ISCR Case 09-01736.h1

Case Headnote

ISCR Case No. 09-01736.h1

grantedApr 29, 2010· Hon. Rita C. O'Brien· hearing

Summary

A 40-year-old male applicant with prior military service was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). These concerns arose from financial difficulties primarily caused by his wife's failed business. The Statement of Reasons detailed several outstanding debts, including a $13,000 credit card debt, a $5,574 student loan, a $2,924 credit card debt, a $5,943 student loan, and a $132 overdrawn account. One credit card allegation was identified as a duplicate of another.

The applicant demonstrated substantial efforts to mitigate these financial issues. He assumed control of family finances, established a budget, and actively made payments on his debts. Specifically, he negotiated a $6,000 settlement for the $13,000 credit card, having paid $1,000 and planning to use his 2009 tax refund for the remaining $5,000. He restarted payments on the $5,574 student loan at $76 per month. He settled the $2,924 credit card for $662, which is paid in full, and settled the $5,943 student loan for $2,000 in October 2009, which is also paid. The $132 overdrawn account was paid in full by November 2009.

The judge found that the applicant had successfully mitigated the financial concerns. The decision highlighted that the financial problems were largely due to circumstances beyond his control, and he had taken decisive actions to manage and resolve the debts.

Why the Applicant Prevailed

The applicant took over family finances and created a budget to manage debts.
He made significant payments towards outstanding debts and negotiated settlements with creditors.
The financial issues were largely due to circumstances beyond his control, specifically his wife's business failure.

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(a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
AG ¶ 20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem And/or 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

“A security clearance decision is intended only to resolve the questions of whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedOct 20, 2009
Answer filedNov 10, 2009
Hearing heldMar 4, 2010
Decision dateApr 29, 2010

Cite For

Mitigation of Financial Issues Under Guideline F
Consideration of Circumstances Beyond the Applicant's Control
Good-faith Efforts to Repay Debts as a Mitigating Factor

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	credit card, $13,000 – PAYING. Applicant used the card for living expenses, including the support of his wife’s grandparents, and to purchase machinery for his wife’s business. He negotiated a settlement of $6,000 with the creditor. He has paid $1,000, and will use his 2009 tax refund to pay the additional $5,000. $13,000	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor
1.b	student loan, $5,574 – PAYING. Applicant was paying $100 per month, until he could no longer afford the payments. Approximately 15 months ago, he restarted the payment plan, and he has been paying $76 per month since then. After he successfully paid for 11 consecutive months, the account was transferred to the current creditor. $5,574	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.c	credit card, $2,924 – PAID. Applicant used this credit card for his wife’s business and family living expenses. He provided documentation showing that he settled the account for $662, and it is paid in full. $2,924	For Applicant	Credit Card Debt	Admitted	—	—	Documented Debt Paid in Full
1.d	student loan, $5,943 – PAID. In October 2009, Applicant arranged for a settlement on this account of $2,000. He provided documentation showing that he has paid the balance. $5,943	For Applicant	Student Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.e	credit card – DUPLICATE. Applicant provided documentation from the creditor showing that this account was transferred to the creditor in allegation 1.a.	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	overdrawn account - $132 – PAID. Applicant paid this debt in full, and provided supporting documentation dated November 2009. $132	For Applicant	Unspecified Financial	Admitted	—	—	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

credit card, $13,000 – PAYING. Applicant used the card for living expenses, including the support of his wife’s grandparents, and to purchase machinery for his wife’s business. He negotiated a settlement of $6,000 with the creditor. He has paid $1,000, and will use his 2009 tax refund to pay the additional $5,000.

$13,000

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(a) behavior happened long ago / infrequent / unlikely to recur

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

Documented

Payment Plan with Creditor

1.b

student loan, $5,574 – PAYING. Applicant was paying $100 per month, until he could no longer afford the payments. Approximately 15 months ago, he restarted the payment plan, and he has been paying $76 per month since then. After he successfully paid for 11 consecutive months, the account was transferred to the current creditor.

$5,574

For Applicant

Student Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(a) behavior happened long ago / infrequent / unlikely to recur

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

Documented

Payment Plan with Creditor

1.c

credit card, $2,924 – PAID. Applicant used this credit card for his wife’s business and family living expenses. He provided documentation showing that he settled the account for $662, and it is paid in full.

$2,924

For Applicant

Credit Card Debt

Admitted

—

Documented

Debt Paid in Full

1.d

student loan, $5,943 – PAID. In October 2009, Applicant arranged for a settlement on this account of $2,000. He provided documentation showing that he has paid the balance.

$5,943

For Applicant

Student Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.e

credit card – DUPLICATE. Applicant provided documentation from the creditor showing that this account was transferred to the creditor in allegation 1.a.

For Applicant

Unspecified Financial

Admitted

—

1.f

overdrawn account - $132 – PAID. Applicant paid this debt in full, and provided supporting documentation dated November 2009.

$132

For Applicant

Unspecified Financial

Admitted

—

Documented

Debt Paid in Full

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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 ANALYSIS

FORMAL FINDINGS

CONCLUSION

FOOTNOTES