Summary
A 36-year-old Department of Defense contractor applicant was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial irresponsibility. This included a Chapter 7 bankruptcy, filed in December 2003 and discharged in March 2004, and a Chapter 13 bankruptcy filed in April 2003.
Post-bankruptcy, the applicant incurred several delinquent debts. These included a $365 collection account from a university credit union, a $13,528 automobile loan charged off in June 2005, and a $2,214 account that was 120 days past due. A jewelry store account was also listed as past due but showed a zero balance.
Despite entering a repayment agreement for one debt, the applicant failed to demonstrate a good faith effort to resolve the significant car loan debt, for which he continued to drive the vehicle. This lack of mitigation for the outstanding financial concerns led to the denial of his security clearance.
Why the Applicant Was Denied
- Applicant has a history of financial irresponsibility, including a Chapter 7 bankruptcy discharged in March 2004.
- He incurred several delinquent debts post-bankruptcy, including a charged-off car loan of approximately $13,000.
- Insufficient proof was provided to demonstrate a good faith effort to resolve the car loan debt, which he continues to drive.
Conditions Referenced
- FC DC ¶19(a)raisedInability or Unwillingness to Satisfy Debts
- FC DC ¶19(c)raisedA History of Not Meeting Financial Obligations
- FC MC ¶20(a)rejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to RecurApplicant continues to have difficulty meeting his financial obligations even after his bankruptcy discharge.
- FC MC ¶20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlPast financial issues were not recent and did not contribute to current financial situation.
- FC MC ¶20(c)rejectedThe Person Has Received or Is Receiving Counseling for the ProblemAlthough Applicant received counseling, it is too soon to determine if he can maintain payments.
- FC MC ¶20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsApplicant has not demonstrated a good faith effort to resolve the significant debts.
Key Rule Quoted
“The objective of the security clearance process is the fair-minded, commonsense assessment of a person’s life to make an affirmative determination that the person is eligible for assignment to sensitive duties.”
Procedural Posture
- SOR issuedMar 15, 2007
- Answer filedApr 9, 2007Applicant elected for a hearing.
- Hearing heldSep 19, 2007
- Decision dateOct 31, 2007
Cite For
- Financial Irresponsibility Leading to Security Clearance Denial Under Guideline F
- Insufficient Proof of Good Faith Effort to Resolve Debts
- Impact of Post-bankruptcy Delinquent Debts on Security Clearance Eligibility