applicant believed that he had paid this debt in the past, but it is still showing as past due on his most recent credit report. Applicant no longer has this credit card. He evinced a credible intent to resolve this debt, if it exists, as soon as possible. $495	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Paid in Full
1.e	Applicant denied owing a past-due debt of an unknown amount to this creditor. He denied having any knowledge of this creditor, or having a debt with them. The credit reports in the record, while stating that a debt was charged off, do not provide a charge-off figure. Based on all the available information, I find the Government has not met their burden on this allegation of showing that Applicant owes any amount to this creditor. It is found for Applicant.	For Applicant	Unspecified Financial	Denied	—	—	—
1.f	Applicant admitted owing a past-due automobile loan in the amount of $9,462. He has reached a payment arrangement with this creditor, and submitted documentation showing that he is making payments in accordance with this agreement. It is being resolved. $9,462	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.g	Applicant denied owing a past-due medical debt in the amount of $64. He has no knowledge of any past-due medical debt, and his research did not reveal any medical debt. The one credit report that shows this debt also states, “Account in Dispute.” Based on all the available information, I find the Government has not met their burden on this allegation of showing that Applicant owes any amount to this creditor. It is found for Applicant. $64	For Applicant	Medical Debt	Denied	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant denied owing the Federal government $2,000 in past-due taxes. The taxes were because of his decision to liquidate his retirement fund from his employment in 2011. He has paid those taxes in full, and does not owe any money to the Federal government for other taxes, as shown in documentation from the IRS. This debt is resolved.

$2,000

For Applicant

Tax Unpaid

Denied

—

1.b

Applicant admitted owing past-due taxes to his home state in the approximate amount of $2,528. He is in negotiation with the state to resolve this debt, and has paid $1,000 towards the taxes. Applicant evinces a credible intent to pay off this debt as soon as possible. It is being resolved.

$2,528

For Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Claimed

Debt Paid in Full

1.c

Applicant admitted owing an automobile finance company $9,384. He denies that his payments were ever past due. Applicant purchased the vehicle in December 2010. He made consistent monthly payments for three years. When he attempted to make his January 2014 payment he found that the company was the subject of Federal charges and there was now nowhere to send his money. Applicant still had possession of the vehicle, but no title. If he had been able to continue making timely monthly payments, like he had been, the debt would have been paid in July 2016. When Applicant was hired for his current employment he began investigating this debt and discovered that the company was back in business. He began negotiations with the creditor, and is making payments in accordance with an agreement with them. This debt is being resolved.

$9,384

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Payment Plan with Creditor

1.d

Applicant admitted owing a past-due credit card debt in the amount of $495. Applicant believed that he had paid this debt in the past, but it is still showing as past due on his most recent credit report. Applicant no longer has this credit card. He evinced a credible intent to resolve this debt, if it exists, as soon as possible.

$495

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Paid in Full

1.e

Applicant denied owing a past-due debt of an unknown amount to this creditor. He denied having any knowledge of this creditor, or having a debt with them. The credit reports in the record, while stating that a debt was charged off, do not provide a charge-off figure. Based on all the available information, I find the Government has not met their burden on this allegation of showing that Applicant owes any amount to this creditor. It is found for Applicant.

For Applicant

Unspecified Financial

Denied

—

1.f

Applicant admitted owing a past-due automobile loan in the amount of $9,462. He has reached a payment arrangement with this creditor, and submitted documentation showing that he is making payments in accordance with this agreement. It is being resolved.

$9,462

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Payment Plan with Creditor

1.g

Applicant denied owing a past-due medical debt in the amount of $64. He has no knowledge of any past-due medical debt, and his research did not reveal any medical debt. The one credit report that shows this debt also states, “Account in Dispute.” Based on all the available information, I find the Government has not met their burden on this allegation of showing that Applicant owes any amount to this creditor. It is found for Applicant.

$64

For Applicant

Medical Debt

Denied

—

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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