ISCR Case 15-08303.h1

Case Headnote

ISCR Case No. 15-08303.h1

grantedAug 8, 2017· Hon. Mark W. Harvey· hearing

Summary

A 47-year-old software engineer and defense contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) alleged five delinquent debts totaling $8,189, which had been discharged in a 2008 Chapter 7 bankruptcy. The applicant's financial difficulties stemmed from an inability to afford increased variable mortgage payments and vehicle payments, leading to repossession.

However, the applicant demonstrated significant mitigation of these concerns. One debt of $495 was satisfied, and the creditor confirmed the account would be updated. Another debt of $1,272 was reduced to zero after a $636 payment. A telecommunications debt of $101 was also paid. For a $4,730 debt, the applicant entered a settlement agreement for $2,365 and was making monthly payments, reducing the current balance to $1,774. Similarly, for a $1,591 debt, a $500 payment was made, with ongoing monthly payments reducing the balance to $641.

The judge found that the applicant's financial issues were mitigated, noting a commitment to resolving obligations and a track record of paying or resolving debts. The total outstanding debt was reduced to $2,415, with payments actively being made on the remaining two accounts. This demonstrated financial responsibility and an improved financial situation following the 2008 bankruptcy discharge, leading to the granting of the security clearance.

Why the Applicant Prevailed

The applicant's debts were significantly reduced and he demonstrated a commitment to resolving his financial obligations.
Three of the debts were paid, and he was making payments on the remaining two debts.
The applicant's financial situation improved after his bankruptcy discharge, and he has a track record of paying or resolving debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”

Procedural Posture

SOR issuedMar 18, 2016
Answer filedApr 15, 2016Applicant did not request a hearing.
Hearing held—
Decision dateAug 8, 2017

Cite For

Mitigation of Financial Considerations Under Guideline F
Demonstrating a Good-faith Effort to Resolve Debts
Impact of Bankruptcy Discharge on Security Clearance Eligibility

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 alleges Applicant owes a delinquent debt for $495. On September 9, 2016, the creditor wrote that the account has been satisfied, and Applicant’s credit record will be updated accordingly. $495	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	—
1.b	SOR ¶ 1.b alleges Applicant owes a delinquent debt for $1,272. On September 9, 2016, the creditor wrote that $636 was received from Applicant on April 15, 2016, and the balance due was zero. $1,272	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	—
1.c	SOR ¶ 1.c alleges Applicant owes a delinquent telecommunications debt for $101. The creditor provided an undated letter indicating Applicant’s telecommunications account was paid. $101	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	—
1.d	SOR ¶ 1.d alleges Applicant owes a delinquent debt for $4,730. On September 9, 2016, the creditor sent Applicant a settlement agreement indicating the settlement balance was $2,365, with $296 monthly payments due from August 31, 2016, to March 17, 2017. His current balance owed is $1,774. $4,730	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	—
1.e	SOR ¶ 1.e alleges Applicant owes a delinquent debt for $1,591. On September 9, 2016, the creditor wrote that $500 was received towards Applicant’s balance, and additional payments were expected on a monthly basis. His current balance owed is $641. $1,591	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	—
1.f	SOR ¶ 1.f alleges Applicant’s nonpriority unsecured debts were discharged under Chapter 7 of the Bankruptcy Code in March 2008. Applicant took out a variable interest rate mortgage loan, and his monthly mortgage payments increased from $800 to $1,400. He was unable to afford his mortgage payments. He could not afford his vehicle payments, and his vehicle was repossessed. After his unsecured nonpriority debts were discharged in March 2008, he received a fresh financial start.	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (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	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

SOR ¶ 1.a alleges Applicant owes a delinquent debt for $495. On September 9, 2016, the creditor wrote that the account has been satisfied, and Applicant’s credit record will be updated accordingly.

$495

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

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

—

1.b

SOR ¶ 1.b alleges Applicant owes a delinquent debt for $1,272. On September 9, 2016, the creditor wrote that $636 was received from Applicant on April 15, 2016, and the balance due was zero.

$1,272

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

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

—

1.c

SOR ¶ 1.c alleges Applicant owes a delinquent telecommunications debt for $101. The creditor provided an undated letter indicating Applicant’s telecommunications account was paid.

$101

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

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

—

1.d

SOR ¶ 1.d alleges Applicant owes a delinquent debt for $4,730. On September 9, 2016, the creditor sent Applicant a settlement agreement indicating the settlement balance was $2,365, with $296 monthly payments due from August 31, 2016, to March 17, 2017. His current balance owed is $1,774.

$4,730

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

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

—

1.e

SOR ¶ 1.e alleges Applicant owes a delinquent debt for $1,591. On September 9, 2016, the creditor wrote that $500 was received towards Applicant’s balance, and additional payments were expected on a monthly basis. His current balance owed is $641.

$1,591

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

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

—

1.f

SOR ¶ 1.f alleges Applicant’s nonpriority unsecured debts were discharged under Chapter 7 of the Bankruptcy Code in March 2008. Applicant took out a variable interest rate mortgage loan, and his monthly mortgage payments increased from $800 to $1,400. He was unable to afford his mortgage payments. He could not afford his vehicle payments, and his vehicle was repossessed. After his unsecured nonpriority debts were discharged in March 2008, he received a fresh financial start.

For Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(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

—

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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

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES