ISCR Case 07-14462.h1

Case Headnote

ISCR Case No. 07-14462.h1

grantedJun 3, 2008· Hon. Edward W. Loughran· hearing

Summary

A 40-year-old defense contractor employee was granted a security clearance despite concerns under Guideline F (Financial Considerations). The applicant had a history of financial difficulties, including multiple bankruptcies and delinquent debts totaling approximately $10,742. These issues included a satisfied judgment for a veterinarian bill, a bank debt discharged in bankruptcy, and an admitted debt to a collection company for which she was making payments.

Further financial concerns involved a judgment for unpaid rent, which the applicant agreed to pay in installments, and a debt to a collection company for nine delinquent accounts, some of which were discharged in bankruptcy, with the remaining balance being actively paid. Another collection debt was also found to have been discharged in bankruptcy.

The judge determined that the applicant's financial problems were largely due to circumstances beyond her control, such as her ex-husband's medical problems and her own unemployment. The applicant demonstrated responsible behavior by actively working to resolve her debts, including making good-faith efforts to repay overdue creditors. Her current financial situation was stable, and she was living with a financially secure partner, leading to the decision to grant her security clearance.

Why the Applicant Prevailed

The applicant's financial difficulties were largely due to circumstances beyond her control, including her ex-husband's medical issues and her own unemployment.
The applicant has shown a good-faith effort to repay overdue creditors and resolve her debts.
The applicant's current financial situation is stable, and she is living with a financially secure partner.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
AG ¶ 20(c)rejectedThe Person Has Received or Is Receiving Counseling for the Problem And/or There Are Clear Indications That the Problem Is Being Resolved or Is Under ControlThe applicant has not received financial counseling.

Key Rule Quoted

“An applicant is not required to establish that she has paid every debt listed in the SOR. All that is required is that an applicant must demonstrate that she has established a plan to resolve her financial problems and taken significant actions to implement that plan.”
— ADP Case No. 06-18900 at 4 (App. Bd. Jun. 6, 2008)

Procedural Posture

SOR issuedMar 6, 2008
Answer filedApr 7, 2008
Hearing heldJun 3, 2008
Decision date—

Cite For

Mitigation of Financial Issues Under Guideline F Due to Circumstances Beyond Control
Good-faith Efforts to Resolve Debts
Whole Person Concept in Evaluating Financial Responsibility

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	A veterinarian obtained a judgment against Applicant for $2,647, for a vet bill for the horse. The judgment has been fully satisfied. $2,647	For Applicant	Judgment Against Applicant	Denied	—	—	—
1.b	SOR ¶ 1.b lists a debt of $1,108 to a bank. Applicant does not deny that she owed this debt, but stated it was discharged in bankruptcy under another name. The debt is listed on the credit reports with the last activity occurring in early 2003. The name in the allegation is a bank and the name of the debt included in the bankruptcy is a credit card. Applicant would have no reason to omit this debt from the bankruptcy. I find this debt was discharged in bankruptcy. $1,108	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant admitted owing the debt of $907 to a collection company on behalf of a credit card company, as alleged in SOR ¶ 1.c. She has agreed to make payments of $100 per month. In her post-hearing submission, she submitted a statement from the creditor as proof of payment. While she did not submit a copy of a cancelled check or a receipt of payment, the statement indicated that the debt was down to $807. $907	For Applicant	Credit Card Debt	Admitted	—	—	—
1.d	When Applicant separated from her ex-husband, she moved to a person’s home and paid rent. Applicant paid the rent for a period and then was unable to make the rent payments. She moved out owing rent. The landlord obtained a judgment against Applicant for $924, as alleged in SOR ¶ 1.d. Applicant did not believe she owed the entire amount as she gave the landlord a refrigerator, washer, and dryer. However, she did not fight the lawsuit and agrees that she is legally responsible for the entire judgment. Applicant and the landlord signed an agreement wherein Applicant promised to pay $100 per month until the judgment was paid. $924	For Applicant	Judgment Against Applicant	Denied with Explanation	—	—	—
1.e	SOR ¶ 1.e lists a debt of $4,145 to a collection company for nine delinquent accounts. The credit report of February 6, 2007, lists the nine accounts to the collection company. The names of the original creditors are not listed. None of the debts are listed on the credit report of February 21, 2008. Applicant stated several of the original debts were discharged in her bankruptcy. She provided a statement from the collection company showing she still owed on four medical accounts. She made five payments of $100 each between January 2008 and May 29, 2008, with a remaining balance of $966. $4,145	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	Applicant does not deny that she owed debt of $372 to a collection company, as alleged in SOR ¶ 1.f, but she stated it was discharged in bankruptcy under a different name. The debt is listed on the credit report of February 6, 2007. It is listed under two different names in the credit report of February 21, 2008. Applicant stated this debt was included in the Schedule of Post-Petition Debt for her bankruptcy. One of the names listed on the credit report of February 21, 2008, is listed to be served a copy of the Petition. The evidence supports Applicant’s assertion that this debt was discharged in bankruptcy. $372	For Applicant	Unspecified Financial	Denied with Explanation	—	—	—
1.g–1.m	7 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

