ISCR Case 12-04369.h1

Case Headnote

ISCR Case No. 12-04369.h1

grantedFeb 7, 2014· Hon. Rita C. O'Brien· hearing

Summary

A 53-year-old male applicant was granted a security clearance despite initial concerns under Guideline F (Financial Considerations) regarding over $41,000 in delinquent debts. The Statement of Reasons detailed fifteen allegations, including various medical, utility, credit card, and loan debts.

The applicant successfully addressed most of these allegations. He provided evidence of payment for several debts, including two medical bills, a utility bill, an unknown collection account, and two cable accounts. He also established payment plans for a medical debt and a student loan, and disputed a rent debt and a remaining credit card balance. One cable account allegation was found to be a duplicate of a medical debt. An auto loan from 2001, for which the vehicle was surrendered in 2006, was considered resolved as no deficiency balance was pursued. Two other unknown debts were also resolved or no longer appeared on credit reports. One cable debt remained unresolved due to a lack of supporting documentation for the claimed payment.

Ultimately, the judge found that the applicant had made significant efforts over three years to mitigate his financial concerns by reducing his debts and demonstrating responsible financial behavior. His financial situation was deemed under control with sufficient income, leading to the granting of his security clearance.

Why the Applicant Prevailed

The applicant demonstrated significant efforts to reduce his delinquent debts over the past three years.
He provided evidence of payments made and established payment plans for several debts.
The applicant's financial situation was deemed under control, with sufficient income to manage obligations.

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(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to Recur
AG ¶ 20(b)appliedConditions Resulting in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived or Is Receiving Counseling for the Problem or Evidence of Resolution
AG ¶ 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)appliedReasonable Basis to Dispute the Legitimacy of Past-due Debt

Key Rule Quoted

“A security clearance decision is intended only to resolve whether it is clearly consistent with the national interest for an applicant to either receive or continue to have access to classified information.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedJul 11, 2013
Answer filedAug 6, 2013Notarized response submitted.
Hearing held—Decision based on written record.
Decision dateFeb 7, 2014

Cite For

Mitigation of Financial Concerns Under Guideline F
Significant Efforts to Resolve Delinquent Debts
Whole-person Concept in Security Clearance Determinations

