ISCR Case 08-08140.h1

Case Headnote

ISCR Case No. 08-08140.h1

deniedJun 19, 2009· Hon. David M. White· hearing

Summary

A 38-year-old defense contractor was denied a security clearance due to significant financial concerns under Guideline F, stemming from over $90,000 in delinquent debt. The Statement of Reasons detailed several outstanding obligations, including a credit card account charged off in April 2006 for $38,461, and another credit card debt of $16,946 that became delinquent in August 2005. Additionally, a consumer loan account, delinquent since September 2005, had a balance of $14,176, with no payments documented.

The applicant also had two delinquent student loans totaling $9,028 as of December 2008, which were incurred for a second bachelor's degree. While he made four payments totaling $1,650, bringing these loans into current status with a remaining balance of $7,608, other debts remained unresolved. These included a $16,390 charged-off credit card debt from August 2005, for which he retained an attorney in January 2009 but reported no progress. Finally, an educational loan of $7,948 from a bank was charged off in October 2006 after his last payment in March 2006.

Despite some repayment efforts, the applicant failed to demonstrate a consistent ability to manage his financial obligations. The denial was based on the substantial outstanding delinquent debt, insufficient evidence of his ability to repay or manage his finances, and the absence of proof that his financial issues arose from circumstances beyond his control.

Why the Applicant Was Denied

The applicant has over $90,000 in outstanding delinquent debt, indicating financial irresponsibility.
He did not provide sufficient evidence of his ability to repay his debts or manage his finances going forward.
The applicant's financial issues were not shown to arise from circumstances beyond his control.

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(a)rejectedBehavior Happened Long Ago or InfrequentlyThe applicant's financial irresponsibility is ongoing and substantial.
AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant did not demonstrate that his debts arose from circumstances beyond his control.
AG ¶ 20(c)rejectedReceived or Receiving CounselingThere is no evidence of financial counseling.
AG ¶ 20(d)appliedGood-faith Effort to Repay DebtsThe applicant made some repayments, but insufficient to mitigate concerns.

Key Rule Quoted

“Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information.”

Procedural Posture

SOR issuedFeb 4, 2009
Answer filedMar 18, 2009Applicant requested a decision on the written record.
Hearing held—No hearing was held; case decided on the written record.
Decision dateJun 19, 2009

Cite For

Financial Irresponsibility Under Guideline F
Inability to Demonstrate Financial Management
Impact of Ongoing Debt on Security Clearance Eligibility

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	SOR ¶ 1.a involves a credit card account that was charged off by the original creditor in April 2006, in the amount of $38,461, and transferred to another creditor. $38,461	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	The debts alleged in SOR ¶¶ 1.b and 1.f involve the same credit card debt as reported on two different credit bureau reports (CBRs). As of December 5, 2008, this debt was $16,946. It was charged off and placed for collection by the original creditor after it became delinquent in August 2005. $16,946	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	SOR ¶ 1.c describes a consumer loan account that was placed for collection after it became delinquent in September 2005. The balance due as of December 5, 2008, was $14,176. Applicant offered no evidence of any payments toward this debt. $14,176	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant had two delinquent student loans as alleged in SOR ¶¶ 1.d and e. These loans, incurred in connection with Applicant’s second bachelor’s degree, were combined for an original total loan amount of $12,597. On December 5, 2008, both loans were reported 150 days past due in the total amount of $9,028, as alleged and admitted. Since January 2009, Applicant has made four payments toward this debt, totaling $1,650. These payments have brought the loan into a current status, with $145 monthly payments due going forward toward the remaining $7,608 balance. $9,028	For Applicant	Student Loan Debt	Admitted	—	(c) received/receiving counseling; problem being resolved	Documented Debt Paid in Full
1.e	Applicant has made four payments toward this debt, totaling $1,650. These payments have brought the loan into a current status, with $145 monthly payments due going forward toward the remaining $7,608 balance. $7,608	For Applicant	Student Loan Debt	Admitted	—	(c) received/receiving counseling; problem being resolved	Documented Debt Paid in Full
1.f	Applicant documented no payments toward this debt, but in January 2009, he retained an attorney for $950 to negotiate a repayment agreement for him. He reported no progress toward resolution, however. $16,390	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant owed $16,390 on another charged-off credit card debt as alleged in SOR ¶ 1.g. This debt also became delinquent in August 2005, and was charged off in June 2006. Applicant documented no payments toward this debt, but in January 2009, he retained an attorney for $950 to negotiate a repayment agreement for him. He reported no progress toward resolution, however. $16,390	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Finally, Applicant defaulted on another educational loan from a bank in the amount of $7,948. His last payment toward this loan was in March 2006, and it was charged off by the creditor in October 2006. $7,948	Against 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

SOR ¶ 1.a involves a credit card account that was charged off by the original creditor in April 2006, in the amount of $38,461, and transferred to another creditor.

$38,461

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

The debts alleged in SOR ¶¶ 1.b and 1.f involve the same credit card debt as reported on two different credit bureau reports (CBRs). As of December 5, 2008, this debt was $16,946. It was charged off and placed for collection by the original creditor after it became delinquent in August 2005.

$16,946

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

SOR ¶ 1.c describes a consumer loan account that was placed for collection after it became delinquent in September 2005. The balance due as of December 5, 2008, was $14,176. Applicant offered no evidence of any payments toward this debt.

$14,176

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

Applicant had two delinquent student loans as alleged in SOR ¶¶ 1.d and e. These loans, incurred in connection with Applicant’s second bachelor’s degree, were combined for an original total loan amount of $12,597. On December 5, 2008, both loans were reported 150 days past due in the total amount of $9,028, as alleged and admitted. Since January 2009, Applicant has made four payments toward this debt, totaling $1,650. These payments have brought the loan into a current status, with $145 monthly payments due going forward toward the remaining $7,608 balance.

$9,028

For Applicant

Student Loan Debt

Admitted

—

(c) received/receiving counseling; problem being resolved

Documented

Debt Paid in Full

1.e

Applicant has made four payments toward this debt, totaling $1,650. These payments have brought the loan into a current status, with $145 monthly payments due going forward toward the remaining $7,608 balance.

$7,608

For Applicant

Student Loan Debt

Admitted

—

(c) received/receiving counseling; problem being resolved

Documented

Debt Paid in Full

1.f

Applicant documented no payments toward this debt, but in January 2009, he retained an attorney for $950 to negotiate a repayment agreement for him. He reported no progress toward resolution, however.

$16,390

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

Applicant owed $16,390 on another charged-off credit card debt as alleged in SOR ¶ 1.g. This debt also became delinquent in August 2005, and was charged off in June 2006. Applicant documented no payments toward this debt, but in January 2009, he retained an attorney for $950 to negotiate a repayment agreement for him. He reported no progress toward resolution, however.

$16,390

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

Finally, Applicant defaulted on another educational loan from a bank in the amount of $7,948. His last payment toward this loan was in March 2006, and it was charged off by the creditor in October 2006.

$7,948

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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Case Profile

Summary

Why the Applicant Was Denied

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

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES