Summary
The applicant, a 57-year-old employee of a defense contractor, faced security concerns under Guideline F due to significant financial issues, including two dismissed Chapter 13 bankruptcy filings and numerous delinquent debts exceeding $100,000. Despite her claims of intent to resolve her debts and positive endorsements from her supervisor, the judge found that the applicant failed to demonstrate responsible conduct or a plan to address her financial problems, leading to a denial of her security clearance application.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant filed a petition for Chapter 13 bankruptcy in October 2007. It was dismissed in March 2008 for failure to make the payments required by the bankruptcy plan (1.a). Applicant filed a second petition for Chapter 13 bankruptcy in July 2008. The petition was dismissed in August 2008 for failure to file the required documents (1.b). Applicant’s home was foreclosed and the property was sold, but she does not know if she owes a deficiency (1.c). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.d). The debts alleged in SOR ¶¶ 1.c and 1.e are the first and second mortgages on the home, in the amounts of $46,640 and $5,910 respectively (1.e). The debt in SOR ¶ 1.f ($49) was for a book ordered by her roommate in her name. Applicant has not paid the debt or disputed it (1.f). The debt alleged in SOR ¶ 1.g ($8,968) is for a deficiency and related charges after Applicant’s car was repossessed. It was included in Applicant’s 2007 bankruptcy petition, and it is unresolved (1.g). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.h). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.i). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.j). The debt alleged in SOR ¶ 1.k is a judgment for state taxes that was filed in July 1998, before Applicant’s two bankruptcy filings. It is unresolved (1.k). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.l). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.m). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.n). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.o). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.p). The debts alleged in SOR ¶¶ 1.d, 1.h-1.j, and 1.l-1.q were included in the two bankruptcies that were dismissed. The debts are unresolved (1.q).
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(b), AG ¶ 20(c), AG ¶ 20(d), AG ¶ 20(e). The decision turned on the following: Applicant has a history of financial neglect, including two dismissed bankruptcy filings and numerous unresolved debts; The applicant failed to demonstrate responsible conduct in addressing her financial issues despite being employed for several years; There was no evidence of a good-faith effort to repay overdue creditors or resolve debts.
Why the Applicant Was Denied
- Applicant has a history of financial neglect, including two dismissed bankruptcy filings and numerous unresolved debts.
- The applicant failed to demonstrate responsible conduct in addressing her financial issues despite being employed for several years.
- There was no evidence of a good-faith effort to repay overdue creditors or resolve debts.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to RecurApplicant's delinquent debts are numerous, ongoing, and not the result of circumstances making them unlikely to recur.
- AG ¶ 20(b)rejectedConditions Beyond the Person's ControlApplicant's loss of employment was due to her conduct, and she has not acted responsibly to resolve her debts.
- AG ¶ 20(c)rejectedReceived Counseling for the ProblemWhile counseling was completed, financial problems are not under control.
- AG ¶ 20(d)rejectedInitiated a Good-faith Effort to Repay Overdue CreditorsNo evidence of payments or resolution of delinquent debts.
- AG ¶ 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the Past-due DebtApplicant admitted all debts.
Key Rule Quoted
“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG.”
Procedural Posture
- SOR issuedApr 9, 2010
- Answer filedMay 4, 2010
- Hearing heldAug 31, 2010
- Decision dateNov 22, 2010
Cite For
- Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
- Impact of Multiple Bankruptcy Filings on Security Clearance Eligibility
- Importance of Demonstrating Responsible Conduct in Financial Matters for Clearance Approval.