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	Rent, $5,291. Disputed. Applicant paid his rent for 9 months of his 12-month lease. He then provided notice to the landlord regarding his upcoming military transfer. He disputes owing this past-due rent. He filed a dispute with a credit agency, which is documented in his July and November 2013 credit reports. $5,291	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.b	Medical, $156. Paid. Applicant provided evidence of a payment in May 2013, and states in his Response that the debt is paid. His 2013 credit report shows the account is “Paid” and the balance owed is zero. $156	For Applicant	Medical Debt	Admitted	—	—	Documented Debt Paid in Full
1.c	Medical, $1,152. Payment plan. Applicant stated at his 2012 security interview that he did not recognize this account. However, in his Answer he listed the status as “Pending (resolving dispute).” He provided proof of a June 2013 payment of $155, and stated he has a payment plan. His November 2013 credit report shows the balance has been reduced to $997. $1,152	For Applicant	Medical Debt	Denied with Explanation	—	—	Claimed Payment Plan with Creditor
1.d	Medical, $117. Paid. Applicant paid the debt in full and provided evidence of a May 2013 deduction from his bank account of $121. $117	For Applicant	Medical Debt	Admitted	—	—	Documented Debt Paid in Full
1.e	Credit card, $1,043. Disputed. Applicant stated in his Answer that the original balance was $3,500, and he paid $2,457. His 2011 credit report confirms the balance was reduced by $2,457. The creditor charged off the $1,043 remainder. His November 2013 credit report indicates he is disputing the remaining $1,043, though Applicant's reason is unclear from the record. $1,043	For Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.f	Utility, $118. Paid. Applicant provided documentation from the creditor dated June 2013, showing he paid the debt in full and the balance is zero. His November 2013 credit report also shows the debt is paid. $118	For Applicant	Utility or Phone Debt	Admitted	—	—	Documented Debt Paid in Full
1.g	Unknown type, $754. Paid. Applicant’s 2011 credit report shows that this account was transferred to a collection agency. He provided confirmation from the collection agency that he paid $345.90 on May 7, 2013, which settled the account. His January 2014 credit report shows a zero balance. $754	For Applicant	Unspecified Financial	Admitted	—	—	Documented Debt Paid in Full
1.h	Cable account, $1,152. Duplicate. The SOR lists a cable debt of $1,152, the same amount as the medical debt alleged at SOR ¶ 1.c. Applicant's 2011 credit report shows that the same collection agency owned a medical debt ($96) and a cable debt for Applicant. His other credit reports show that this debt is a past-due medical debt of $1,152. The SOR conflates the two debts; allegation 1.h is a duplicate of allegation 1.c. I find for the Applicant on allegation 1.h. $1,152	For Applicant	Unspecified Financial	Unknown	—	—	—
1.i	Cable account, $88. Paid. At his security interview in 2012, Applicant stated he did not recognize this cable debt. After completing his interrogatory response, and prior to the issuance of the SOR, Applicant provided a chart of his debt payments, in which he referred to a bank statement showing he paid $97 to this creditor. The bank statement is not included in the record. However, the debt does not appear on Applicant's April 2013 credit report. $88	For Applicant	Utility or Phone Debt	Denied with Explanation	—	—	Claimed Debt Paid in Full
1.j	Unknown type, $634. Paid. Applicant's 2011 credit report describes the debt as “unknown loan type” and shows that the balance of $634 was charged off in 2008. When interviewed in 2012, Applicant did not recognize the debt. In his Answer, Applicant stated it was paid. The debt does not appear on his April 2013 credit report. $634	For Applicant	Unspecified Financial	Admitted	—	—	Documented Debt Paid in Full
1.k	Student loan, $5,282. Payment plan. Applicant’s student loans were deferred while he was in the Navy. This student loan was in collection status in 2011. He provided documentation showing that in February 2013, he entered a loan rehabilitation program, with a monthly payment plan of $50. His submission to the DOD CAF in June 2013 stated the account was current. Applicant's January 2014 credit report shows a balance of $3,287. $5,282	For Applicant	Student Loan Debt	Unknown	—	—	Documented Payment Plan with Creditor
1.l	Auto loan, $24,955. Paid. The alleged amount is the original loan balance when Applicant purchased a car in 2001. He made timely payments for several years. When his first wife lost her job in about 2006, the account became delinquent. He contacted the lender and was advised to surrender the vehicle, which he did. He stated in his security interview that it was sold at auction. He believed the car’s value at the time was $5,600, and listed this delinquent amount in his 2011 security clearance application. He has not been contacted by the creditor about a deficiency balance since he surrendered the car in October 2006. In his 2014 Response, he stated the debt is paid. It does not appear on his April or November 2013 credit reports. $24,955	For Applicant	Auto Loan Debt	Admitted	—	—	Documented Debt Paid in Full
1.m	Medical, $107. Paid. Applicant stated in his security interview that he did not recognize the debt. In his Answer to the SOR, he provided a copy of a check showing a payment of $107 to the medical creditor, dated August 1, 2013. Although he cites the cancelled version of the check in his Response, he did not enclose the cancelled check. $107	For Applicant	Medical Debt	Unknown	—	—	Claimed Debt Paid in Full
1.n	Cable account, $293. Unresolved. In his June 2013 submission to the DOD CAF, and in his January 2014 Response, Applicant stated he paid the debt on June 14, 2013. However, the record contains no supporting documentation. $293	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.o	Unknown type, $126. Resolved. Applicant stated in his 2012 security interview that he did not recognize this debt, which was listed as on his 2011 credit report as in collection status. However, it does not appear on his July or November 2013 credit reports. $126	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Rent, $5,291. Disputed. Applicant paid his rent for 9 months of his 12-month lease. He then provided notice to the landlord regarding his upcoming military transfer. He disputes owing this past-due rent. He filed a dispute with a credit agency, which is documented in his July and November 2013 credit reports.

$5,291

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.b

Medical, $156. Paid. Applicant provided evidence of a payment in May 2013, and states in his Response that the debt is paid. His 2013 credit report shows the account is “Paid” and the balance owed is zero.

$156

For Applicant

Medical Debt

Admitted

—

Documented

Debt Paid in Full

1.c

Medical, $1,152. Payment plan. Applicant stated at his 2012 security interview that he did not recognize this account. However, in his Answer he listed the status as “Pending (resolving dispute).” He provided proof of a June 2013 payment of $155, and stated he has a payment plan. His November 2013 credit report shows the balance has been reduced to $997.

$1,152

For Applicant

Medical Debt

Denied with Explanation

—

Claimed

Payment Plan with Creditor

1.d

Medical, $117. Paid. Applicant paid the debt in full and provided evidence of a May 2013 deduction from his bank account of $121.

$117

For Applicant

Medical Debt

Admitted

—

Documented

Debt Paid in Full

1.e

Credit card, $1,043. Disputed. Applicant stated in his Answer that the original balance was $3,500, and he paid $2,457. His 2011 credit report confirms the balance was reduced by $2,457. The creditor charged off the $1,043 remainder. His November 2013 credit report indicates he is disputing the remaining $1,043, though Applicant's reason is unclear from the record.

$1,043

For Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.f

Utility, $118. Paid. Applicant provided documentation from the creditor dated June 2013, showing he paid the debt in full and the balance is zero. His November 2013 credit report also shows the debt is paid.

$118

For Applicant

Utility or Phone Debt

Admitted

—

Documented

Debt Paid in Full

1.g

Unknown type, $754. Paid. Applicant’s 2011 credit report shows that this account was transferred to a collection agency. He provided confirmation from the collection agency that he paid $345.90 on May 7, 2013, which settled the account. His January 2014 credit report shows a zero balance.

$754

For Applicant

Unspecified Financial

Admitted

—

Documented

Debt Paid in Full

1.h

Cable account, $1,152. Duplicate. The SOR lists a cable debt of $1,152, the same amount as the medical debt alleged at SOR ¶ 1.c. Applicant's 2011 credit report shows that the same collection agency owned a medical debt ($96) and a cable debt for Applicant. His other credit reports show that this debt is a past-due medical debt of $1,152. The SOR conflates the two debts; allegation 1.h is a duplicate of allegation 1.c. I find for the Applicant on allegation 1.h.

$1,152

For Applicant

Unspecified Financial

Unknown

—

1.i

Cable account, $88. Paid. At his security interview in 2012, Applicant stated he did not recognize this cable debt. After completing his interrogatory response, and prior to the issuance of the SOR, Applicant provided a chart of his debt payments, in which he referred to a bank statement showing he paid $97 to this creditor. The bank statement is not included in the record. However, the debt does not appear on Applicant's April 2013 credit report.

$88

For Applicant

Utility or Phone Debt

Denied with Explanation

—

Claimed

Debt Paid in Full

1.j

Unknown type, $634. Paid. Applicant's 2011 credit report describes the debt as “unknown loan type” and shows that the balance of $634 was charged off in 2008. When interviewed in 2012, Applicant did not recognize the debt. In his Answer, Applicant stated it was paid. The debt does not appear on his April 2013 credit report.

$634

For Applicant

Unspecified Financial

Admitted

—

Documented

Debt Paid in Full

1.k

Student loan, $5,282. Payment plan. Applicant’s student loans were deferred while he was in the Navy. This student loan was in collection status in 2011. He provided documentation showing that in February 2013, he entered a loan rehabilitation program, with a monthly payment plan of $50. His submission to the DOD CAF in June 2013 stated the account was current. Applicant's January 2014 credit report shows a balance of $3,287.

$5,282

For Applicant

Student Loan Debt

Unknown

—

Documented

Payment Plan with Creditor

1.l

Auto loan, $24,955. Paid. The alleged amount is the original loan balance when Applicant purchased a car in 2001. He made timely payments for several years. When his first wife lost her job in about 2006, the account became delinquent. He contacted the lender and was advised to surrender the vehicle, which he did. He stated in his security interview that it was sold at auction. He believed the car’s value at the time was $5,600, and listed this delinquent amount in his 2011 security clearance application. He has not been contacted by the creditor about a deficiency balance since he surrendered the car in October 2006. In his 2014 Response, he stated the debt is paid. It does not appear on his April or November 2013 credit reports.

$24,955

For Applicant

Auto Loan Debt

Admitted

—

Documented

Debt Paid in Full

1.m

Medical, $107. Paid. Applicant stated in his security interview that he did not recognize the debt. In his Answer to the SOR, he provided a copy of a check showing a payment of $107 to the medical creditor, dated August 1, 2013. Although he cites the cancelled version of the check in his Response, he did not enclose the cancelled check.

$107

For Applicant

Medical Debt

Unknown

—

Claimed

Debt Paid in Full

1.n

Cable account, $293. Unresolved. In his June 2013 submission to the DOD CAF, and in his January 2014 Response, Applicant stated he paid the debt on June 14, 2013. However, the record contains no supporting documentation.

$293

For Applicant

Utility or Phone Debt

Unknown

—

1.o

Unknown type, $126. Resolved. Applicant stated in his 2012 security interview that he did not recognize this debt, which was listed as on his 2011 credit report as in collection status. However, it does not appear on his July or November 2013 credit reports.

$126

For Applicant

Unspecified Financial

Unknown

—

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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

FOOTNOTES