ISCR Case 07-15697.h1

Case Headnote

ISCR Case No. 07-15697.h1

grantedNov 26, 2008· Hon. Paul J. Mason· hearing

Summary

A 51-year-old test engineer with a long history of security clearance was granted a security clearance despite concerns under Guideline F (Financial Considerations). The applicant faced approximately $31,000 in debts, primarily stemming from a failed business venture.

The Statement of Reasons detailed eight specific financial allegations. These included a $544 account from 2007, a $49 cable television account from 2005 that was paid, and a charged-off account that grew from $9,179 to $18,586 due to interest and penalties, for which the applicant had begun making $250 monthly payments under a July 2008 Consent Order. Other debts included accounts of $4,356, $745, and $11,023, all with last activity between 2003 and 2004, which were part of a debt consolidation plan. A $463 account was subject to a collection cessation in 2005, and a fifth delinquent account of $5,255 was also included in the debt plan.

The judge found that the applicant's mitigating evidence outweighed the disqualifying factors. This included a demonstrated good-faith effort to repay creditors through a debt consolidation plan, the fact that financial difficulties arose from circumstances beyond his control, and his long history of holding a security clearance. The security clearance was ultimately granted.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to repay overdue creditors through a debt consolidation plan.
The applicant's financial difficulties were largely due to circumstances beyond his control, specifically a failed business venture.
The applicant's long history of holding a security clearance and positive character references supported his credibility.

Conditions Referenced

Disqualifying

FC DC 19.araisedInability or Unwillingness to Satisfy Debts
FC DC 19.craisedA History of Not Meeting Financial Obligations

Mitigating

FC MC 20.aappliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
FC MC 20.bappliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
FC MC 20.cappliedThe 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 Control
FC MC 20.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedMar 21, 2008
Answer filedApr 24, 2008
Hearing heldAug 13, 2008
Decision dateNov 26, 2008

Cite For

Mitigating Factors Under Guideline F for Financial Considerations
Good-faith Efforts to Resolve Debts
Impact of Unforeseen Circumstances on Financial Obligations

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	The $544.00 account was placed for collection in April 2007; the last activity on the account was August 2005. The account is included in the payment plan. $544	For Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.b	The last activity on this cable television account ($49.00) was in December 2005. GE 5 confirms that the debt is paid. $49	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	The charged off account posted at $9,179.00 in the SOR is now $18,586.00 due to interest and penalties (GE 4). In July 2008, Applicant signed a Consent Order which requires him to pay $250.00 a month until the balance is paid; his checking account reflects he has made two payments under the order (AE G). $18,586	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.d	The last activity on this account ($4,356) was in August 2003. This account is also included in Applicant’s debt plan (GE 4). $4,356	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.e	The last activity on this account ($745.00) was in November 2004 (Tr. 51-54; GE 4). The past due account is also a part of Applicant’s debt plan (GE 2). $745	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.f	Applicant was informed by the collection company on August 26, 2005 that they would stop all efforts to collect this account ($463.00), and they would notify the credit bureau of their decision (AE F). Applicant indicated he paid this account, and was awaiting a proof of a payment letter from the creditor (Tr. 55; AE E). $463	For Applicant	Unspecified Financial	Unknown	—	—	—
1.g	The last activity on this collection account ($11,023.00) was August 2003. The account is a part of Applicant’s debt consolidation plan (Tr. 46; GE 4). $11,023	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.h	The account ($5,255.00) is the fifth delinquent account in Applicant’s debt plan. $5,255	For Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The $544.00 account was placed for collection in April 2007; the last activity on the account was August 2005. The account is included in the payment plan.

$544

For Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

—

1.b

The last activity on this cable television account ($49.00) was in December 2005. GE 5 confirms that the debt is paid.

$49

For Applicant

Unspecified Financial

Admitted

—

1.c

The charged off account posted at $9,179.00 in the SOR is now $18,586.00 due to interest and penalties (GE 4). In July 2008, Applicant signed a Consent Order which requires him to pay $250.00 a month until the balance is paid; his checking account reflects he has made two payments under the order (AE G).

$18,586

For Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

—

1.d

The last activity on this account ($4,356) was in August 2003. This account is also included in Applicant’s debt plan (GE 4).

$4,356

For Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

—

1.e

The last activity on this account ($745.00) was in November 2004 (Tr. 51-54; GE 4). The past due account is also a part of Applicant’s debt plan (GE 2).

$745

For Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

—

1.f

Applicant was informed by the collection company on August 26, 2005 that they would stop all efforts to collect this account ($463.00), and they would notify the credit bureau of their decision (AE F). Applicant indicated he paid this account, and was awaiting a proof of a payment letter from the creditor (Tr. 55; AE E).

$463

For Applicant

Unspecified Financial

Unknown

—

1.g

The last activity on this collection account ($11,023.00) was August 2003. The account is a part of Applicant’s debt consolidation plan (Tr. 46; GE 4).

$11,023

For Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

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

—

1.h

The account ($5,255.00) is the fifth delinquent account in Applicant’s debt plan.

$5,255

For Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(c) received/receiving counseling; problem being resolved

(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

FINDINGS OF FACT

POLICIES

ANALYSIS

FORMAL FINDINGS

CONCLUSION

FOOTNOTES