ISCR Case 11-11953.h1

Case Headnote

ISCR Case No. 11-11953.h1

deniedAug 27, 2012· Hon. James F. Duffy· hearing

Summary

A 39-year-old electronics technician with prior security clearances was denied a security clearance due to significant unresolved financial debts totaling approximately $105,568, falling under Guideline F (Financial Considerations). The applicant's financial issues were attributed to a divorce and Hurricane Katrina. However, the judge determined that the applicant failed to demonstrate responsible actions to mitigate these debts.

The Statement of Reasons detailed ten specific allegations, including a $369 medical debt judgment from 2006 that remains unpaid, and a $6,062 collection account the applicant denied as a duplicate of a foreclosed mortgage. Other debts included a joint cell phone account for $808, a $432 car insurance account, and a $3,115 credit card debt from an out-of-state training trip, all of which the applicant admitted but had not resolved. The largest debt was a $93,329 collection account for a foreclosed mortgage on a home purchased after Hurricane Katrina, for which the applicant had not contacted the mortgage holder regarding a potential deficiency. Additional medical debts and a disputed collection account for $605 were also cited.

Despite the acknowledged origins of some debts in his divorce and Hurricane Katrina, the applicant failed to provide sufficient evidence of mitigation. He had not sought financial counseling or taken concrete steps to resolve his delinquent debts, leaving his financial situation unstable and without a realistic plan for resolution. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant failed to provide sufficient evidence to mitigate the alleged debts.
He has not received financial counseling or taken steps to resolve his delinquent debts.
The applicant's financial situation remains unstable and lacks a realistic plan for resolution.

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 act responsibly under the circumstances.
AG ¶ 20(c)rejectedThe Person Has Received or Is Receiving Counseling for the ProblemThe applicant has not received any financial counseling.
AG ¶ 20(d)rejectedThe Individual Initiated a Good-faith Effort to Repay Overdue CreditorsThe applicant has not taken any steps to resolve the alleged debts.
AG ¶ 20(e)notedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past Due Debt

Key Rule Quoted

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

Procedural Posture

SOR issuedundated
Answer filedFeb 21, 2012
Hearing heldJun 6, 2012
Decision dateAug 27, 2012

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Impact of Personal Circumstances on Financial Obligations
Requirements for Demonstrating Responsible Financial Behavior

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	judgment for $369. This was a medical debt. The judgment was filed in February 2006. In his Answer, Applicant indicated that his ex-wife was responsible for half of this debt under their divorce decree. This debt remains unpaid. $369	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	collection account for $6,062. In his Answer, Applicant denied this debt. He indicated that it was the past-due amount of the foreclosed mortgage in SOR ¶ 1.f, and was a duplicate of that debt. $6,062	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(e) reasonable, documented basis to dispute the debt	—
1.c	collection account for $808. This is a joint account that Applicant had with his ex-wife. It was her cell phone account. He admitted this debt. He stated that it became delinquent when she refused to pay her half, and he could not afford to pay it along with his other bills and expenses. He indicated that he has not taken any steps to settle or resolve this debt in the past five years. $808	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	collection account for $432. This is a car insurance account that was placed for collection in June 2007. Applicant admitted this debt and indicated that his ex-wife was ordered to pay this debt in their divorce decree. He also stated that he has taken no steps to resolve it. $432	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	collection account for $3,115. From July to October 2003, Applicant and two coworkers attended an out-of-state training course. He used his credit card to rent a car for the three of them. They used the vehicle separately on the weekends and exceeded the mileage the company was willing to reimburse. Applicant was responsible for this unreimbursed expense and did not seek reimbursement from the other two employees. Before departing for this trip, Applicant made arrangements for his wife to pay the household expenses. As noted above, he learned upon his return that she did not make the mortgage payments for three months. $3,115	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	collection account for $93,329. This account was the mortgage on the home that Applicant and his ex-wife purchased after Hurricane Katrina. They purchased the home for $105,000 with an $18,000 down payment. Their monthly mortgage payments were about $880. As part of his March 2007 divorce, Applicant was given exclusive use and possession of this home. He was also responsible for all mortgage payments, taxes, insurance, and other expenses related to the home. The date of last activity on this loan was June 2009. At a foreclosure sale in January 2010, the mortgage holder purchased the home for $45,451. Applicant has not contacted the mortgage holder to determine whether there is a deficiency on the mortgage loan. $93,329	Against Applicant	Mortgage or Home Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	collection account for $194. This was a medical debt that was placed for collection in February 2006. In his Answer, Applicant indicated that his wife is responsible for half of this debt. He testified that he has not done anything regarding this debt. $194	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	collection account for $605. Applicant denied this debt and claimed he had no knowledge of it. He testified that he has not contacted the collection agency to determine the original creditor. His credit report, however, indicated that payments were made under a partial payment agreement. $605	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	collection account for $331. This debt was a medical bill that was placed for collection in April 2010. In his Answer, Applicant denied this debt. $331	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	collection account for $323. This debt was a medical bill that was placed for collection in April 2010. In his Answer, Applicant admitted this debt and indicated that his wife was responsible for half of it. He has made no payments on this debt. $323	Against Applicant	Medical Debt	Admitted	(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

