Summary
A 32-year-old defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to significant delinquent debts totaling approximately $197,724. These financial difficulties stemmed from job loss and a deteriorating economy, which led to a home foreclosure.
The Statement of Reasons detailed several categories of debt. Four accounts, totaling $2,259, were for medical bills incurred during a work-related injury that should have been covered by worker's compensation. Nine additional accounts, totaling $11,486, were owed to various creditors including credit card companies, department stores, and service providers. The largest portion of the debt, $181,507, was attributed to first and second mortgages. The applicant conceded that with a net monthly remainder of $230 available for discretionary spending, he had no reason not to pay even his smallest debts.
The denial was based on the applicant's failure to demonstrate a good-faith effort to resolve his delinquent debts. He did not establish repayment plans with any creditors, despite having available discretionary income. The judge found that the applicant's financial issues were ongoing and that he did not act aggressively or timely to address them.
Why the Applicant Was Denied
- The applicant failed to demonstrate a good-faith effort to resolve his delinquent debts.
- He did not establish a repayment plan with any of his creditors despite having a net remainder of $230 available for discretionary spending.
- The applicant's financial issues were ongoing and he did not act aggressively or timely to address them.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant's financial situation was exacerbated by job loss and the death of his father.
- AG ¶ 20(c)rejectedEvidence of Counseling for the ProblemThe applicant received minimal credit counseling but failed to follow through on any actionable steps.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant abandoned efforts to resolve his debts and did not establish a reasonable repayment plan.
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 issuedDec 3, 2009
- Answer filedJan 25, 2010Applicant requested a hearing.
- Hearing heldApr 1, 2010Hearing convened as scheduled.
- Decision dateApr 27, 2010
Cite For
- Insufficient Evidence of Financial Responsibility Under Guideline F
- Ongoing Financial Issues as a Basis for Denial
- Lack of Good-faith Efforts to Resolve Debts