ISCR Case 10-10469.h1

Case Headnote

ISCR Case No. 10-10469.h1

grantedApr 30, 2012· Hon. Nichole L. Noel· hearing

Summary

A 57-year-old federal contractor and retired Army sergeant was granted a security clearance despite initial concerns under Guideline F (Financial Considerations) related to approximately $65,000 in delinquent debt. The Statement of Reasons detailed several financial issues, including a $15,000 judgment from November 2009 for a personal loan, a $16,237 mortgage deficiency balance after a January 2009 foreclosure, and a $7,118 deficiency balance following a car repossession in April 2010. Additionally, the applicant's wages were garnished for $3,500 in April 2008 due to unpaid property taxes from 2007 and 2008, resulting from a failure to establish an escrow account.

The judge applied Disqualifying Conditions F.19(a) and F.19(c), but ultimately found that Mitigating Conditions F.20(a), F.20(b), and F.20(d) were applicable. The applicant demonstrated a good-faith effort to resolve his financial difficulties, having satisfied five of the nine delinquent debts and actively participating in payment plans for the remaining obligations.

The decision to grant the clearance was based on the finding that the applicant's financial problems were largely due to circumstances beyond his control, including loss of income and personal issues. His proactive steps to address the debts, coupled with the external factors contributing to his financial distress, led to the favorable outcome.

Why the Applicant Prevailed

The applicant resolved five of the nine delinquent debts and is actively participating in payment plans for others.
The applicant demonstrated a good-faith effort to address his financial issues despite significant personal and financial challenges.
The financial problems were largely due to circumstances beyond the applicant's control, including loss of income and personal issues.

Conditions Referenced

Disqualifying

F.19(a)raisedInability or Unwillingness to Satisfy Debts
F.19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

F.20(a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur and Does Not Cast Doubt on the Individual’s Current Reliability, Trustworthiness, or Good Judgment
F.20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control and the Individual Acted Responsibly Under the Circumstances
F.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. All that is required is that an applicant act responsibly given his circumstances and develop a reasonable plan for repayment, accompanied by concomitant conduct.”
— ISCR Case No. 08-06567 at 3 (App. Bd. Oct 29, 2009)

Procedural Posture

SOR issuedSep 15, 2011
Answer filed—
Hearing heldFeb 22, 2012
Decision dateApr 30, 2012

Cite For

Mitigating Conditions Under Guideline F for Financial Considerations
Good-faith Efforts to Resolve Debts
Impact of Personal Circumstances on Financial Stability

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	In November 2009 one of Applicant’s creditors, secured a $15,000 judgment against him for a personal loan he had taken to help expand his wife’s then growing real estate business $15,000	For Applicant	Personal Loan Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	Applicant lost his home to foreclosure in January 2009. The house was sold at a foreclosure sale, leaving a $16,237 deficiency balance on the mortgage $16,237	For Applicant	Mortgage or Home Loan Debt	Unknown	—	—	—
1.c–1.f	4 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—
1.g	In April 2010, his car was repossessed leaving a $7,118 deficiency balance on the loan $7,118	For Applicant	Auto Loan Debt	Unknown	—	—	Claimed Payment Plan with Creditor
1.h–1.i	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—
1.j	he neglected to establish an escrow account for his property taxes. As a result, he did not pay property taxes for 2007 and 2008. He learned of his error in April 2008 when the state garnished his wages for $3,500 to recover the outstanding tax liability $3,500	For Applicant	Tax Unpaid	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

In November 2009 one of Applicant’s creditors, secured a $15,000 judgment against him for a personal loan he had taken to help expand his wife’s then growing real estate business

$15,000

For Applicant

Personal Loan Debt

Admitted

—

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

Documented

Debt Paid in Full

1.b

Applicant lost his home to foreclosure in January 2009. The house was sold at a foreclosure sale, leaving a $16,237 deficiency balance on the mortgage

$16,237

For Applicant

Mortgage or Home Loan Debt

Unknown

—

1.c–1.f

4 sub-charges — specific text not stated in this decision (for the applicant).

For Applicant

—

1.g

In April 2010, his car was repossessed leaving a $7,118 deficiency balance on the loan

$7,118

For Applicant

Auto Loan Debt

Unknown

—

Claimed

Payment Plan with Creditor

1.h–1.i

2 sub-charges — specific text not stated in this decision (for the applicant).

For Applicant

—

1.j

he neglected to establish an escrow account for his property taxes. As a result, he did not pay property taxes for 2007 and 2008. He learned of his error in April 2008 when the state garnished his wages for $3,500 to recover the outstanding tax liability

$3,500

For Applicant

Tax Unpaid

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

FORMAL FINDINGS

CONCLUSION

FOOTNOTES