ISCR Case 08-09918.h1

Case Headnote

ISCR Case No. 08-09918.h1

deniedJul 1, 2008· Hon. Erin C. Hogan· hearing

Summary

A 53-year-old vice president of operations for a Department of Defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to significant and ongoing financial issues. The applicant faced 12 delinquent accounts totaling approximately $59,078.

Specific allegations included an $118 medical account and a $260 medical account, both placed for collection and subsequently paid in 2009. A $336 medical account was claimed paid, but no proof was submitted. A $1,195 credit card account, charged off in 2003, remained unresolved, with no contact from the applicant for several years. A $1,561 department store credit card, charged off in 2004, was disputed with credit reporting agencies after the hearing. A $2,611 credit card, charged off in 2003, also remained unresolved, with no payment efforts or contact from the applicant.

Other debts included a $15,038 amount from an ex-wife's repossessed automobile, settled for $4,537 and paid. A $1,952 account, charged off in 2003, was claimed disputed, but no proof was provided. A $34,054 second mortgage from a 2005 home foreclosure was unresolved, with the applicant unaware if money was still owed. A $368 cable bill was resolved. A $348 account, claimed paid, lacked a receipt, with post-hearing efforts to remove it from his credit report. Finally, a $1,237 account, placed for collection in 2005, was formally disputed with credit reporting agencies in 2009. The denial was based on the applicant's admission to the allegations, the ongoing nature of the problems, and a failure to demonstrate good-faith efforts to resolve most delinquent accounts.

Why the Applicant Was Denied

The applicant admitted to all allegations in the SOR, including significant financial issues.
The applicant's financial problems were ongoing and unresolved, raising questions about his reliability and judgment.
The applicant failed to demonstrate a good-faith effort to resolve most of his delinquent accounts.

Conditions Referenced

Disqualifying

FC DC 19(a)appliedInability or Unwillingness to Satisfy Debts
FC DC 19(c)appliedHistory of Not Meeting Financial Obligations
FC DC 19(e)appliedConsistent Spending Beyond One’s Means

Mitigating

FC MC 20(b)appliedConditions Largely Beyond ControlThe applicant's divorce contributed to financial problems, but he did not act responsibly under the circumstances.
FC MC 20(d)appliedGood-faith Effort to Repay CreditorsSome debts were resolved, but many remained unresolved.
FC MC 20(c)rejectedCounseling Received or Problem Under ControlThe applicant did not attend financial counseling and most debts remained unresolved.

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 issuedApr 10, 2009
Answer filedMay 18, 2009
Hearing heldJul 14, 2009
Decision date—

Cite For

Financial Management Issues Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Consideration of Personal Circumstances in Financial Evaluations

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	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.b	$118 medical account placed for collection in July 2007. Paid as of April 2009. $118	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	—
1.c	$260 medical account placed for collection in January 2008. Paid as of July 22, 2009. $260	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	—
1.d	$336 medical account placed for collection in November 2006. Applicant claims paid. No proof submitted at the close of the record. $336	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts	—	—
1.e	$1,195 credit card account that was charged off in December 2003. The account has not been resolved. Applicant has not contacted the company for several years. $1,195	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	$1,561 department store credit card account that was charged off in August 2004. Applicant claims the account was paid. After the hearing, he provided a letter, dated July 27, 2009, indicating he formally disputed the account with the credit reporting agencies. $1,561	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$2,611 credit card account that was charged off in November 2003. Applicant has made no efforts to pay this account because it is charged off. He has not contacted the company in years. Debt unresolved. $2,611	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	$15,038 amount owed after ex-wife’s automobile repossessed during the divorce. Date of last action on the account was November 2002. Applicant settled for $4,537. Debt paid with a credit card. $15,038	For Applicant	Auto Loan Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	—
1.i	$1,952 account that was charged off in March 2003. Applicant claims this account successfully disputed with credit reporting agencies. No proof submitted at the close of the record. $1,952	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts	—	—
1.j	$34,054 second mortgage, home foreclosure that was charged off in April 2005. Applicant claims the home was foreclosed and resold. At the hearing, he was not aware if he owed any money on the second mortgage as a result of the sale. $34,054	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.k	$368 cable bill placed for collection in April 2005. Debt was resolved. $368	For Applicant	Utility or Phone Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	—
1.l	$348 account placed for collection in June 2007. Applicant claims the debt was paid. No receipt was provided. Post hearing submission indicates he is in the process of removing the entry from his credit report. $348	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.m	$1,237 account placed for collection in May 2005. Applicant intends to dispute this account. On July 27, 2009, he formally disputed the account with the credit reporting agencies. $1,237	Against Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

specific text not stated in this decision

For Applicant

Unspecified Financial

Unknown

—

1.b

$118 medical account placed for collection in July 2007. Paid as of April 2009.

$118

For Applicant

Medical Debt

Admitted

—

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

—

1.c

$260 medical account placed for collection in January 2008. Paid as of July 22, 2009.

$260

For Applicant

Medical Debt

Admitted

—

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

—

1.d

$336 medical account placed for collection in November 2006. Applicant claims paid. No proof submitted at the close of the record.

$336

Against Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

—

1.e

$1,195 credit card account that was charged off in December 2003. The account has not been resolved. Applicant has not contacted the company for several years.

$1,195

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

$1,561 department store credit card account that was charged off in August 2004. Applicant claims the account was paid. After the hearing, he provided a letter, dated July 27, 2009, indicating he formally disputed the account with the credit reporting agencies.

$1,561

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

$2,611 credit card account that was charged off in November 2003. Applicant has made no efforts to pay this account because it is charged off. He has not contacted the company in years. Debt unresolved.

$2,611

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

$15,038 amount owed after ex-wife’s automobile repossessed during the divorce. Date of last action on the account was November 2002. Applicant settled for $4,537. Debt paid with a credit card.

$15,038

For Applicant

Auto Loan Debt

Admitted

—

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

—

1.i

$1,952 account that was charged off in March 2003. Applicant claims this account successfully disputed with credit reporting agencies. No proof submitted at the close of the record.

$1,952

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

—

1.j

$34,054 second mortgage, home foreclosure that was charged off in April 2005. Applicant claims the home was foreclosed and resold. At the hearing, he was not aware if he owed any money on the second mortgage as a result of the sale.

$34,054

Against Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.k

$368 cable bill placed for collection in April 2005. Debt was resolved.

$368

For Applicant

Utility or Phone Debt

Admitted

—

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

—

1.l

$348 account placed for collection in June 2007. Applicant claims the debt was paid. No receipt was provided. Post hearing submission indicates he is in the process of removing the entry from his credit report.

$348

Against Applicant

Unspecified Financial

Admitted

—

1.m

$1,237 account placed for collection in May 2005. Applicant intends to dispute this account. On July 27, 2009, he formally disputed the account with the credit reporting agencies.

$1,237

Against Applicant

Unspecified Financial

Admitted

—

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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