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Case Headnote

ISCR Case No. 08-02110.h1

grantedJun 23, 2009· Hon. Charles D. Ablard· hearing

Summary

A 33-year-old defense contractor employee was granted a security clearance despite concerns under Guideline F (Financial Considerations) stemming from a history of delinquent debts. The Statement of Reasons detailed eight specific financial allegations. These included a $608 debt, which the applicant settled for $250 and paid on May 19, 2009, and a $4,100 credit card debt that became delinquent during unemployment.

Other debts included a $4,926 department store account assigned for collection, a $16,053 debt owed to a collection company for which the applicant attempted to establish a payment plan, and a $3,987 automobile financing debt where the vehicle was repossessed after a former fiancé stopped making payments. The applicant also faced a disputed $896 debt, a $293 medical bill that was subsequently resolved, and a $3,776 department store debt deemed a duplication of the $4,926 account.

The decision to grant clearance was based on several mitigating factors. The applicant demonstrated a meaningful track record of debt repayment, received financial counseling, and established a spending plan. Furthermore, the applicant's financial problems were largely attributed to circumstances beyond his control.

Why the Applicant Prevailed

The applicant showed a meaningful track record of debt repayment.
The applicant received financial counseling and established a spending plan.
The applicant's financial problems were largely due to circumstances beyond his control.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling and Indications of Resolution
AG ¶ 20(d)appliedGood-faith Effort to Repay Debts

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the Applicant meeting the criteria contained in the revised adjudicative guidelines (AG).”

Procedural Posture

SOR issuedDec 16, 2008
Answer filedJan 12, 2009
Hearing heldApr 20, 2009
Decision dateJun 23, 2009

Cite For

Mitigation of Financial Considerations Under Guideline F
Impact of Financial Counseling on Security Clearance Decisions
Consideration of Circumstances Beyond Control in Financial Issues

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	Debt for $608 (SOR ¶ 1.a). He admitted he had an account; however, he did not believe he owed the creditor because the telephones he received were turned off and then turned on again. He disputed the applicability of the original two-year contract with the creditor because he used the telephone services for five years. He telephoned the creditor about the dispute; however, he did not provide documentation disputing the debt. On May 18, 2009, he received a settlement offer for $250. On May 19, 2009, he paid this debt. $608	For Applicant	Unspecified Financial	Denied	(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	Documented Debt Paid in Full
1.b	Credit card debt for $4,100 (SOR ¶ 1.b) became delinquent when Applicant was unemployed. He used this credit card for living expenses when he was unemployed. He thought this debt was a duplication of his debt in SOR ¶ 1.d. When he contacted the bank, he learned the debt was transferred from the bank to a collection company. $4,100	For Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Department store credit account for $4,926 (SOR ¶ 1.c). Applicant said this debt involved repossession of one of Applicant’s vehicles. However, his credit report showed it was a department store account and indicated it was assigned to an attorney for collection. He had not contacted the creditor at the time of his hearing about resolving this debt. $4,926	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Debt for $16,053 is owed to a collection company (SOR ¶ 1.d). His September 9, 2008, credit report shows a high credit of $8,433 and a balance of $16,053. He made contact with the creditor in the fall of 2008. He attempted to establish a payment plan, but the bank wanted monthly $1,000 payments. $16,053	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Automobile financing installment account debt for $3,987 (SOR ¶ 1.e). The creditor orally advised Applicant that this debt duplicates the debt in SOR ¶ 1.c. However, there was no documentation corroborating the assertion that the two debts were duplications, and I find that this debt is not duplicated in the SOR. Applicant’s former fiancé was using the vehicle and she was supposed to make the payments. She stopped making the payments, and Applicant called the creditor and asked them to pick-up the vehicle. The creditor sold the vehicle at auction. Applicant has not made arrangements to pay this debt, but plans to work on setting up a payment plan. $3,987	For Applicant	Auto Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Debt for $896 (SOR ¶ 1.f) is listed. Applicant denied the debt because he did not recognize it. At the time of his hearing, he had not contacted the creditor. This debt became delinquent in June 2003. $896	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Collection account for $293 related to a delinquent medical bill for care Applicant’s son received (SOR ¶ 1.g). On May 4, 2009, Applicant received an account statement showing the balance due was zero. Applicant said his most recent credit report, dated May 15, 2009, did not show this account. $293	For Applicant	Medical Debt	Denied	(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	Documented Debt Paid in Full
1.h	Department store debt for $3,776 (SOR ¶ 1.h). This is the same department store as listed in SOR ¶ 1.c above. Applicant admitted this debt. Applicant’s 2006 credit report indicates the account was transferred or sold. Applicant had not contacted this creditor by the time of his hearing. Applicant said his most recent credit report, dated May 15, 2009, did not show this account. I conclude that this debt is a duplication of the debt in SOR ¶ 1.c. $3,776	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Debt for $608 (SOR ¶ 1.a). He admitted he had an account; however, he did not believe he owed the creditor because the telephones he received were turned off and then turned on again. He disputed the applicability of the original two-year contract with the creditor because he used the telephone services for five years. He telephoned the creditor about the dispute; however, he did not provide documentation disputing the debt. On May 18, 2009, he received a settlement offer for $250. On May 19, 2009, he paid this debt.

$608

For Applicant

Unspecified Financial

Denied

(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

Documented

Debt Paid in Full

1.b

Credit card debt for $4,100 (SOR ¶ 1.b) became delinquent when Applicant was unemployed. He used this credit card for living expenses when he was unemployed. He thought this debt was a duplication of his debt in SOR ¶ 1.d. When he contacted the bank, he learned the debt was transferred from the bank to a collection company.

$4,100

For Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Department store credit account for $4,926 (SOR ¶ 1.c). Applicant said this debt involved repossession of one of Applicant’s vehicles. However, his credit report showed it was a department store account and indicated it was assigned to an attorney for collection. He had not contacted the creditor at the time of his hearing about resolving this debt.

$4,926

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

Debt for $16,053 is owed to a collection company (SOR ¶ 1.d). His September 9, 2008, credit report shows a high credit of $8,433 and a balance of $16,053. He made contact with the creditor in the fall of 2008. He attempted to establish a payment plan, but the bank wanted monthly $1,000 payments.

$16,053

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

Automobile financing installment account debt for $3,987 (SOR ¶ 1.e). The creditor orally advised Applicant that this debt duplicates the debt in SOR ¶ 1.c. However, there was no documentation corroborating the assertion that the two debts were duplications, and I find that this debt is not duplicated in the SOR. Applicant’s former fiancé was using the vehicle and she was supposed to make the payments. She stopped making the payments, and Applicant called the creditor and asked them to pick-up the vehicle. The creditor sold the vehicle at auction. Applicant has not made arrangements to pay this debt, but plans to work on setting up a payment plan.

$3,987

For Applicant

Auto Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

Debt for $896 (SOR ¶ 1.f) is listed. Applicant denied the debt because he did not recognize it. At the time of his hearing, he had not contacted the creditor. This debt became delinquent in June 2003.

$896

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

Collection account for $293 related to a delinquent medical bill for care Applicant’s son received (SOR ¶ 1.g). On May 4, 2009, Applicant received an account statement showing the balance due was zero. Applicant said his most recent credit report, dated May 15, 2009, did not show this account.

$293

For Applicant

Medical Debt

Denied

(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

Documented

Debt Paid in Full

1.h

Department store debt for $3,776 (SOR ¶ 1.h). This is the same department store as listed in SOR ¶ 1.c above. Applicant admitted this debt. Applicant’s 2006 credit report indicates the account was transferred or sold. Applicant had not contacted this creditor by the time of his hearing. Applicant said his most recent credit report, dated May 15, 2009, did not show this account. I conclude that this debt is a duplication of the debt in SOR ¶ 1.c.

$3,776

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision