ISCR Case 08-08901.h1

Case Headnote

ISCR Case No. 08-08901.h1

deniedOct 9, 2009· Hon. Wilford H. Ross· hearing

Summary

A 55-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved debts. The applicant's financial issues were attributed to his wife's medical problems.

The applicant had a Chapter 7 bankruptcy discharge in 1997, stemming from a conflict with an automobile company. More recently, a 2006 judgment for $2,323.24 related to an apartment debt remains largely unpaid, with $1,595.03 still owed after a security deposit was applied. He also admitted to a $60 medical debt with a collection agency, and acknowledged owing $929, $65, and $338 for various hospital bills to different collection agencies, though he was unsure of their current status. While he denied several other debts, including those to banks, collection agencies for medical and towing services, and mobile phone companies, he had not disputed many of these on his credit reports or investigated their status. Two allegations, concerning an automobile credit company debt and a utility bill, were found in his favor as those debts were resolved or being paid.

Ultimately, the denial was based on over $9,900 in unresolved past-due debts, with most payments ceasing in mid-2008. The applicant failed to present a reasonable plan to address his financial situation, leading to concerns about his reliability and trustworthiness.

Why the Applicant Was Denied

The applicant has over $9,900 in past due debts, which he has not resolved.
He has not made payments on most debts since mid-2008 and lacks a reasonable plan to address his financial situation.
The applicant's financial difficulties raise concerns about his reliability and trustworthiness.

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)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlWhile the applicant's wife's illness contributed to his financial issues, he has not acted responsibly to resolve his debts.
AG ¶ 20(c)rejectedThere Are Clear Indications That the Problem Is Being Resolved or Is Under ControlThe applicant has not demonstrated any significant progress in managing his debts.
AG ¶ 20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue CreditorsThe applicant has not made consistent payments or shown a commitment to resolving his debts.

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 3, 2009
Answer filedMar 18, 2009
Hearing heldJun 15, 2009
Decision dateOct 9, 2009

