ISCR Case 15-07572.h1

Case Headnote

ISCR Case No. 15-07572.h1

grantedOct 10, 2017· Hon. Braden M. Murphy· hearing

Summary

A 38-year-old engineer was granted a security clearance despite concerns under Guideline F (Financial Considerations) stemming from multiple delinquent debts. These financial issues primarily arose from job losses, income reductions, and a divorce. The applicant demonstrated a good-faith effort to resolve these debts.

Specifically, a mortgage account in State 2, with a past-due amount of $19,033 and a total balance of $139,355, was foreclosed in early 2012 and later conveyed back to federal housing authorities, with no money owed. A child support arrearage for his youngest child, initially $16,665 and later $12,040, is being resolved through bi-weekly payments of $288.46 and redirected tax refunds, with $9,247 still owed. Other debts being resolved include a credit card debt of $1,545 (now $820), another credit card debt of $878 (now $97), and a $2,753 rental/leasing debt from a broken lease, for which $125 monthly payments have been arranged. A child support debt of $471 for his eldest son was resolved, and a $520 phone bill was paid.

The applicant denied a $738 charge-off and a $450 medical debt, and questioned the amounts owed on two other medical debts of $387 and $128. He also denied a $358 medical debt, which was insufficiently identified. The clearance was granted because the applicant provided documented evidence of efforts to resolve debts, his financial difficulties were largely due to circumstances beyond his control, and he has made consistent payments, resolving several accounts.

Why the Applicant Prevailed

The applicant provided documented evidence of efforts to resolve delinquent debts.
Financial difficulties were largely due to circumstances beyond the applicant's control, including job losses and divorce.
The applicant has made consistent payments towards debts and has resolved several accounts.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond Control
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts
AG ¶ 20(a)appliedFinancial Problems Unlikely to Recur

Key Rule Quoted

“An applicant is not required to be debt-free nor to develop a plan for paying off all debts immediately or simultaneously.”
— ISCR Case No. 07-06842 at 3 (App. Bd. May 21, 2008)

Procedural Posture

SOR issuedMay 31, 2016
Answer filedJun 27, 2016Applicant elected to proceed without a hearing.
Hearing heldOct 5, 2017Record closed.
Decision dateOct 10, 2017

Cite For

Good-faith Efforts to Resolve Financial Issues Under Guideline F
Impact of Personal Circumstances on Financial Obligations
Criteria for Mitigating Financial Considerations in Security Clearance Cases

