ISCR Case 10-01641.h1

Case Headnote

ISCR Case No. 10-01641.h1

deniedJul 1, 2010· Hon. Rita C. O'Brien· hearing

Summary

A 31-year-old single mother with a bachelor's degree in information technology was denied a security clearance under Guideline F (Financial Considerations) due to significant financial delinquencies totaling over $72,000. These issues primarily stemmed from a 2009 condo foreclosure and various other unpaid debts.

Specific allegations included an unpaid $170 doctor's bill from 2009, a $445 unpaid cable bill from 2008, and an outstanding credit account opened in 2000 or 2001 with an estimated balance of $1,400-$1,500. Other debts included a $394 credit card balance from 2007 and a $6,331 deficiency from a voluntarily returned 2005 car. While a $14,195 past-due amount on the first mortgage was resolved through foreclosure, the applicant did not provide evidence that a $41,753 second mortgage was satisfied. Two other debts, a $376 gas bill and an $816 cellular phone bill, were disputed and subsequently removed from credit reports.

The denial was based on the applicant's failure to resolve approximately $10,000 in non-mortgage debts since 2008, her lack of control over her financial situation, and the absence of a concrete plan to address her obligations. The judge concluded that these factors raised doubts about her reliability and judgment, indicating insufficient mitigation of the security concerns.

Why the Applicant Was Denied

Applicant has not made efforts to resolve significant non-mortgage debts totaling approximately $10,000 since 2008.
Applicant's financial situation is not under control, and she has not established a concrete plan to address her debts.
Applicant's lack of attention to her financial obligations raises doubts about her reliability and judgment.

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 ControlApplicant's financial difficulties stemmed from unexpected events such as pregnancy-related absences and unemployment.
AG ¶ 20(e)appliedIndividual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due DebtApplicant successfully disputed a utility bill that was deleted from her credit report.

Key Rule Quoted

“A security clearance decision is intended only to resolve the questions of whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedDec 3, 2010
Answer filedDec 29, 2010
Hearing heldMar 16, 2011
Decision dateMay 31, 2011

Cite For

Insufficient Evidence of a Viable Plan to Resolve Financial Delinquencies Under Guideline F
Impact of Financial Instability on Security Clearance Eligibility
Consideration of Mitigating Factors Related to Financial Difficulties

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	$170, UNPAID (allegation 1.a) – In 2009, Applicant incurred this debt for her daughter’s doctor. She believed it was covered by insurance, but now realizes it was not. She testified she is “working to repay that” but has not made any payments toward it. $170	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$445, UNPAID (allegation 1.b.) - Applicant did not pay the last cable bill when she moved from her condo in June 2008. She believes the debt should be between $200 and $300. She has not made any payments toward this debt. $445	Against Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$1,285, UNPAID (allegation 1.c.) Applicant opened this account in 2000 or 2001. She was making payments one point, but she is uncertain of the date. She believes she made her last payment in 2009 or 2010 with part of an income tax refund. She testified the balance is probably now about $1,400 or $1,500. $1,285	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	$394, UNPAID (allegation 1.d.) - Applicant opened this credit card account in 2007. Her last payment was in 2009. $394	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	$41,753 (allegation 1.e.); - Both allegations relate to Applicant's condo that was foreclosed in 2009. Allegation 1.g. is a past-due amount on the first mortgage, as listed in Applicant's credit bureau reports. However, Applicant no longer owes payments on that loan. The lender has provided Applicant with a IRS Form 1099-A, which relates to foreclosure of secured properties. The lender has also informed Applicant that the matter is closed. Applicant did not, however, submit evidence showing that the second mortgage was satisfied through the foreclosure (allegation 1.e.). The record evidence is insufficient to determine whether or not she is liable for a deficiency on the second loan. She is seeking legal advice on its status. $41,753	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	$6,331, UNPAID (allegation 1.f.) - Applicant bought this 2005 car in 2005. She was five to six months behind in December 2008, and paid $1,500 to bring the loan current. Her last payment was in about February 2009. At her security interview in January 2010, she planned to set up a payment plan and have the account up-to-date by February 2010. Applicant voluntarily returned the car in 2010, because she was unable to keep up payments. She believes that the car was sold, and that she now owes $2,415. She has not contacted the company that currently holds the debt because she would not be able to make payments. $6,331	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$14,195 (allegation 1.g.) - Both allegations relate to Applicant's condo that was foreclosed in 2009. Allegation 1.g. is a past-due amount on the first mortgage, as listed in Applicant's credit bureau reports. However, Applicant no longer owes payments on that loan. The lender has provided Applicant with a IRS Form 1099-A, which relates to foreclosure of secured properties. The lender has also informed Applicant that the matter is closed. Applicant did not, however, submit evidence showing that the second mortgage was satisfied through the foreclosure (allegation 1.e.). The record evidence is insufficient to determine whether or not she is liable for a deficiency on the second loan. She is seeking legal advice on its status. $14,195	For Applicant	Unspecified Financial	Unknown	—	—	—
1.h	$6,831, UNPAID (allegation 1.h.) - This is a duplicate of allegation 1.f. Therefore, I am including in the total only the amount cited at allegation 1.h., $6,831, as shown in GE 5. $6,831	For Applicant	Unspecified Financial	Unknown	—	—	—
1.i	$376, DISPUTED (allegation 1.i.) – The debt relates to a gas bill. Applicant disputed it with the credit reporting agencies, because she had paid all the gas bills related to her condo. It has been deleted from her most recent credit report. $376	For Applicant	Utility or Phone Debt	Unknown	—	(e) reasonable, documented basis to dispute the debt	—
1.j	$816, DISPUTED (allegation 1.j.) – Applicant last had service from this cellular phone company in 2000. She believes this debt is an error. Her 2009 credit bureau report shows that she disputed the account with the credit reporting agencies. During her security interview, she said she would pay some but not all of the amount alleged, and would make payment arrangements by February 2010. It does not appear on Applicant's July 2010 credit bureau report, but Applicant provided no evidence showing the outcome of the credit agencies’ investigation. $816	Against Applicant	Utility or Phone Debt	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

$170, UNPAID (allegation 1.a) – In 2009, Applicant incurred this debt for her daughter’s doctor. She believed it was covered by insurance, but now realizes it was not. She testified she is “working to repay that” but has not made any payments toward it.

$170

Against Applicant

Medical Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

$445, UNPAID (allegation 1.b.) - Applicant did not pay the last cable bill when she moved from her condo in June 2008. She believes the debt should be between $200 and $300. She has not made any payments toward this debt.

$445

Against Applicant

Utility or Phone Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

$1,285, UNPAID (allegation 1.c.) Applicant opened this account in 2000 or 2001. She was making payments one point, but she is uncertain of the date. She believes she made her last payment in 2009 or 2010 with part of an income tax refund. She testified the balance is probably now about $1,400 or $1,500.

$1,285

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

$394, UNPAID (allegation 1.d.) - Applicant opened this credit card account in 2007. Her last payment was in 2009.

$394

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

$41,753 (allegation 1.e.); - Both allegations relate to Applicant's condo that was foreclosed in 2009. Allegation 1.g. is a past-due amount on the first mortgage, as listed in Applicant's credit bureau reports. However, Applicant no longer owes payments on that loan. The lender has provided Applicant with a IRS Form 1099-A, which relates to foreclosure of secured properties. The lender has also informed Applicant that the matter is closed. Applicant did not, however, submit evidence showing that the second mortgage was satisfied through the foreclosure (allegation 1.e.). The record evidence is insufficient to determine whether or not she is liable for a deficiency on the second loan. She is seeking legal advice on its status.

$41,753

Against Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

$6,331, UNPAID (allegation 1.f.) - Applicant bought this 2005 car in 2005. She was five to six months behind in December 2008, and paid $1,500 to bring the loan current. Her last payment was in about February 2009. At her security interview in January 2010, she planned to set up a payment plan and have the account up-to-date by February 2010. Applicant voluntarily returned the car in 2010, because she was unable to keep up payments. She believes that the car was sold, and that she now owes $2,415. She has not contacted the company that currently holds the debt because she would not be able to make payments.

$6,331

Against Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

$14,195 (allegation 1.g.) - Both allegations relate to Applicant's condo that was foreclosed in 2009. Allegation 1.g. is a past-due amount on the first mortgage, as listed in Applicant's credit bureau reports. However, Applicant no longer owes payments on that loan. The lender has provided Applicant with a IRS Form 1099-A, which relates to foreclosure of secured properties. The lender has also informed Applicant that the matter is closed. Applicant did not, however, submit evidence showing that the second mortgage was satisfied through the foreclosure (allegation 1.e.). The record evidence is insufficient to determine whether or not she is liable for a deficiency on the second loan. She is seeking legal advice on its status.

$14,195

For Applicant

Unspecified Financial

Unknown

—

1.h

$6,831, UNPAID (allegation 1.h.) - This is a duplicate of allegation 1.f. Therefore, I am including in the total only the amount cited at allegation 1.h., $6,831, as shown in GE 5.

$6,831

For Applicant

Unspecified Financial

Unknown

—

1.i

$376, DISPUTED (allegation 1.i.) – The debt relates to a gas bill. Applicant disputed it with the credit reporting agencies, because she had paid all the gas bills related to her condo. It has been deleted from her most recent credit report.

$376

For Applicant

Utility or Phone Debt

Unknown

—

(e) reasonable, documented basis to dispute the debt

—

1.j

$816, DISPUTED (allegation 1.j.) – Applicant last had service from this cellular phone company in 2000. She believes this debt is an error. Her 2009 credit bureau report shows that she disputed the account with the credit reporting agencies. During her security interview, she said she would pay some but not all of the amount alleged, and would make payment arrangements by February 2010. It does not appear on Applicant's July 2010 credit bureau report, but Applicant provided no evidence showing the outcome of the credit agencies’ investigation.

$816

Against Applicant

Utility or Phone Debt

Unknown

—

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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

WHOLE PERSON ANALYSIS

FORMAL FINDINGS

CONCLUSION

FOOTNOTES