Summary
A 50-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of significant financial difficulties. The applicant's financial record included two bankruptcies: a Chapter 7 filing and a Chapter 13 filing that was later dismissed due to payment defaults.
The Statement of Reasons detailed numerous outstanding debts and judgments, totaling over $28,000. These included a $12,214 judgment for a car loan, an $885 medical debt, an $1,886 debt to a cable/Internet provider, and a $5,090 debt to a collection company. Other listed debts ranged from $100 to $5,692, along with several additional judgments, including one for $2,379 filed in January 2005.
Despite some successful disputes of debts, the applicant failed to demonstrate responsible financial management or a good-faith effort to resolve the outstanding obligations. The decision cited the applicant's history of financial problems and the failure to adequately address or resolve the numerous delinquent debts and unpaid judgments as the basis for the denial.
Why the Applicant Was Denied
- The applicant has a history of financial problems, including a Chapter 7 bankruptcy and a Chapter 13 bankruptcy that was dismissed due to material default in payments.
- The applicant has numerous delinquent debts and unpaid judgments totaling over $28,000, which he did not adequately address or resolve.
- The applicant did not provide sufficient evidence of responsible financial management or good-faith efforts to repay debts.
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 issues stemmed from job loss and a downturn in the real estate market.
- AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's wages are being garnished for one judgment.
- AG ¶ 20(e)appliedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due DebtThe applicant successfully disputed several debts, leading to their removal from his credit report.
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 issuedMay 20, 2011
- Answer filedAug 1, 2011
- Hearing held—Decided on written record.
- Decision dateJan 26, 2012
Cite For
- Denial of Security Clearance Due to Unresolved Financial Obligations
- Impact of Financial History on Security Clearance Eligibility
- Consideration of Mitigating Factors Under Guideline F