ISCR Case 08-11887.h1

Case Headnote

ISCR Case No. 08-11887.h1

grantedFeb 28, 2011· Hon. Arthur E. Marshall, Jr.· hearing

Summary

A 36-year-old proposal developer was granted a security clearance despite initial concerns under Guideline F (Financial Considerations) due to a history of delinquent debts. The Statement of Reasons (SOR) listed ten specific financial allegations.

The applicant successfully addressed eight of these ten debts. This included satisfying three utility collections for $100, $25, and $272, respectively, by February 2010. An $801 disputed debt was settled for $640.92 in March 2010, and a $299 overpayment of GI Bill benefits was repaid by March 2010. A $4,252 debt for an apartment was favorably addressed by a notarized roommate release form from January 2010, showing the applicant relinquished responsibility in June 2008. A health club issue, which led to a contempt of court arrest warrant, was resolved, and the debt satisfied in October 2008. Additionally, an $18,239 student loan account has been in timely repayment since August 2010 through a rehabilitation program.

Two debts remained unaddressed: a $4,020 debt for tax preparation services and a $5,324 debt for mechanic’s tools. Despite these, the administrative judge found that the applicant had mitigated the financial concerns by demonstrating a commitment to financial responsibility, developing a clear repayment strategy with financial counseling and family support, and experiencing a significant improvement in his financial situation after a pay raise. The security clearance was therefore granted.

Why the Applicant Prevailed

Applicant addressed eight of the ten debts listed in the SOR, demonstrating a commitment to financial responsibility.
He developed a clear strategy for managing and repaying his debts, aided by financial counseling and support from family.
The applicant's financial situation improved significantly after receiving a pay raise, allowing him to meet his obligations without undue hardship.

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)appliedConditions That Resulted in the Behavior Were Largely Beyond the Person’s Control
AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem and There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“The AG does not require that all one’s delinquent debts must be paid. It only requires that an applicant establish a reasonable plan to resolve the debts, and that the applicant has taken meaningful actions to implement the plan.”

Procedural Posture

SOR issuedJan 8, 2010
Answer filedMar 23, 2010
Hearing heldDec 16, 2010
Decision dateFeb 28, 2011

Cite For

Mitigation of Financial Considerations Under Guideline F
Importance of a Reasonable Repayment Plan for Outstanding Debts
Impact of Personal Circumstances on Financial Behavior and Responsibility

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	Collection for $100 – Paid. This county utility account was satisfied in February 2010. $100	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.b	Collection for $25 – Paid. This debt was for a returned check. The Government accepted evidence excised from Applicant’s bank statement that this debt was satisfied in February 2010. It is no longer reflected on Applicant’s credit report. $25	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Collection for $272 – Paid. This utility bill was posted as paid by February 1, 2010. $272	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.d	Collection for $801 – Paid. This debt was disputed. It was ultimately settled in March 2010 by payment of $640.92. $801	For Applicant	Unspecified Financial	Admitted	—	—	—
1.e	Collection for $4,020 – Unaddressed. This debt was incurred for tax preparation services used by both Applicant and his estranged wife. The couple is working at reconciliation and Applicant hopes they will soon develop a plan to address this debt together. $4,020	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.f	Collection for $299 – Paid. This debt was incurred because of an accidental overpayment of Applicant’s GI Bill benefits in January 2010. It was repaid by March 2010. $299	For Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Collection for $5,324 – Unaddressed. This debt was incurred for mechanic’s tools. Applicant plans to satisfy this debt after repayment of the debts noted at 1.e and 1.h. $5,324	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.h	Collection for $18,239 – In repayment. This account is for student loans. Applicant has been in timely repayment under a student loan rehabilitation program since August 2010, when he initiated monthly payments through automatic payroll deduction. $18,239	For Applicant	Student Loan Debt	Admitted	—	—	—
1.i	Collection for $4,252 – Favorably addressed. This debt was incurred for an apartment rented and maintained by Applicant’s estranged wife during their separation. Applicant submitted a notarized roommate release form on the apartment entity’s letterhead, dated January 21, 2010, showing that Applicant had relinquished possession of the unit in June 2008 and forfeited his lease responsibilities and security deposit to his estranged wife. $4,252	For Applicant	Unspecified Financial	Admitted	—	—	—
1.j	Collection issue with health club resulting in Contempt of Court arrest warrant for failure to provide financial records (debt satisfied in October 2008) – Issue resolved/debt satisfied.	For Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Collection for $100 – Paid. This county utility account was satisfied in February 2010.

$100

For Applicant

Utility or Phone Debt

Admitted

—

1.b

Collection for $25 – Paid. This debt was for a returned check. The Government accepted evidence excised from Applicant’s bank statement that this debt was satisfied in February 2010. It is no longer reflected on Applicant’s credit report.

$25

For Applicant

Unspecified Financial

Admitted

—

1.c

Collection for $272 – Paid. This utility bill was posted as paid by February 1, 2010.

$272

For Applicant

Utility or Phone Debt

Admitted

—

1.d

Collection for $801 – Paid. This debt was disputed. It was ultimately settled in March 2010 by payment of $640.92.

$801

For Applicant

Unspecified Financial

Admitted

—

1.e

Collection for $4,020 – Unaddressed. This debt was incurred for tax preparation services used by both Applicant and his estranged wife. The couple is working at reconciliation and Applicant hopes they will soon develop a plan to address this debt together.

$4,020

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Other

1.f

Collection for $299 – Paid. This debt was incurred because of an accidental overpayment of Applicant’s GI Bill benefits in January 2010. It was repaid by March 2010.

$299

For Applicant

Unspecified Financial

Admitted

—

1.g

Collection for $5,324 – Unaddressed. This debt was incurred for mechanic’s tools. Applicant plans to satisfy this debt after repayment of the debts noted at 1.e and 1.h.

$5,324

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Other

1.h

Collection for $18,239 – In repayment. This account is for student loans. Applicant has been in timely repayment under a student loan rehabilitation program since August 2010, when he initiated monthly payments through automatic payroll deduction.

$18,239

For Applicant

Student Loan Debt

Admitted

—

1.i

Collection for $4,252 – Favorably addressed. This debt was incurred for an apartment rented and maintained by Applicant’s estranged wife during their separation. Applicant submitted a notarized roommate release form on the apartment entity’s letterhead, dated January 21, 2010, showing that Applicant had relinquished possession of the unit in June 2008 and forfeited his lease responsibilities and security deposit to his estranged wife.

$4,252

For Applicant

Unspecified Financial

Admitted

—

1.j

Collection issue with health club resulting in Contempt of Court arrest warrant for failure to provide financial records (debt satisfied in October 2008) – Issue resolved/debt satisfied.

For Applicant

Unspecified Financial

Admitted

—

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Case Profile

Summary

Why the Applicant Prevailed

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