ISCR Case 10-00977.h1

Case Headnote

ISCR Case No. 10-00977.h1

grantedNov 10, 2010· Hon. Jennifer I. Goldstein· hearing

Summary

A 42-year-old defense contractor employee was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant's financial history included a Chapter 7 bankruptcy in 1996, a home foreclosure in 2010, and approximately $71,616 in outstanding debt across several accounts. Specific allegations detailed a credit card debt of about $2,439, another credit card debt of approximately $8,247, and a Home Equity Line of Credit (HELOC) loan totaling around $60,930.

The applicant successfully mitigated these concerns by demonstrating that his financial difficulties stemmed from unforeseen circumstances, including job losses. He actively engaged with a debt management company (DMC) to address his credit card debts, making consistent payments from September 2009 through July 2010, resulting in both accounts being current by September 2010. For the HELOC loan, after a complaint was filed in June 2010, the applicant reached an agreement in July 2010 to make monthly payments, with proof of an initial payment in August 2010, leading to the dismissal of the complaint.

The decision to grant the clearance was based on the applicant's responsible actions to resolve his debts, maintain current payments, and establish savings, indicating a commitment to financial responsibility.

Why the Applicant Prevailed

The applicant's financial difficulties were caused by unforeseen circumstances beyond his control, including job losses.
He demonstrated responsible behavior by attempting to resolve his debts and working with a debt management company.
The applicant's recent financial actions, including maintaining current payments and establishing savings, indicated a commitment to financial responsibility.

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(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“An applicant is not required to be debt-free nor to develop a plan for paying off all debts immediately or simultaneously.”
— ISCR Case No. 08-06567 at 3 (App. Bd. Dec. October 29, 2009)

Procedural Posture

SOR issuedJun 3, 2010
Answer filedJun 21, 2010
Hearing heldSep 8, 2010
Decision dateNov 10, 2010

Cite For

Mitigation of Financial Concerns Under Guideline F Due to Unforeseen Circumstances
Good-faith Efforts to Resolve Debts Through a Debt Management Company
Consideration of the Whole-person Concept in Security Clearance Decisions

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 is indebted on a credit card in the approximate amount of $2,439, as alleged in allegation 1.a. This debt is listed with the DMC. Records show that from September 2009 through July 2010, payments have been consistently made to this creditor, through the DMC. Applicant’s September 2010 credit report reflects that this account is current. $2,439	For Applicant	Credit Card Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	Applicant is indebted on a credit card in the approximate amount of $8,247, as alleged in allegation 1.b. This debt is listed with the DMC. Records show that from September 2009 through July 2010, payments of approximately $200 per month have been consistently made to this creditor, through the DMC. Applicant’s September 2010 credit report reflects that this account is current. $8,247	For Applicant	Credit Card Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	Applicant is indebted on the HELOC loan in the approximate amount of $60,930. The creditor filed a Complaint for breach of a promissory note in a state superior court on June 24, 2010. On approximately July 29, 2010, Applicant reached an agreement with this creditor to pay $225 per month for one year and then increase payments to $300 per month until this debt is satisfied. The Complaint was dismissed. Applicant presented proof that a $225 payment was made on August 9, 2010 under this agreement. $60,930	For Applicant	Unspecified Financial	Unknown	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.d	In addition, he has been subject to a home foreclosure in February 2010. These financial delinquencies occurred after a 1996 discharge of approximately $22,261 in unsecured debt through a Chapter 7 bankruptcy.	For Applicant	Mortgage or Home Loan Debt	Unknown	—	—	—
1.e	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant is indebted on a credit card in the approximate amount of $2,439, as alleged in allegation 1.a. This debt is listed with the DMC. Records show that from September 2009 through July 2010, payments have been consistently made to this creditor, through the DMC. Applicant’s September 2010 credit report reflects that this account is current.

$2,439

For Applicant

Credit Card Debt

Admitted

—

(b) conditions largely beyond the person’s control; acted responsibly

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

Documented

Debt Paid in Full

1.b

Applicant is indebted on a credit card in the approximate amount of $8,247, as alleged in allegation 1.b. This debt is listed with the DMC. Records show that from September 2009 through July 2010, payments of approximately $200 per month have been consistently made to this creditor, through the DMC. Applicant’s September 2010 credit report reflects that this account is current.

$8,247

For Applicant

Credit Card Debt

Admitted

—

(b) conditions largely beyond the person’s control; acted responsibly

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

Documented

Debt Paid in Full

1.c

Applicant is indebted on the HELOC loan in the approximate amount of $60,930. The creditor filed a Complaint for breach of a promissory note in a state superior court on June 24, 2010. On approximately July 29, 2010, Applicant reached an agreement with this creditor to pay $225 per month for one year and then increase payments to $300 per month until this debt is satisfied. The Complaint was dismissed. Applicant presented proof that a $225 payment was made on August 9, 2010 under this agreement.

$60,930

For Applicant

Unspecified Financial

Unknown

—

(b) conditions largely beyond the person’s control; acted responsibly

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

Documented

Payment Plan with Creditor

1.d

In addition, he has been subject to a home foreclosure in February 2010. These financial delinquencies occurred after a 1996 discharge of approximately $22,261 in unsecured debt through a Chapter 7 bankruptcy.

For Applicant

Mortgage or Home Loan Debt

Unknown

—

1.e

specific text not stated in this decision

For Applicant

Unspecified Financial

Unknown

—

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Case Profile

Summary

Why the Applicant Prevailed

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

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES