ISCR Case 09-06567.h1

Case Headnote

ISCR Case No. 09-06567.h1

deniedMay 31, 2011· Hon. John Grattan Metz, Jr.· hearing

Summary

A 41-year-old management analyst, employed by a defense contractor, was denied a security clearance under Guideline F (Financial Considerations) due to significant and ongoing financial issues. The applicant's Statement of Reasons detailed multiple delinquent debts totaling over $68,000, alongside a Chapter 7 bankruptcy filing in May 2000, which was discharged in September 2000.

Specific debts included a $5,500 deficiency from a March 2010 automobile repossession, settled for thirty cents on the dollar in December 2010. Eight educational loans, delinquent in 2007 and 2008, were rehabilitated in January 2010 through nine monthly $200 payments. Other debts, ranging from $65 to $8,954, were addressed through various means, including full payments, settlements, and payment agreements, with some resolved between November 2009 and January 2011. A medical bill for $8,954 remained in collection, with the applicant making $150 monthly payments.

Despite some efforts to resolve her debts, the judge determined that the applicant's financial problems were recent, multiple, and not attributable to unusual, non-recurring circumstances. The applicant did not establish a clear track record demonstrating that her financial difficulties would not recur, particularly in light of impending income changes. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant has a history of financial difficulties and financial irresponsibility going back several years.
The applicant's financial problems were both recent and multiple, and not due to unusual circumstances unlikely to recur.
The applicant did not establish a clear track record that suggests her financial problems will not recur.

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)rejectedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to RecurThe applicant's financial problems were recent and multiple.
AG ¶ 20(b)rejectedConditions Resulting in Financial Problems Were Largely Beyond the Person's ControlWhile the murder of her son's father was beyond her control, it did not precipitate her financial problems.
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors or Resolve DebtsThe applicant made some payments on her debts, but not enough to fully mitigate concerns.

Key Rule Quoted

“The Government has a compelling interest in ensuring each applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedSep 9, 2010
Answer filed—
Hearing heldJan 5, 2011
Decision dateMay 31, 2011

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Impact of Financial History on Security Clearance Eligibility
Insufficient Mitigation of Financial Issues Under Guideline F

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	Applicant filed for chapter 7 bankruptcy protection in May 2000 and was discharged of her dischargeable debt in September 2000. $4,000	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	SOR debt 1.b ($189) in December 2010. $189	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	SOR debt 1.c—a $5,500 deficiency on a March 2010 automobile repossession—for thirty cents on the dollar in December 2010. $5,500	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.d	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e	The eight SOR debts at 1.e-l are educational loans that fell delinquent in 2007 and 2008, and were rehabilitated in January 2010 by Applicant paying $200 monthly for nine months. $43,000	Against Applicant	Student Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f–1.l	7 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—
1.m	Applicant claimed she had paid SOR debt 1.m ($107) five years ago. However, she discovered that she had a second account with the creditor. She paid the account in full in January 2011. $107	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.n	SOR debt 1.n ($92) and the account is being removed from her credit report. $92	For Applicant	Unspecified Financial	Denied	—	—	—
1.o	The medical bill for Applicant’s tummy tuck (SOR 1.o, $8,954) has been in collection by several collection agents. Applicant reached an agreement with one collection agent to pay $150 per month. $8,954	For Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.p	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.q	In December 2009, Applicant reached an agreement to pay approximately $200 on SOR debt 1.q ($641) in January 2010. Applicant did not make that payment because the creditor offered to accept a lump-sum settlement of 50% of the balance due in January 2010. Applicant paid the debt in April 2010. $641	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.r	Applicant did not make that payment because the creditor offered to accept a lump-sum settlement of 50% of the balance due in January 2010. Applicant paid the debt in April 2010. $230	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.s	Applicant paid SOR debt 1.s ($65) in January 2011. $65	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.t	Applicant paid SOR debt 1.t ($565) in November 2009. $565	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed for chapter 7 bankruptcy protection in May 2000 and was discharged of her dischargeable debt in September 2000.

$4,000

Against Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

SOR debt 1.b ($189) in December 2010.

$189

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.c

SOR debt 1.c—a $5,500 deficiency on a March 2010 automobile repossession—for thirty cents on the dollar in December 2010.

$5,500

Against Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.d

specific text not stated in this decision

For Applicant

Unspecified Financial

Unknown

—

1.e

The eight SOR debts at 1.e-l are educational loans that fell delinquent in 2007 and 2008, and were rehabilitated in January 2010 by Applicant paying $200 monthly for nine months.

$43,000

Against Applicant

Student Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f–1.l

7 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)

Against Applicant

—

1.m

Applicant claimed she had paid SOR debt 1.m ($107) five years ago. However, she discovered that she had a second account with the creditor. She paid the account in full in January 2011.

$107

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.n

SOR debt 1.n ($92) and the account is being removed from her credit report.

$92

For Applicant

Unspecified Financial

Denied

—

1.o

The medical bill for Applicant’s tummy tuck (SOR 1.o, $8,954) has been in collection by several collection agents. Applicant reached an agreement with one collection agent to pay $150 per month.

$8,954

For Applicant

Medical Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.p

specific text not stated in this decision

For Applicant

Unspecified Financial

Unknown

—

1.q

In December 2009, Applicant reached an agreement to pay approximately $200 on SOR debt 1.q ($641) in January 2010. Applicant did not make that payment because the creditor offered to accept a lump-sum settlement of 50% of the balance due in January 2010. Applicant paid the debt in April 2010.

$641

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.r

Applicant did not make that payment because the creditor offered to accept a lump-sum settlement of 50% of the balance due in January 2010. Applicant paid the debt in April 2010.

$230

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.s

Applicant paid SOR debt 1.s ($65) in January 2011.

$65

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.t

Applicant paid SOR debt 1.t ($565) in November 2009.

$565

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

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Case Profile

Summary

Why the Applicant Was Denied

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

FORMAL FINDINGS

CONCLUSION

FOOTNOTES