Summary
A 49-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial difficulties. The applicant's Chapter 13 bankruptcy, filed in March 2015 with over $800,000 in liabilities, was dismissed because required plan payments were not made. This bankruptcy filing had stayed foreclosure proceedings on his home, which began around 2009 due to delinquent mortgage payments. The applicant refiled a second Chapter 13 action in August 2016 and has owed federal taxes since 2007. Evidence of financial counseling was presented.
Disqualifying conditions under Guideline F were raised, including a history of not meeting financial obligations, an inability or unwillingness to satisfy debts, and a history of financial problems. Mitigating conditions considered included the debt not being caused by irresponsible spending, the applicant having received financial counseling, and the applicant having initiated a good-faith effort to resolve the debt.
Ultimately, the clearance was denied because the applicant's initial Chapter 13 bankruptcy was dismissed due to delinquent payments, and federal tax liens totaling over $75,000 remained unresolved. The judge concluded that the applicant's financial problems were recent and likely to recur, indicating a failure to mitigate the security concerns.
Why the Applicant Was Denied
- Applicant's Chapter 13 bankruptcy was dismissed due to delinquent payments.
- Federal tax liens totaling over $75,000 remained unresolved.
- Applicant's financial problems were recent and not unlikely to recur.
Conditions Referenced
- F.1.araisedInability to Satisfy Debts
- F.1.braisedUnwillingness to Satisfy Debts
- F.1.craisedHistory of Not Meeting Financial Obligations
- F.1.fraisedFailure to File or Fraudulently Filing Income Tax Returns
- F.2.bappliedConditions Largely Beyond the Person's ControlApplicant's reliance on his wife's financial management while deployed was considered.
- F.2.cappliedReceived Financial CounselingEvidence of financial counseling was provided.
- F.2.dappliedGood-faith Effort to Repay CreditorsApplicant attempted to negotiate a mortgage modification.
Key Rule Quoted
“The protection of the national security is the paramount consideration.”
Procedural Posture
- SOR issuedAug 9, 2016
- Answer filedAug 22, 2016
- Hearing held—Decided on the written record.
- Decision dateOct 18, 2017
Cite For
- Denial of Security Clearance Due to Unresolved Financial Obligations
- Impact of Dismissed Bankruptcy on Security Clearance Eligibility
- Consideration of Financial Counseling in Mitigating Conditions Under Guideline F