ISCR Case 10-09264.h1

Case Headnote

ISCR Case No. 10-09264.h1

deniedFeb 28, 2013· Hon. Philip S. Howe· hearing

Summary

A 47-year-old defense contractor and former U.S. Army service member was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved financial issues totaling $121,543. The applicant had accumulated nine delinquent debts, which raised concerns about his reliability and trustworthiness.

Specific allegations included an $866 debt to a community college, which was being resolved through a payment plan, and a $427 credit card debt that was paid. However, several debts remained unresolved, such as a $95 music mail-order club debt, a $5,023 automobile loan, a $580 bank debt on a closed account, a $206 debt to an unknown entity, and a disputed $622 cell phone bill. A repossessed automobile loan with a $7,724 balance was being resolved. The most substantial unresolved issue was a $106,000 mortgage, which resulted in a 2009 foreclosure and a $94,715.08 judgment against the applicant, with the status of any remaining debt being uncertain.

Despite some efforts to address certain debts, the applicant failed to present a comprehensive plan for resolving his overall financial obligations. The decision highlighted that the applicant's financial problems were recent and continuous, indicating a lack of responsibility in managing his debts, ultimately leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant accumulated nine delinquent debts totaling $121,543 that remain unpaid or unresolved.
The applicant did not present a comprehensive and coherent plan to repay his debts within a certain time.
The applicant's financial problems are recent and continuous, demonstrating a lack of responsibility in managing debts.

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)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant did not show that his loss of employment had a substantial effect on his ability to repay debts.
AG ¶ 20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant did not submit a written repayment plan or demonstrate efforts to resolve smaller debts.

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 issuedJun 4, 2012
Answer filedJul 15, 2012
Hearing held—Applicant requested decision on written record.
Decision dateFeb 28, 2013

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations
Failure to Demonstrate a Coherent Debt Repayment Plan
Impact of Financial Issues on Reliability and Trustworthiness Under Guideline F

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 owes a community college $866 (Subparagraph 1.a). The current amount of the debt is $715.47. Applicant claims he arranged a $50 monthly payment plan starting on July 11, 2012. His Response contained two billing documents showing another $50 payment was due December 12, 2012. Applicant’s regular payment plan is shown in two documents submitted with his FORM Response. This debt is being resolved. $715	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.b	Applicant owes a music mail-order club $95 (Subparagraph 1.b). Applicant claims this debt was paid on July 10, 2012, but he did not submit any information validating his assertion. The credit report of November 14, 2012, contained in the FORM shows the debt as unpaid as of that date. This debt is unresolved. $95	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant owes a bank $427 on a credit card debt (Subparagraph 1.c). The debt appears on his April 6, 2012 credit report in the File. His November 14, 2012 credit report in the File shows the balance as zero. Applicant paid this debt on October 23, 2012. The debt was owed on a credit card his former wife had. This debt is resolved. $427	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.d	Applicant purchased an automobile operated by his former wife. It has a $5,023 balance on the loan (Subparagraph 1.d). He claims in his Answer he is paying $250 monthly to repay this loan. Applicant did not submit any documents proving he is making these payments. However, the debt continues to appear on Applicant’s credit reports as unpaid, as late as November 14, 2012. This debt is unresolved. $5,023	Against Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	An automobile purchased by Applicant has a debt balance on the purchase loan of $7,724 (Subparagraph 1.e). The seller repossessed the car. Applicant contends he pays $101 monthly to repay this debt. Applicant submitted a document with the same final four digits of the loan number showing a check sent to the creditor in December 2012 on a balance of $6,713.78. The November 14, 2012 credit report shows this debt is a paid repossession. This debt is being resolved. $7,724	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly	Documented Debt Paid in Full
1.f	Applicant’s mortgage lender listed his home as a foreclosure with a loan balance of $106,000. The house was purchased in 2001. This home was foreclosed in 2009 (Subparagraph 1.f). The house was to be sold as part of the divorce arrangement with his first wife but Applicant could not do so because he claimed it needed too much repair work to present favorably for a sale. The mortgage lender obtained a $94,715.08 judgment plus costs against Applicant in December 2010. There is no information regarding any current debt on the balance between the $97,824 sale price at the sheriff’s sale in 2010, or any tax consequences from the house sale at less than the amount owed on the mortgage balance. It was appraised at $120,000 as shown on a document dated December 9, 2010, submitted in Applicant’s Response to the FORM. Applicant did not submit any current information concerning the status of any residue debt from the sheriff’s sale. The November 14, 2012 credit report states the foreclosure process started. The status of the balance of the debt is uncertain and therefore it is unresolved. $106,000	Against Applicant	Mortgage or Home Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant owes a bank $580 on a closed account (Subparagraph 1.g). He claims he contacted the bank to resolve the debt but the person to whom he was directed has not returned his telephone calls. This debt continues to appear on Applicant’s credit reports. It is unresolved. $580	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant owes another entity $206 (Subparagraph 1.h). Applicant denies owing this debt and knowing who the creditor is. His Answer stated he would research this debt. No further information was sent by Applicant. This debt is unresolved. $206	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Applicant also denies owing a cell telephone bill for $622 (Subparagraph 1.i). Applicant claims he purchased a cell phone in 1999 through a website. The number he received was not a local number and he requested a local telephone number for his cell phone number. He got a new number and completed the contract in 2001. He asserts he disputed the debt in 2001 and has continued to do so. There has not been a resolution of this debt. This debt is in dispute and is unresolved. $622	Against Applicant	Utility or Phone Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant owes a community college $866 (Subparagraph 1.a). The current amount of the debt is $715.47. Applicant claims he arranged a $50 monthly payment plan starting on July 11, 2012. His Response contained two billing documents showing another $50 payment was due December 12, 2012. Applicant’s regular payment plan is shown in two documents submitted with his FORM Response. This debt is being resolved.

$715

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.b

Applicant owes a music mail-order club $95 (Subparagraph 1.b). Applicant claims this debt was paid on July 10, 2012, but he did not submit any information validating his assertion. The credit report of November 14, 2012, contained in the FORM shows the debt as unpaid as of that date. This debt is unresolved.

$95

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Applicant owes a bank $427 on a credit card debt (Subparagraph 1.c). The debt appears on his April 6, 2012 credit report in the File. His November 14, 2012 credit report in the File shows the balance as zero. Applicant paid this debt on October 23, 2012. The debt was owed on a credit card his former wife had. This debt is resolved.

$427

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.d

Applicant purchased an automobile operated by his former wife. It has a $5,023 balance on the loan (Subparagraph 1.d). He claims in his Answer he is paying $250 monthly to repay this loan. Applicant did not submit any documents proving he is making these payments. However, the debt continues to appear on Applicant’s credit reports as unpaid, as late as November 14, 2012. This debt is unresolved.

$5,023

Against Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

An automobile purchased by Applicant has a debt balance on the purchase loan of $7,724 (Subparagraph 1.e). The seller repossessed the car. Applicant contends he pays $101 monthly to repay this debt. Applicant submitted a document with the same final four digits of the loan number showing a check sent to the creditor in December 2012 on a balance of $6,713.78. The November 14, 2012 credit report shows this debt is a paid repossession. This debt is being resolved.

$7,724

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Documented

Debt Paid in Full

1.f

Applicant’s mortgage lender listed his home as a foreclosure with a loan balance of $106,000. The house was purchased in 2001. This home was foreclosed in 2009 (Subparagraph 1.f). The house was to be sold as part of the divorce arrangement with his first wife but Applicant could not do so because he claimed it needed too much repair work to present favorably for a sale. The mortgage lender obtained a $94,715.08 judgment plus costs against Applicant in December 2010. There is no information regarding any current debt on the balance between the $97,824 sale price at the sheriff’s sale in 2010, or any tax consequences from the house sale at less than the amount owed on the mortgage balance. It was appraised at $120,000 as shown on a document dated December 9, 2010, submitted in Applicant’s Response to the FORM. Applicant did not submit any current information concerning the status of any residue debt from the sheriff’s sale. The November 14, 2012 credit report states the foreclosure process started. The status of the balance of the debt is uncertain and therefore it is unresolved.

$106,000

Against Applicant

Mortgage or Home Loan Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

Applicant owes a bank $580 on a closed account (Subparagraph 1.g). He claims he contacted the bank to resolve the debt but the person to whom he was directed has not returned his telephone calls. This debt continues to appear on Applicant’s credit reports. It is unresolved.

$580

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

Applicant owes another entity $206 (Subparagraph 1.h). Applicant denies owing this debt and knowing who the creditor is. His Answer stated he would research this debt. No further information was sent by Applicant. This debt is unresolved.

$206

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

Applicant also denies owing a cell telephone bill for $622 (Subparagraph 1.i). Applicant claims he purchased a cell phone in 1999 through a website. The number he received was not a local number and he requested a local telephone number for his cell phone number. He got a new number and completed the contract in 2001. He asserts he disputed the debt in 2001 and has continued to do so. There has not been a resolution of this debt. This debt is in dispute and is unresolved.

$622

Against Applicant

Utility or Phone Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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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 CONCEPT

FORMAL FINDINGS

CONCLUSION