Summary
A 65-year-old single male employed by a defense contractor was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from significant and unresolved financial issues, including a long-standing delinquent credit card debt and a history of bankruptcy.
Specifically, the applicant admitted to an approximately $17,000 credit card debt delinquent since 2008. He also acknowledged a $324,000 first mortgage and a $150,000 second mortgage on a rental property, which was foreclosed upon and sold in 2010. The second mortgage debt was forgiven, resulting in a Form 1099 in September 2011.
Further, the applicant filed for Chapter 13 bankruptcy on May 21, 2010, after receiving credit counseling. However, his case was dismissed on July 9, 2010, due to his failure to appear at a mandatory creditors' meeting. This dismissal barred him from refiling for 180 days. The judge found that the applicant's financial difficulties were not resolved, raising concerns about his reliability and trustworthiness.
Why the Applicant Was Denied
- The applicant admitted to being financially overextended with a delinquent credit card debt of approximately $17,000 since 2008.
- The applicant's bankruptcy filing was dismissed due to his failure to appear at a creditors' meeting, indicating a lack of responsibility in managing his financial obligations.
- The applicant's financial problems have persisted for several years without effective resolution, raising questions about his reliability and judgment.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to RecurThe applicant's financial difficulties have been ongoing since at least 2008.
- AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlWhile the applicant's issues began with a bad renter, he made poor financial choices and misused bankruptcy.
- AG ¶ 20(d)rejectedInitiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant has not made any good faith efforts to resolve the delinquent credit card debt.
Key Rule Quoted
“Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information.”
Procedural Posture
- SOR issuedMar 18, 2013
- Answer filedApr 15, 2013
- Hearing heldSep 10, 2013
- Decision dateDec 12, 2013
Cite For
- Financial Overextension as a Disqualifying Condition Under Guideline F
- Impact of Unresolved Financial Issues on Security Clearance Eligibility
- Importance of Honesty in Security Clearance Applications Regarding Bankruptcy Filings