Summary
A 43-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial irresponsibility. The Statement of Reasons detailed three Chapter 7 bankruptcies and ongoing delinquent debts.
The first Chapter 7 bankruptcy was filed in 1998, discharging $150,067.52, which included two mortgages and 15 delinquent credit card debts. A second Chapter 7 bankruptcy was filed on April 29, 2010, listing $363,717.22 in debts, including a $70,150 federal income tax debt from 2005. A third Chapter 7 bankruptcy was filed on May 25, 2010, listing $345,244.88 in debts, which included the same federal tax debt. Concurrently, on September 1, 2010, the applicant filed a Chapter 13 bankruptcy to establish a payment plan for $72,879.14 in federal tax debt. Additionally, the Statement of Reasons listed five delinquent debts totaling $12,486, comprising four credit cards and one overdrawn account, all of which were discharged in the 2010 Chapter 7 bankruptcies.
The denial was based on the applicant's long history of financial irresponsibility, including three Chapter 7 bankruptcies within 11 years. The judge found no evidence of good judgment or efforts to resolve financial issues, concluding that the applicant's financial behavior demonstrated a pattern of excessive spending and an inability to meet obligations, raising concerns about reliability and trustworthiness.
Why the Applicant Was Denied
- The applicant has a long history of financial irresponsibility, including three Chapter 7 bankruptcies in 11 years.
- He failed to provide evidence of good judgment or efforts to resolve his financial issues.
- The applicant's financial behavior indicated a pattern of excessive spending and inability to meet obligations.
Conditions Referenced
- AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(b)appliedIndebtedness Caused by Frivolous or Irresponsible Spending
- AG ¶ 19(c)appliedHistory of Not Meeting Financial Obligations
- AG ¶ 19(e)appliedFailure to File Annual Federal, State, or Local Income Tax Returns
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 issuedSep 13, 2010
- Answer filedSep 16, 2010
- Hearing held—Case decided on the written record.
- Decision dateMar 14, 2011
Cite For
- Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
- Impact of Multiple Bankruptcies on Security Clearance Eligibility
- Evaluation of Financial Behavior as Indicative of Reliability and Trustworthiness