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	SOR ¶ 1.a is a mortgage account allegedly in foreclosure, with $19,033 past due, and a total balance of $139,355. The account relates to the home Applicant purchased in State 2 after he moved there in 2007. In his answer, he indicated that he was unable to afford both the mortgage on that home and also his rent in State 3, where he had begun working in 2011. The mortgaged property was foreclosed on in early 2012, around the time of Applicant’s divorce. He provided documentation from the creditor indicating that the home was conveyed back to federal housing authorities in early 2013, and no money is owed. (AE D). This account is resolved. $19,033	For Applicant	Mortgage or Home Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	SOR ¶ 1.b ($16,665) is a child support account for Applicant’s youngest child. Applicant explained that the child support owed is past due because it was calculated retroactively from the date of the divorce decree. He stated that he has been making payments of $79 a month against the delinquency (in addition to his monthly child support requirement) since October 2014 and that he also makes payments through re-channeling of his tax refunds. He is to pay $288.46 every two weeks. As of October 2016, he owed $12,040 in past-due child support. (Court order provided with Answer, AE A, AE E, AE K) Applicant’s most recent submissions establish that he has made bi-weekly payments of $288.46 since early 2015. He also made large payments in the spring of 2015, 2016 and 2017, which are likely redirected tax refunds. He still owes an arrearage of $9,247, though he has made child support payments of almost $25,000 in this manner over the last three years. (AE F, AE Q) This account is being resolved. $16,665	For Applicant	Child Support 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 (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	SOR ¶ 1.c ($1,545) is a credit card debt in collection. Applicant provided documentation indicating that he makes regular $25 payments on the debt, and now owes $820. (AE R). This debt is being resolved. $1,545	For Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.d	SOR ¶ 1.d ($878) is another credit card debt in collection. Applicant provided documentation that he regularly pays $26 a month on the account, and now owes $97. He will finish paying this debt in December 2017. (AE F, AE M) This account is being resolved. $878	For Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.e	Applicant denied SOR ¶ 1.e (a $738 charge off) and said he did not borrow money from that bank. His May 2015 credit report indicates that the account was opened in January 2009, and became past due two years later. The bank’s address is in Applicant’s home state (State 1). (Item 6 at 3) Applicant took a similar position in his background interview. He indicated that he was contacted by the bank, and informed that a loan account had been set up for him. Applicant went to the bank to challenge it but was not able to obtain verifying information. (Item 4 at 5) $738	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Disputed with Creditor
1.f	SOR ¶ 1.f ($2,753) is a rental/leasing account from an apartment where Applicant lived after his divorce. Applicant acknowledged that he broke the lease. He stated in his answer and FORM Response that he had been paying on the debt for the last 15 months, but provided no documentation. More recently, he indicated that he has now arranged a $125 monthly payments to resolve the debt. The debt is now being resolved. $2,753	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Payment Plan with Creditor
1.g	SOR ¶ 1.g ($471) is a child support account for Applicant’s eldest son. It was listed as delinquent on his April 2015 credit report. (Item 6 at 4) His April 2016 credit report reflected that the account was current, with a balance due of $422. (Item 5 at 3) Applicant explained in his answer that the debt was due to a delay in starting payments from a new job. His son graduated from high school in May 2017, so Applicant no longer has a child-support obligation, no arrearage is owed, and money is no longer being taken out of his pay at $600 a month. (AE F, AE I, AE O). This debt is resolved. $471	For Applicant	Child Support Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Documented Debt Paid in Full
1.h	SOR ¶ 1.h ($520) is a phone bill. Applicant was not aware it was past due until he received the SOR. The debt has been paid. (AE P) $520	For Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Documented Debt Paid in Full
1.i	SOR ¶ 1.i ($450) is a past-due medical debt related to dental treatment for Applicant’s son. Applicant has denied responsibility for the debt on the grounds that his ex-wife arranged the appointment without authorization from Applicant. (Item 6 at 7). $450	For Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Disputed with Creditor
1.j	SOR ¶ 1.j ($387) is a medical debt owed to the same collection agency. Applicant admits both debts but questions the amount the collection agency says he owes. He indicated that he is in contact with the creditor to determine what he owes. $387	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Disputed with Creditor
1.k	SOR ¶ 1.k ($128) is a medical debt owed to the same collection agency. Applicant admits both debts but questions the amount the collection agency says he owes. He indicated that he is in contact with the creditor to determine what he owes. $128	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Disputed with Creditor
1.l	SOR ¶ 1.l ($358) is a past-due medical debt, listed on Applicant’s April 2016 credit report. Applicant denied the debt, and said he did not recognize it. The creditor is not sufficiently identified on Item 6 for Applicant to attempt to resolve the debt. $358	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Debt Disputed with Creditor

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

SOR ¶ 1.a is a mortgage account allegedly in foreclosure, with $19,033 past due, and a total balance of $139,355. The account relates to the home Applicant purchased in State 2 after he moved there in 2007. In his answer, he indicated that he was unable to afford both the mortgage on that home and also his rent in State 3, where he had begun working in 2011. The mortgaged property was foreclosed on in early 2012, around the time of Applicant’s divorce. He provided documentation from the creditor indicating that the home was conveyed back to federal housing authorities in early 2013, and no money is owed. (AE D). This account is resolved.

