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Summary

The applicant, a 40-year-old systems engineer, faced security concerns under Guideline F due to financial difficulties stemming from tax issues and garnishments. He demonstrated significant progress in managing his debts and mitigating the concerns, leading to a granted security clearance.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Charge account, $3,657; 1.j, $3,281 – UNRESOLVED (duplicate). This retail store account was handled by Creditor B (allegation 1.j). Creditor B sold it to Collection Agency C, which obtained a judgment in the amount of $3,657 in 2010 (allegation 1.a). Applicant testified that he paid the debt, but could not locate supporting documentation. He tried to reach Collection Agency C to obtain a receipt, but it is no longer in business (1.a). $392 – PAID. Applicant opened this credit union account in 2005. It first became delinquent in 2009, and the original creditor charged it off. Applicant paid the successor creditor in October 2012. His credit report of March 2013 confirms that the balance is zero (1.b). $340; 1.g, $345 – UNRESOLVED. The $340 medical debt alleged at subparagraph 1.c was for Applicant's daughter’s care, and the one at subparagraph 1.g was for his own medical care. He did not realize that his medical insurance did not pay all of the associated costs. Applicant testified that he paid both bills, but does not have documentation. His June 2011 credit report shows a judgment obtained in June 2007 by a medical company for $345, but the disposition is “Unknown.” Applicant's August 2012 credit report shows a $340 medical debt as unpaid. His March 2013 credit report shows a medical debt of $343 is unpaid (1.c). Cable, $370 – PAID. Applicant testified that he paid this cable bill. His March 2013 credit report confirms that it was paid as of October 2012 (1.d). $13,684 – DISPUTES. Applicant rented an apartment in 2010. He moved before his lease ended. He believes he owes two month’s rent, or about $4,000; the company is demanding about six month’s rent. He orally disputed the amount with the rental company staff, and with the successor creditor. He is awaiting verification of the amount before making payments. He did not know how to dispute inaccurate entries on his credit report. After learning how to do so within the past few months, he registered his dispute online, but he has not written a formal letter of dispute. His March 2013 credit report shows that he disputes the account (1.e). $4,548; 1.m, $3,138 – PAYMENT PLAN (duplicate). Applicant opened a retail charge account in 2006 (allegation 1.m). The account was handled by the same Creditor B as in allegation 1.j, above. The debt was sold to Collection Agency D. As of August 2012, the balance had increased to $4,548 (allegation 1.f). The debt is now being handled by Law Firm E. Although Applicant believes he already paid the debt, he is paying $200 monthly in order to resolve it. He provided documentation showing he paid $1,200 between October 2012 and March 2013. Law Firm E has not yet updated the credit report to reflect the payments (1.f). $345 – UNRESOLVED. The $340 medical debt alleged at subparagraph 1.c was for Applicant's daughter’s care, and the one at subparagraph 1.g was for his own medical care. He did not realize that his medical insurance did not pay all of the associated costs. Applicant testified that he paid both bills, but does not have documentation. His June 2011 credit report shows a judgment obtained in June 2007 by a medical company for $345, but the disposition is “Unknown.” Applicant's August 2012 credit report shows a $340 medical debt as unpaid. His March 2013 credit report shows a medical debt of $343 is unpaid (1.g). Gas/electricity, $520 – PAID. Applicant testified that he paid this bill. His March 2013 credit report confirms that, as of June 2012, the balance was zero (1.h). $95 – PAID. Applicant's credit reports show that this medical account became delinquent between 2008 and 2009. He testified that it is paid. Both his August 2012 and March 2013 credit reports confirm that the balance is zero (1.i). $3,281 – UNRESOLVED (duplicate). This retail store account was handled by Creditor B (allegation 1.j). Creditor B sold it to Collection Agency C, which obtained a judgment in the amount of $3,657 in 2010 (allegation 1.a). Applicant testified that he paid the debt, but could not locate supporting documentation. He tried to reach Collection Agency C to obtain a receipt, but it is no longer in business (1.j). $206; 1.l, $76 – UNRESOLVED. Both of these medical debts became delinquent in 2010. Applicant testified that he has paid them, but did not have supporting documentation. After the hearing, he contacted the bank but could not obtain documents showing the payments, because the bank account is closed. Neither debt appears in his August 2012 or March 2013 credit reports (1.k). $76 – UNRESOLVED. Both of these medical debts became delinquent in 2010. Applicant testified that he has paid them, but did not have supporting documentation. After the hearing, he contacted the bank but could not obtain documents showing the payments, because the bank account is closed. Neither debt appears in his August 2012 or March 2013 credit reports (1.l). $3,138 – PAYMENT PLAN (duplicate). Applicant opened a retail charge account in 2006 (allegation 1.m). The account was handled by the same Creditor B as in allegation 1.j, above. The debt was sold to Collection Agency D. As of August 2012, the balance had increased to $4,548 (allegation 1.f). The debt is now being handled by Law Firm E. Although Applicant believes he already paid the debt, he is paying $200 monthly in order to resolve it. He provided documentation showing he paid $1,200 between October 2012 and March 2013. Law Firm E has not yet updated the credit report to reflect the payments (1.m).

The judge granted the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d), AG ¶ 20(e). The decision turned on the following: The applicant has made substantial progress in resolving his financial issues, including paying off several debts and establishing a payment plan for others; He has a credible plan to address remaining debts and has shown responsible financial behavior since the issuance of the SOR; The applicant's financial problems were largely due to circumstances beyond his control, such as garnishments and reliance on an inept tax preparer.

Why the Applicant Prevailed

• The applicant has made substantial progress in resolving his financial issues, including paying off several debts and establishing a payment plan for others.
• He has a credible plan to address remaining debts and has shown responsible financial behavior since the issuance of the SOR.
• The applicant's financial problems were largely due to circumstances beyond his control, such as garnishments and reliance on an inept tax preparer.

Conditions Referenced

Key Rule Quoted

“A security clearance decision is issued only to resolve the question of whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information.”

Procedural Posture

• SOR issuedNov 16, 2012
• Answer filedDec 5, 2012
• Hearing heldMar 7, 2013Record held open for additional documentation.
• Decision dateMar 14, 2013

Cite For

• Mitigation of Financial Issues Under Guideline F
• Good-faith Efforts to Resolve Debts
• Impact of Circumstances Beyond Control on Financial Obligations