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Summary

The applicant, a 56-year-old defense contractor, sought a security clearance under Guideline F due to financial considerations. He admitted to past financial difficulties, including bankruptcy and foreclosure, but demonstrated responsible behavior in addressing his debts and mitigating the concerns. The judge granted the security clearance, finding that the applicant's current financial situation was stable and that he had acted responsibly under challenging circumstances.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant admits that he filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code in March 2001. He received a discharge in July 2001. According to the Applicant, the family debt situation occurred because of a period of underemployment, exacerbated by a series of family related financial emergencies. Eventually, a bankruptcy was the only way he saw to resolve the situation (1.a). This August 2001 county luxury tax lien in the amount of $83 was removed in June 2004, as shown by the applicable release of lien (1.b). This August 2001 county luxury tax lien in the amount of $97 was removed in June 2004, as shown by the applicable release of lien (1.c). Applicant admitted that he owed $40,000 on a past-due mortgage when the SOR was issued. This occurred because of the Applicant’s unemployment between 2005 and 2008, as well as a personal situation regarding the Applicant’s wife, which resulted in her losing her job as well. The Applicant attempted, over a period of several months, to work out a payment arrangement with his mortgage company. This was unsuccessful, primarily because the Applicant’s mortgage was sold to another lender in the midst of negotiations. Ultimately, the Applicant’s house was foreclosed upon and sold at auction in May 2009 for $122,000. At that time the Applicant had lived in the house for 23 years. Under his state’s “One Action Law,” the lender has no other recourse and the Applicant has no further obligation on this debt (1.d). Applicant has paid this collection account in full, as shown in a communication from the creditor (1.e). Applicant has consistently denied owing this dental bill, which is for unapproved work done to his step-son. The original creditor now refuses to deal with him, and the collection agency is no longer in business. The Applicant has submitted disputes to all three of the credit reporting agencies. I find that the Applicant has done all that he can to resolve this debt (1.f). Applicant admits that he owed a credit union $5,026 for an automobile lease. The records show that this debt was discharged as part of the Applicant’s 2001 Chapter 7 filing, as discussed above (1.g). Applicant has consistently denied owing $80 for a past-due pest control bill. He submitted a copy of a paid check to the contractor from 2004. Applicant further stated that he has filed disputes with the credit reporting agencies concerning this debt. The most recent credit report, from July 2009, does not show this debt (1.h).

The judge granted the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d). The decision turned on the following: The applicant demonstrated a stable current financial situation and the ability to pay debts timely; He provided evidence of responsible actions taken to resolve past financial issues, including paying off debts and disputing inaccuracies; The applicant's financial difficulties were largely due to circumstances beyond his control, such as unemployment and family emergencies.

Why the Applicant Prevailed

• The applicant demonstrated a stable current financial situation and the ability to pay debts timely.
• He provided evidence of responsible actions taken to resolve past financial issues, including paying off debts and disputing inaccuracies.
• The applicant's financial difficulties were largely due to circumstances beyond his control, such as unemployment and family emergencies.

Conditions Referenced

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

• SOR issuedMay 15, 2009
• Answer filedJun 19, 2009
• Hearing heldSep 9, 2009
• Decision dateMar 15, 2010

Cite For

• Mitigation of Financial Issues Under Guideline F
• Consideration of the Whole-person Concept in Security Clearance Decisions
• Impact of Circumstances Beyond Control on Financial Obligations