Cite For

Financial Overextension as a Disqualifying Condition Under Guideline F
Lack of a Reasonable Plan to Address Significant Debts
Impact of Personal 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 Applicant admits that he filed a petition under Chapter 7 of the Bankruptcy Code in 1997. He received a discharge of all of his dischargeable debts in September 1997. He testified that this bankruptcy was the result of an ongoing conflict with an automobile company.	Against Applicant	Bankruptcy Filing	Admitted	—	—	—
1.b	The Applicant admits that a judgment was entered against him in 2006 for the amount of $2,323.24 plus fees. This was in relation to an apartment the Applicant rented at that time. The Applicant alleges that the plaintiff’s lawyer said that the judgment would be resolved using the Applicant’s security deposit. The Applicant and the law firm have been in written communication. The law firm states that, after applying the Applicant’s security deposit, he still owes $1,595.03. The Applicant has made no payments on this debt, and has no current plans to make payments on this debt. $2,323	Against Applicant	Judgment Against Applicant	Admitted	—	—	—
1.c	The Applicant admits that he is indebted to a collection agency for a medical debt in the amount of $60. He testified that he was uncertain as to the nature of this debt and whether it has been paid. The Applicant has made no payments on this debt, and has no current plans to make payments on this debt. $60	Against Applicant	Medical Debt	Admitted	—	—	—
1.d	The Applicant denied that he owes a bank $972. He states that he does not know whether the account is his or not. A credit bureau report submitted by the Applicant shows that he has disputed this account information. $972	For Applicant	Unspecified Financial	Denied	—	—	—
1.e	The Applicant denies that he owes a second bank $2,154. He testified that his understanding was that he had paid that debt off. However, he also stated he did not understand the nature of the debt. The Applicant’s credit bureau report does not show that he has disputed this debt. $2,154	Against Applicant	Unspecified Financial	Denied	—	—	—
1.f	The Applicant denies that he owes a third bank $1,520. He testified that he never had an account with that bank. The Applicant’s credit bureau report does not show that he has disputed this debt. $1,520	Against Applicant	Unspecified Financial	Denied	—	—	—
1.g	The Applicant denies that he owes a collection agency $195 for a medical bill. The Applicant testified about this debt, “I need to pursue that and see what that is.” The Applicant’s credit bureau report does not show that he has disputed this debt. $195	Against Applicant	Unspecified Financial	Denied	—	—	—
1.h	The Applicant denies that he owes a second collection agency $1,329 for a towing service. He testified, “I don’t know what it is or where it came from.” The Applicant’s credit bureau report does not show that he has disputed this debt. $1,329	Against Applicant	Unspecified Financial	Denied	—	—	—
1.i	The Applicant admitted that he owed an automobile credit company $6,998 for a past due debt. He testified that the vehicle had been repossessed by the dealer. The most recent credit bureau report show that there is currently no deficiency on this debt. Based on the available record, this allegation is found for the Applicant. $6,998	For Applicant	Auto Loan Debt	Admitted	—	—	—
1.j	The Applicant denies that he owes a third collection agency $106 for a mobile telephone bill. He testified that he never had a phone from this company. The Applicant’s credit bureau report does not show that he has disputed this debt. $106	Against Applicant	Unspecified Financial	Denied	—	—	—
1.k	The Applicant denied that he owed a utility $1,030 for a past due account. However, he testified that he is currently making payments on the arrearage. The Government’s most recent credit bureau report confirms that he is making payments on this debt. This allegation is found for the Applicant. $1,030	For Applicant	Utility or Phone Debt	Denied	—	—	—
1.l	The Applicant denies that he owes a fourth collection agency $134 for a second utility bill. He testified, “I paid that off I thought.” He has done nothing to investigate the status of this debt. The Applicant’s credit bureau report does not show that he has disputed this debt. $134	Against Applicant	Unspecified Financial	Denied	—	—	—
1.m	The Applicant denies that he owes a second mobile telephone company $264 for a past due bill. He testified that he had paid off this creditor. He has done nothing to investigate the status of this debt. The Applicant’s credit bureau report does not show that he has disputed this debt. $264	Against Applicant	Unspecified Financial	Denied	—	—	—
1.n	The Applicant denies that he owes a third mobile telephone company $149 for a past due bill. He testified that he had paid off this creditor. He has done nothing to investigate the status of this debt. The Applicant’s credit bureau report does not show that he has disputed this debt. $149	Against Applicant	Unspecified Financial	Denied	—	—	—
1.o	The Applicant admitted that he owed a fifth collection agency $929 in total for nine hospital bills. The Applicant testified that he was not sure which of these bills were still owing and which had been paid off. The available credit reports do not show that he has disputed any of these debts. $929	Against Applicant	Medical Debt	Admitted	—	—	—
1.p	The Applicant admitted that he owed a sixth collection agency $65 for a hospital bill. The Applicant testified that he was not sure which of his medical bills were still owing and which had been paid off, including this one. The available credit reports do not show that he has disputed this debt. $65	Against Applicant	Medical Debt	Admitted	—	—	—
1.q	The Applicant admitted that he owed a seventh collection agency $338 in total for two hospital bills. The Applicant testified that he was not sure which of these bills were still owing and which had been paid off. The available credit reports do not show that he has disputed either of these debts. $338	Against Applicant	Medical Debt	Admitted	—	—	—
1.r	The Applicant denies that he owes a store $344 for a credit card bill. Concerning this debt he testified that he did not know what the debt was for and would have to look into it. He has done nothing to investigate the status of this debt. The Government’s most recent credit bureau report does not show that he has disputed this debt. $344	Against Applicant	Unspecified Financial	Denied	—	—	—
1.s	The monetary total in SOR allegation 1.s. is made up of five separate bills.	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.t	The Applicant denies that he owes a store $344 for a credit card bill. Concerning this debt he testified that he did not know what the debt was for and would have to look into it. He has done nothing to investigate the status of this debt. The Government’s most recent credit bureau report does not show that he has disputed this debt. $344	Against Applicant	Unspecified Financial	Denied	—	—	—
1.u	The Applicant denies that he owes a store $344 for a credit card bill. Concerning this debt he testified that he did not know what the debt was for and would have to look into it. He has done nothing to investigate the status of this debt. The Government’s most recent credit bureau report does not show that he has disputed this debt. $344	Against Applicant	Unspecified Financial	Denied	—	—	—
1.v	The Applicant denies that he owes a store $344 for a credit card bill. Concerning this debt he testified that he did not know what the debt was for and would have to look into it. He has done nothing to investigate the status of this debt. The Government’s most recent credit bureau report does not show that he has disputed this debt. $344	Against Applicant	Unspecified Financial	Denied	—	—	—
1.w	The Applicant denies that he owes a store $344 for a credit card bill. Concerning this debt he testified that he did not know what the debt was for and would have to look into it. He has done nothing to investigate the status of this debt. The Government’s most recent credit bureau report does not show that he has disputed this debt. $344	Against Applicant	Unspecified Financial	Denied	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The Applicant admits that he filed a petition under Chapter 7 of the Bankruptcy Code in 1997. He received a discharge of all of his dischargeable debts in September 1997. He testified that this bankruptcy was the result of an ongoing conflict with an automobile company.

Against Applicant

Bankruptcy Filing

Admitted

—

1.b

The Applicant admits that a judgment was entered against him in 2006 for the amount of $2,323.24 plus fees. This was in relation to an apartment the Applicant rented at that time. The Applicant alleges that the plaintiff’s lawyer said that the judgment would be resolved using the Applicant’s security deposit. The Applicant and the law firm have been in written communication. The law firm states that, after applying the Applicant’s security deposit, he still owes $1,595.03. The Applicant has made no payments on this debt, and has no current plans to make payments on this debt.

$2,323

Against Applicant

Judgment Against Applicant

Admitted

—

1.c

The Applicant admits that he is indebted to a collection agency for a medical debt in the amount of $60. He testified that he was uncertain as to the nature of this debt and whether it has been paid. The Applicant has made no payments on this debt, and has no current plans to make payments on this debt.

$60

Against Applicant

Medical Debt

Admitted

—

1.d

The Applicant denied that he owes a bank $972. He states that he does not know whether the account is his or not. A credit bureau report submitted by the Applicant shows that he has disputed this account information.

$972

For Applicant

Unspecified Financial

Denied

—

1.e

The Applicant denies that he owes a second bank $2,154. He testified that his understanding was that he had paid that debt off. However, he also stated he did not understand the nature of the debt. The Applicant’s credit bureau report does not show that he has disputed this debt.

$2,154

Against Applicant

Unspecified Financial

Denied

—

1.f

The Applicant denies that he owes a third bank $1,520. He testified that he never had an account with that bank. The Applicant’s credit bureau report does not show that he has disputed this debt.

$1,520

Against Applicant

Unspecified Financial

Denied

—

1.g

The Applicant denies that he owes a collection agency $195 for a medical bill. The Applicant testified about this debt, “I need to pursue that and see what that is.” The Applicant’s credit bureau report does not show that he has disputed this debt.

$195

Against Applicant

Unspecified Financial

Denied

—

1.h

The Applicant denies that he owes a second collection agency $1,329 for a towing service. He testified, “I don’t know what it is or where it came from.” The Applicant’s credit bureau report does not show that he has disputed this debt.

$1,329

Against Applicant

Unspecified Financial

Denied

—

1.i

The Applicant admitted that he owed an automobile credit company $6,998 for a past due debt. He testified that the vehicle had been repossessed by the dealer. The most recent credit bureau report show that there is currently no deficiency on this debt. Based on the available record, this allegation is found for the Applicant.

$6,998

For Applicant

Auto Loan Debt

Admitted

—

1.j

The Applicant denies that he owes a third collection agency $106 for a mobile telephone bill. He testified that he never had a phone from this company. The Applicant’s credit bureau report does not show that he has disputed this debt.

$106

Against Applicant

Unspecified Financial

Denied

—

1.k

The Applicant denied that he owed a utility $1,030 for a past due account. However, he testified that he is currently making payments on the arrearage. The Government’s most recent credit bureau report confirms that he is making payments on this debt. This allegation is found for the Applicant.

$1,030

For Applicant

Utility or Phone Debt

Denied

—

1.l

The Applicant denies that he owes a fourth collection agency $134 for a second utility bill. He testified, “I paid that off I thought.” He has done nothing to investigate the status of this debt. The Applicant’s credit bureau report does not show that he has disputed this debt.

$134

Against Applicant

Unspecified Financial

Denied

—

1.m

The Applicant denies that he owes a second mobile telephone company $264 for a past due bill. He testified that he had paid off this creditor. He has done nothing to investigate the status of this debt. The Applicant’s credit bureau report does not show that he has disputed this debt.

$264

Against Applicant

Unspecified Financial

Denied

—

1.n

The Applicant denies that he owes a third mobile telephone company $149 for a past due bill. He testified that he had paid off this creditor. He has done nothing to investigate the status of this debt. The Applicant’s credit bureau report does not show that he has disputed this debt.

$149

Against Applicant

Unspecified Financial

Denied

—

1.o

The Applicant admitted that he owed a fifth collection agency $929 in total for nine hospital bills. The Applicant testified that he was not sure which of these bills were still owing and which had been paid off. The available credit reports do not show that he has disputed any of these debts.

$929

Against Applicant

Medical Debt

Admitted

—

1.p

The Applicant admitted that he owed a sixth collection agency $65 for a hospital bill. The Applicant testified that he was not sure which of his medical bills were still owing and which had been paid off, including this one. The available credit reports do not show that he has disputed this debt.

$65

Against Applicant

Medical Debt

Admitted

—

1.q

The Applicant admitted that he owed a seventh collection agency $338 in total for two hospital bills. The Applicant testified that he was not sure which of these bills were still owing and which had been paid off. The available credit reports do not show that he has disputed either of these debts.

$338

Against Applicant

Medical Debt

Admitted

—

1.r

The Applicant denies that he owes a store $344 for a credit card bill. Concerning this debt he testified that he did not know what the debt was for and would have to look into it. He has done nothing to investigate the status of this debt. The Government’s most recent credit bureau report does not show that he has disputed this debt.

$344

Against Applicant

Unspecified Financial

Denied

—

1.s

The monetary total in SOR allegation 1.s. is made up of five separate bills.

Against Applicant

Unspecified Financial

Unknown

—

1.t

$344

Against Applicant

Unspecified Financial

Denied

—

1.u

$344

Against Applicant

Unspecified Financial

Denied

—

1.v

$344

Against Applicant

Unspecified Financial

Denied

—

1.w

$344

Against Applicant

Unspecified Financial

Denied

—

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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