judgment for $369. This was a medical debt. The judgment was filed in February 2006. In his Answer, Applicant indicated that his ex-wife was responsible for half of this debt under their divorce decree. This debt remains unpaid.

$369

Against Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

collection account for $6,062. In his Answer, Applicant denied this debt. He indicated that it was the past-due amount of the foreclosed mortgage in SOR ¶ 1.f, and was a duplicate of that debt.

$6,062

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(e) reasonable, documented basis to dispute the debt

—

1.c

collection account for $808. This is a joint account that Applicant had with his ex-wife. It was her cell phone account. He admitted this debt. He stated that it became delinquent when she refused to pay her half, and he could not afford to pay it along with his other bills and expenses. He indicated that he has not taken any steps to settle or resolve this debt in the past five years.

$808

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

collection account for $432. This is a car insurance account that was placed for collection in June 2007. Applicant admitted this debt and indicated that his ex-wife was ordered to pay this debt in their divorce decree. He also stated that he has taken no steps to resolve it.

$432

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

collection account for $3,115. From July to October 2003, Applicant and two coworkers attended an out-of-state training course. He used his credit card to rent a car for the three of them. They used the vehicle separately on the weekends and exceeded the mileage the company was willing to reimburse. Applicant was responsible for this unreimbursed expense and did not seek reimbursement from the other two employees. Before departing for this trip, Applicant made arrangements for his wife to pay the household expenses. As noted above, he learned upon his return that she did not make the mortgage payments for three months.

$3,115

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

collection account for $93,329. This account was the mortgage on the home that Applicant and his ex-wife purchased after Hurricane Katrina. They purchased the home for $105,000 with an $18,000 down payment. Their monthly mortgage payments were about $880. As part of his March 2007 divorce, Applicant was given exclusive use and possession of this home. He was also responsible for all mortgage payments, taxes, insurance, and other expenses related to the home. The date of last activity on this loan was June 2009. At a foreclosure sale in January 2010, the mortgage holder purchased the home for $45,451. Applicant has not contacted the mortgage holder to determine whether there is a deficiency on the mortgage loan.

$93,329

Against Applicant

Mortgage or Home Loan Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

collection account for $194. This was a medical debt that was placed for collection in February 2006. In his Answer, Applicant indicated that his wife is responsible for half of this debt. He testified that he has not done anything regarding this debt.

$194

Against Applicant

Medical Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

collection account for $605. Applicant denied this debt and claimed he had no knowledge of it. He testified that he has not contacted the collection agency to determine the original creditor. His credit report, however, indicated that payments were made under a partial payment agreement.

$605

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

collection account for $331. This debt was a medical bill that was placed for collection in April 2010. In his Answer, Applicant denied this debt.

$331

Against Applicant

Medical Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.j

collection account for $323. This debt was a medical bill that was placed for collection in April 2010. In his Answer, Applicant admitted this debt and indicated that his wife was responsible for half of it. He has made no payments on this debt.

$323

Against Applicant

Medical Debt

Admitted

(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

FOOTNOTES