ISCR Case 11-10329.h1

Case Headnote

ISCR Case No. 11-10329.h1

grantedJan 2, 2013· Hon. Philip S. Howe· hearing

Summary

A 45-year-old female applicant, the sole provider for her family, was granted eligibility for a public trust position despite initial concerns under Guideline F (Financial Considerations). These concerns arose from a history of financial difficulties, primarily linked to her husband's long-term unemployment and medical issues.

The applicant's financial history included multiple bankruptcy filings to resolve debts totaling $16,043. Specifically, she filed Chapter 7 bankruptcies in 2001 and 2002, both of which were dismissed. A subsequent Chapter 13 filing in 2002, intended to address her husband's $52,000 business tax debt and prevent IRS liens, was discharged in 2005 after she made $600 monthly payments. Another Chapter 13 bankruptcy in 2009 was dismissed in 2010 due to an inability to maintain payments. Her most recent filing was a Chapter 7 petition on August 17, 2012, which resulted in a discharge on November 21, 2012.

The judge determined that the applicant had successfully mitigated the financial concerns. This decision was based on her demonstration of responsible actions in resolving debts through bankruptcy, the fact that her financial issues stemmed from circumstances beyond her control, and her subsequent avoidance of new long-term debt, simplifying her financial situation. The judge concluded that her financial issues were unlikely to recur, leading to the granting of her security clearance.

Why the Applicant Prevailed

The applicant resolved her debts through bankruptcy filings, demonstrating responsible financial management.
The financial difficulties were largely due to circumstances beyond her control, including her husband's medical issues and unemployment.
The applicant has not incurred new long-term debt and has simplified her financial situation.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations

Mitigating

F.20.aappliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
F.20.bappliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
F.20.cappliedThe Person Has Received or Is Receiving Counseling for the Problem And/or There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
F.20.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedJul 27, 2012
Answer filedAug 17, 2012
Hearing heldNov 21, 2012
Decision dateJan 2, 2013

Cite For

Mitigation of Financial Issues Under Guideline F Due to Circumstances Beyond Control
Successful Resolution of Debts Through Bankruptcy
Consideration of the Whole-person Concept in Financial Evaluations

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 filed a Chapter 7 bankruptcy in 2001. It was dismissed in January 2002. She filed another Chapter 7 bankruptcy later in 2002 and it was also dismissed. Then Applicant filed a Chapter 13 bankruptcy in 2002. She paid $600 monthly to the bankruptcy trustee to pay her debts. The bankruptcy was discharged in 2005. These bankruptcies were filed to resolve her husband’s business debts from his closed business. Applicant’s bankruptcy attorneys handled this series of petitions in bankruptcy court. At that time Applicant’s husband had $52,000 in business tax debt. The bankruptcy filings prevented the Internal Revenue Service (IRS) from filing tax liens on Applicant’s real estate. Applicant again filed Chapter 13 bankruptcy in 2009. It was dismissed in 2010 when Applicant could not continue to make the $600 monthly payments. Applicant’s most recent bankruptcy is a Chapter 7 petition filed on August 17, 2012. She was discharged in bankruptcy on November 21, 2012.	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Financial Counseling Claimed Other

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed a Chapter 7 bankruptcy in 2001. It was dismissed in January 2002. She filed another Chapter 7 bankruptcy later in 2002 and it was also dismissed. Then Applicant filed a Chapter 13 bankruptcy in 2002. She paid $600 monthly to the bankruptcy trustee to pay her debts. The bankruptcy was discharged in 2005. These bankruptcies were filed to resolve her husband’s business debts from his closed business. Applicant’s bankruptcy attorneys handled this series of petitions in bankruptcy court. At that time Applicant’s husband had $52,000 in business tax debt. The bankruptcy filings prevented the Internal Revenue Service (IRS) from filing tax liens on Applicant’s real estate. Applicant again filed Chapter 13 bankruptcy in 2009. It was dismissed in 2010 when Applicant could not continue to make the $600 monthly payments. Applicant’s most recent bankruptcy is a Chapter 7 petition filed on August 17, 2012. She was discharged in bankruptcy on November 21, 2012.

For Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(a) behavior happened long ago / infrequent / unlikely to recur

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

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

Documented

Financial Counseling

Claimed

Other

Loading case…

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

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION