ISCR Case 11-10405.h1

Case Headnote

ISCR Case No. 11-10405.h1

deniedJul 29, 2013· Hon. James F. Duffy· hearing

Summary

A 52-year-old executive assistant was denied a security clearance under Guideline F (Financial Considerations) due to unresolved delinquent debts totaling over $52,000 and a recent Chapter 13 bankruptcy filing. The applicant had a history of financial difficulties, including a Chapter 7 bankruptcy discharge in December 2008.

The Statement of Reasons detailed numerous debts, including personal loans, medical debts, credit card accounts, and vehicle loans, with dates of first delinquency ranging from February 2008 to August 2012. Specific allegations included a personal loan from April 2009 with a judgment filed in November 2010, multiple medical debts, and several vehicle repossessions. While the applicant testified to some debts being satisfied or having payment arrangements, and some were listed as discharged in bankruptcy, many remained unresolved.

The denial was based on the applicant's failure to demonstrate that her financial problems were unlikely to recur or were under control. The judge noted that financial issues persisted for at least six years and that the applicant continued to open and default on debts even after securing her current employment, raising significant concerns about her reliability and trustworthiness.

Why the Applicant Was Denied

The applicant failed to demonstrate that her financial problems were unlikely to recur or under control.
The applicant continued to open and default on debts after obtaining her current job, indicating poor financial management.
The applicant's financial issues have persisted for at least six years, casting doubt on her reliability and trustworthiness.

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(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“A security clearance adjudication is not a debt collection procedure. It is a procedure designed to evaluate an applicant’s judgment, reliability, and trustworthiness.”

Procedural Posture

SOR issuedJan 15, 2013
Answer filedMar 19, 2013
Hearing heldJun 6, 2013via video teleconference
Decision dateJul 29, 2013

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Impact of Ongoing Financial Issues on Security Clearance Eligibility
Consideration of Bankruptcy Filings 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	This account was a personal loan that Applicant acquired in April 2009 to purchase furniture. The judgment was filed in November 2010. $3,000	Against Applicant	Personal Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	This was a medical debt that was placed for collection in September 2009. Applicant testified that she thought that this was a telephone service account. $252	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	This was a medical debt account that was placed for collection in October 2012. Applicant testified that she had an arrangement with the creditor to pay $10 per month beginning July 4, 2013. $65	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	This account was opened in March 2009 and had a date of first delinquency/date of last activity of April 2010. Applicant denied this debt, but listed it in her security clearance application. $459	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	This was a credit card account that was opened in June 2012 and had a date of first delinquency/date of last activity of July 2012. Applicant testified that she entered into a settlement agreement with this creditor in May 2013. $847	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	This debt is a duplicate of SOR ¶ 1.a. $3,031	For Applicant	Unspecified Financial	Unknown	—	—	—
1.g	This account was opened in May 2012 and had a date of first delinquency/date of last activity of August 2012. She entered into a settlement agreement to make five payments of $145. $1,488	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	This was a vehicle loan that was opened in March 2009 and had a date of first delinquency/date of last activity of April 2010. Applicant thought this vehicle was repossessed in June 2010. $9,591	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	This was a vehicle loan that was opened in February 2011 and had a date of first delinquency/date of last activity of February 2012. Applicant indicated this vehicle was repossessed in March 2012. $9,329	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	This debt is a duplicate of SOR ¶ 1.a. $3,052	For Applicant	Unspecified Financial	Unknown	—	—	—
1.k	This account was opened in June 2009 and had a date of first delinquency/date of last activity of August 2009. Applicant testified that this debt was satisfied. $455	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.l	This was a vehicle loan that was opened in March 2009 and had a date of first delinquency/date of last activity of June 2009. This vehicle was repossessed. $8,533	For Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.m	This was a credit card account that was placed for collection in April 2009. Applicant testified that this debt was satisfied in May 2013. $701	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.n	This was a vehicle loan that was opened in December 2007 and had a date of first delinquency/date of last activity of February 2008. Applicant thought this debt was discharged in her bankruptcy. $10,453	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.o	This loan was opened in June 2008 and had a date of first delinquency/date of last activity of September 2009. In her Answer to the SOR, Applicant indicated this debt was discharged in her bankruptcy. $1,111	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.p	Applicant received a Chapter 7 bankruptcy discharge in December 2008.	For Applicant	Bankruptcy Filing	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

This account was a personal loan that Applicant acquired in April 2009 to purchase furniture. The judgment was filed in November 2010.

$3,000

Against Applicant

Personal Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

This was a medical debt that was placed for collection in September 2009. Applicant testified that she thought that this was a telephone service account.

$252

Against Applicant

Medical Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

This was a medical debt account that was placed for collection in October 2012. Applicant testified that she had an arrangement with the creditor to pay $10 per month beginning July 4, 2013.

$65

Against Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

This account was opened in March 2009 and had a date of first delinquency/date of last activity of April 2010. Applicant denied this debt, but listed it in her security clearance application.

$459

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

This was a credit card account that was opened in June 2012 and had a date of first delinquency/date of last activity of July 2012. Applicant testified that she entered into a settlement agreement with this creditor in May 2013.

$847

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

This debt is a duplicate of SOR ¶ 1.a.

$3,031

For Applicant

Unspecified Financial

Unknown

—

1.g

This account was opened in May 2012 and had a date of first delinquency/date of last activity of August 2012. She entered into a settlement agreement to make five payments of $145.

$1,488

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

This was a vehicle loan that was opened in March 2009 and had a date of first delinquency/date of last activity of April 2010. Applicant thought this vehicle was repossessed in June 2010.

$9,591

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

This was a vehicle loan that was opened in February 2011 and had a date of first delinquency/date of last activity of February 2012. Applicant indicated this vehicle was repossessed in March 2012.

$9,329

Against Applicant

Auto Loan Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.j

This debt is a duplicate of SOR ¶ 1.a.

$3,052

For Applicant

Unspecified Financial

Unknown

—

1.k

This account was opened in June 2009 and had a date of first delinquency/date of last activity of August 2009. Applicant testified that this debt was satisfied.

$455

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.l

This was a vehicle loan that was opened in March 2009 and had a date of first delinquency/date of last activity of June 2009. This vehicle was repossessed.

$8,533

For Applicant

Auto Loan Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.m

This was a credit card account that was placed for collection in April 2009. Applicant testified that this debt was satisfied in May 2013.

$701

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.n

This was a vehicle loan that was opened in December 2007 and had a date of first delinquency/date of last activity of February 2008. Applicant thought this debt was discharged in her bankruptcy.

$10,453

Against Applicant

Auto Loan Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.o

This loan was opened in June 2008 and had a date of first delinquency/date of last activity of September 2009. In her Answer to the SOR, Applicant indicated this debt was discharged in her bankruptcy.

$1,111

Against Applicant

Auto Loan Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.p

Applicant received a Chapter 7 bankruptcy discharge in December 2008.

For Applicant

Bankruptcy Filing

Admitted

—

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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

DECISION

FOOTNOTES