A veterinarian obtained a judgment against Applicant for $2,647, for a vet bill for the horse. The judgment has been fully satisfied.

$2,647

For Applicant

Judgment Against Applicant

Denied

—

1.b

SOR ¶ 1.b lists a debt of $1,108 to a bank. Applicant does not deny that she owed this debt, but stated it was discharged in bankruptcy under another name. The debt is listed on the credit reports with the last activity occurring in early 2003. The name in the allegation is a bank and the name of the debt included in the bankruptcy is a credit card. Applicant would have no reason to omit this debt from the bankruptcy. I find this debt was discharged in bankruptcy.

$1,108

For Applicant

Unspecified Financial

Admitted

—

1.c

Applicant admitted owing the debt of $907 to a collection company on behalf of a credit card company, as alleged in SOR ¶ 1.c. She has agreed to make payments of $100 per month. In her post-hearing submission, she submitted a statement from the creditor as proof of payment. While she did not submit a copy of a cancelled check or a receipt of payment, the statement indicated that the debt was down to $807.

$907

For Applicant

Credit Card Debt

Admitted

—

1.d

When Applicant separated from her ex-husband, she moved to a person’s home and paid rent. Applicant paid the rent for a period and then was unable to make the rent payments. She moved out owing rent. The landlord obtained a judgment against Applicant for $924, as alleged in SOR ¶ 1.d. Applicant did not believe she owed the entire amount as she gave the landlord a refrigerator, washer, and dryer. However, she did not fight the lawsuit and agrees that she is legally responsible for the entire judgment. Applicant and the landlord signed an agreement wherein Applicant promised to pay $100 per month until the judgment was paid.

$924

For Applicant

Judgment Against Applicant

Denied with Explanation

—

1.e

SOR ¶ 1.e lists a debt of $4,145 to a collection company for nine delinquent accounts. The credit report of February 6, 2007, lists the nine accounts to the collection company. The names of the original creditors are not listed. None of the debts are listed on the credit report of February 21, 2008. Applicant stated several of the original debts were discharged in her bankruptcy. She provided a statement from the collection company showing she still owed on four medical accounts. She made five payments of $100 each between January 2008 and May 29, 2008, with a remaining balance of $966.

$4,145

For Applicant

Unspecified Financial

Unknown

—

1.f

Applicant does not deny that she owed debt of $372 to a collection company, as alleged in SOR ¶ 1.f, but she stated it was discharged in bankruptcy under a different name. The debt is listed on the credit report of February 6, 2007. It is listed under two different names in the credit report of February 21, 2008. Applicant stated this debt was included in the Schedule of Post-Petition Debt for her bankruptcy. One of the names listed on the credit report of February 21, 2008, is listed to be served a copy of the Petition. The evidence supports Applicant’s assertion that this debt was discharged in bankruptcy.

$372

For Applicant

Unspecified Financial

Denied with Explanation

—

1.g–1.m

7 sub-charges — specific text not stated in this decision (for the applicant).

For Applicant

—

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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

PROCEDURAL RULINGS

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES