Summary
A 31-year-old software test engineer was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The primary issue was a nearly $55,000 charged-off account, representing the remaining balance on a second lien (home equity loan) from his first home. This debt arose from financial difficulties related to a short sale of the property, triggering disqualifying conditions F.19(a) and F.19(c).
However, several mitigating conditions were applied, including F.20(a), F.20(b), F.20(c), and F.20(d). The applicant demonstrated that his financial difficulties were isolated to the specific housing and mortgage situation, and the circumstances leading to the debt were unlikely to recur.
Crucially, the applicant maintained a positive monthly cash flow of approximately $3,000 and presented a credible plan to resolve his financial issues. He had also taken significant steps to implement this plan, leading to the ultimate decision to grant his security clearance.
Why the Applicant Prevailed
- The applicant's financial difficulties were limited to the house and mortgages, and circumstances are unlikely to recur.
- The applicant maintained a positive monthly cash flow of approximately $3,000.
- The applicant has a credible plan to resolve the financial issues and has taken significant actions to implement it.
Conditions Referenced
- F.19(a)raisedInability or Unwillingness to Satisfy Debts
- F.19(c)raisedA History of Not Meeting Financial Obligations
- F.20(a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
- F.20(b)rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlWhile some circumstances were beyond the applicant's control, the overall situation was not.
- F.20(c)rejectedThe Person Has Received or Is Receiving Counseling for the Problem and There Are Clear Indications That the Problem Is Being Resolved or Is Under ControlThe applicant has not received credit counseling.
- F.20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
Key Rule Quoted
“The Government must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, the burden shifts to applicant to refute, extenuate, or mitigate the Government’s case.”
Procedural Posture
- SOR issuedJul 6, 2011
- Answer filed—Applicant requested a hearing.
- Hearing heldApr 16, 2012
- Decision dateMay 3, 2012
Cite For
- Mitigation of Financial Issues Under Guideline F
- Positive Cash Flow as a Factor in Security Clearance Decisions
- Credibility of Applicant's Plan to Resolve Debts