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Summary

The applicant, a 55-year-old defense contractor, sought a security clearance under Guideline F due to significant financial issues, including multiple bankruptcies and outstanding debts exceeding $26,000. The judge found that the applicant's financial difficulties were longstanding and unresolved, leading to a denial of the security clearance.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: The Applicant admits that he filed for Chapter 13 Bankruptcy protection on January 8, 2007. This bankruptcy was dismissed on February 28, 2007 (1.a). The Applicant admits filing for Chapter 7 Bankruptcy protection in about July 1998. He was discharged of all dischargeable debts in November 1998 (1.b). The Applicant admits that he was indebted to an individual in the amount of $723. This was the result of a lawsuit. The Applicant submitted documentation showing that this debt was paid (1.c). The Applicant admits that he is indebted to a loan company in the amount of $2,582. This was the result of an automobile repossession and subsequent lawsuit. The Applicant has made no payments on this debt, and has no current plans to make payments on this debt (1.d). The Applicant admitted that he is indebted to a medical provider in the amount of $31. The Applicant alleged that he was making payments on this account through a hospital. The Applicant provided a credit report dated August 4, 2009. That credit report showed the debt to this creditor as still being due and owing (1.e). The Applicant admitted that he is indebted to a medical provider in the amount of $3,143. The Applicant alleged that he was making payments on this account through a hospital. The Government’s most recent credit report, dated July 28, 2009, showed the debt to this creditor as still being due and owing (1.f). The Applicant admitted that he is indebted to a medical provider in the amount of $155. The Applicant alleged that he was making payments on this account through a hospital. The ACR showed the debt to this creditor as still being due and owing (1.g). The Applicant denied owing a telephone company $160 for a past due account. He testified that he had no knowledge of this account and was disputing this debt with the credit reporting agencies (1.h). The Applicant denied owing a cable television company $147 for a past due account. He testified that he had no knowledge of this account and was disputing this debt with the credit reporting agencies (1.i). The Applicant denied owing a credit card company $413 for a past due account. He testified that he had no knowledge of this account and was disputing this debt with the credit reporting agencies (1.j). The Applicant denied owing a telephone company $418 for a past due account. He testified that he had no knowledge of this account and was disputing this debt with the credit reporting agencies (1.k). The Applicant admits that he owed a utility company $676 for a past due debt. He stated that he had made a payment arrangement with the utility and was fulfilling his responsibility. The credit reports supplied by the Government and the Applicant show this as a paid, or paying, charge off (1.l). The Applicant denies that he owes a loan company $12,605 for a delinquent real estate loan. He states both of his houses have been foreclosed on and sold. Indeed, he alleges that this creditor sold the house for more than the deficiency and the Applicant is owed money (1.m). The Applicant denies that he owes the Internal Revenue Service $678 for back taxes. The available evidence shows that the Applicant had an earlier Federal tax lien released in the amount of $5,163. However, none of the available evidence shows that the most current Federal tax lien has been paid or released (1.n). The Applicant admits that he owed a collection agency the amount of $4,941. He states that the company sued him, obtained a judgment, and that the judgment was satisfied (1.o). The Applicant admits that he owes $1,535 for a past due credit card account. The Applicant states that he is disputing the amount he owes. This account has not been paid, and the Applicant has no current plans to pay this debt (1.p).

The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(a), AG ¶ 20(c), AG ¶ 20(d). The decision turned on the following: The applicant has over $26,000 in past due debts, which have been due for several years; The applicant failed to demonstrate a good-faith effort to pay off his creditors; The applicant's financial situation is not under control, raising concerns about potential pressure or coercion.

Why the Applicant Was Denied

• The applicant has over $26,000 in past due debts, which have been due for several years.
• The applicant failed to demonstrate a good-faith effort to pay off his creditors.
• The applicant's financial situation is not under control, raising concerns about potential pressure or coercion.

Conditions Referenced

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 12, 2009
• Answer filedMar 19, 2009
• Hearing heldJul 28, 2009
• Decision dateOct 27, 2009

Cite For

• Financial Overextension as a Disqualifying Condition Under Guideline F
• Lack of Good-faith Effort to Resolve Financial Issues
• Longstanding Financial Difficulties Impacting Security Clearance Eligibility