$19,033

For Applicant

Mortgage or Home Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

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

Documented

Debt Paid in Full

1.b

SOR ¶ 1.b ($16,665) is a child support account for Applicant’s youngest child. Applicant explained that the child support owed is past due because it was calculated retroactively from the date of the divorce decree. He stated that he has been making payments of $79 a month against the delinquency (in addition to his monthly child support requirement) since October 2014 and that he also makes payments through re-channeling of his tax refunds. He is to pay $288.46 every two weeks. As of October 2016, he owed $12,040 in past-due child support. (Court order provided with Answer, AE A, AE E, AE K) Applicant’s most recent submissions establish that he has made bi-weekly payments of $288.46 since early 2015. He also made large payments in the spring of 2015, 2016 and 2017, which are likely redirected tax refunds. He still owes an arrearage of $9,247, though he has made child support payments of almost $25,000 in this manner over the last three years. (AE F, AE Q) This account is being resolved.

$16,665

For Applicant

Child Support 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

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

Documented

Debt Paid in Full

1.c

SOR ¶ 1.c ($1,545) is a credit card debt in collection. Applicant provided documentation indicating that he makes regular $25 payments on the debt, and now owes $820. (AE R). This debt is being resolved.

$1,545

For Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

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

Documented

Debt Paid in Full

1.d

SOR ¶ 1.d ($878) is another credit card debt in collection. Applicant provided documentation that he regularly pays $26 a month on the account, and now owes $97. He will finish paying this debt in December 2017. (AE F, AE M) This account is being resolved.

$878

For Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

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

Documented

Debt Paid in Full

1.e

Applicant denied SOR ¶ 1.e (a $738 charge off) and said he did not borrow money from that bank. His May 2015 credit report indicates that the account was opened in January 2009, and became past due two years later. The bank’s address is in Applicant’s home state (State 1). (Item 6 at 3) Applicant took a similar position in his background interview. He indicated that he was contacted by the bank, and informed that a loan account had been set up for him. Applicant went to the bank to challenge it but was not able to obtain verifying information. (Item 4 at 5)

$738

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Disputed with Creditor

1.f

SOR ¶ 1.f ($2,753) is a rental/leasing account from an apartment where Applicant lived after his divorce. Applicant acknowledged that he broke the lease. He stated in his answer and FORM Response that he had been paying on the debt for the last 15 months, but provided no documentation. More recently, he indicated that he has now arranged a $125 monthly payments to resolve the debt. The debt is now being resolved.

$2,753

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Payment Plan with Creditor

1.g

SOR ¶ 1.g ($471) is a child support account for Applicant’s eldest son. It was listed as delinquent on his April 2015 credit report. (Item 6 at 4) His April 2016 credit report reflected that the account was current, with a balance due of $422. (Item 5 at 3) Applicant explained in his answer that the debt was due to a delay in starting payments from a new job. His son graduated from high school in May 2017, so Applicant no longer has a child-support obligation, no arrearage is owed, and money is no longer being taken out of his pay at $600 a month. (AE F, AE I, AE O). This debt is resolved.

$471

For Applicant

Child Support Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Documented

Debt Paid in Full

1.h

SOR ¶ 1.h ($520) is a phone bill. Applicant was not aware it was past due until he received the SOR. The debt has been paid. (AE P)

$520

For Applicant

Utility or Phone Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Documented

Debt Paid in Full

1.i

SOR ¶ 1.i ($450) is a past-due medical debt related to dental treatment for Applicant’s son. Applicant has denied responsibility for the debt on the grounds that his ex-wife arranged the appointment without authorization from Applicant. (Item 6 at 7).

$450

For Applicant

Medical Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Disputed with Creditor

1.j

SOR ¶ 1.j ($387) is a medical debt owed to the same collection agency. Applicant admits both debts but questions the amount the collection agency says he owes. He indicated that he is in contact with the creditor to determine what he owes.

$387

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Disputed with Creditor

1.k

SOR ¶ 1.k ($128) is a medical debt owed to the same collection agency. Applicant admits both debts but questions the amount the collection agency says he owes. He indicated that he is in contact with the creditor to determine what he owes.

$128

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Disputed with Creditor

1.l

SOR ¶ 1.l ($358) is a past-due medical debt, listed on Applicant’s April 2016 credit report. Applicant denied the debt, and said he did not recognize it. The creditor is not sufficiently identified on Item 6 for Applicant to attempt to resolve the debt.

$358

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Debt Disputed with Creditor

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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