ISCR Case 12-04508.h1

Case Headnote

ISCR Case No. 12-04508.h1

deniedJun 10, 2014· Hon. Rita C. O'Brien· hearing

Summary

A 47-year-old senior administrative assistant with a long history in defense contracting was denied a security clearance under Guideline F (Financial Considerations) due to unresolved delinquent debts totaling $36,688. The applicant faced allegations concerning six specific debts, including credit card accounts ranging from $2,056 to $12,315 and a $44 medical debt.

While the applicant stated that several debts were part of a debt-resolution program or had been paid, evidence provided was often insufficient or contradictory. For example, one $10,225 credit card debt was claimed to be in a resolution program, but a settled account with the same creditor had a different account number. Similarly, a $8,407 credit card debt was also claimed to be in a program, but a settled account with that creditor also had a different account number. The applicant also cited the statute of limitations for a $12,315 joint credit card debt, which was not considered a good-faith effort to resolve the obligation.

The denial was based on the applicant's significant unresolved debts, which raised concerns about her judgment and reliability. The applicant failed to provide sufficient evidence that her financial issues were beyond her control or that adequate steps had been taken to resolve her obligations.

Why the Applicant Was Denied

The applicant has unresolved delinquent debts totaling $36,688, which raise concerns about her judgment and reliability.
The applicant did not provide sufficient evidence to demonstrate that her financial issues were beyond her control or that she had taken adequate steps to resolve her debts.
The applicant's reliance on the statute of limitations for debts does not constitute a good-faith effort to resolve her financial 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(d)appliedGood-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant settled some debts through a debt-resolution program, but many debts remain unresolved.

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.”
— AG ¶ 18

Procedural Posture

SOR issuedFeb 21, 2014
Answer filedMar 11, 2014Applicant's response was equivocal.
Hearing held—Decision based on written record.
Decision dateJun 10, 2014

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Impact of Financial Irresponsibility on Security Clearance Eligibility
Consideration of Good-faith Efforts in Resolving Debts for Security Clearance Decisions

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	Credit card: $2,056. Applicant explained in her security interview that she used this credit card to pay for veterinary expenses. She opened it in 2008. It became delinquent in 2009, and was sold to a collection agency. Applicant stated in her Answer that she has had a payment plan for the account since June 2013 and is making payments. Her January 2014 credit report shows that the debt is being paid under a “partial payment agreement.” $2,056	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Credited Payment Plan with Creditor
1.b	Credit card: $10,225. Applicant has had more than one account with this creditor (Creditor A). The Creditor A account alleged in the SOR was opened in 2001 and became delinquent in 2006. Applicant stated the debt was in her debt-resolution program, and that it had been dropped from her credit report as of August 2013. An account with Creditor A was settled by the law firm in July 2008. However, the account that was settled is not the one alleged in the SOR, as they have different account numbers. $10,225	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Credit card: $3,641. This account was opened in 2005 and became delinquent in 2006. In her 2013 interrogatory response, Applicant said she did not recognize it. In her Answer, she said it was included in her debt-resolution program. However, an account with this creditor does not appear in the list of settled accounts provided by the law firm. Applicant stated that the debt has not appeared on her credit report since August 2013. It does not appear on her January 2014 credit report. $3,641	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Medical debt: $44. This medical debt became delinquent in 2012. In her 2013 interrogatory response, Applicant said she did not recognize it. However, in her Answer to the SOR, she stated she has paid it. She did not provide paperwork supporting her claim. Her July 2013 credit report shows it is in collection status. $44	Against Applicant	Medical Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Credit card: $8,407. Applicant has had more than one account with this creditor (Creditor B). She opened this account in April 2009, and it became delinquent in 2011. She stated in her Answer to the SOR that the debt was included in her debt-resolution program. The law firm did settle an account with Creditor B in October 2008. However, that account had a different account number than the one with Creditor B that is cited in the SOR. $8,407	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Credit card: $12,315. This debt became delinquent in 2006. Applicant stated in her interrogatory response that she was an authorized user on the account with her cohabitant, and that, “I’m not sure where this card stands as we get no calls anymore since we have met statue [sic] of limitations in [state].” Applicant's 2012 credit report confirms that it is a joint account. In her Answer to the SOR, Applicant stated this debt was in her debt-resolution program. However, the Creditor A account settled by the law firm has a different account number than the account at allegation 1.f. The debt does not appear in her 2013 or 2014 credit reports. $12,315	Against Applicant	Credit Card Debt	Denied	(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

Credit card: $2,056. Applicant explained in her security interview that she used this credit card to pay for veterinary expenses. She opened it in 2008. It became delinquent in 2009, and was sold to a collection agency. Applicant stated in her Answer that she has had a payment plan for the account since June 2013 and is making payments. Her January 2014 credit report shows that the debt is being paid under a “partial payment agreement.”

$2,056

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

Credited

Payment Plan with Creditor

1.b

Credit card: $10,225. Applicant has had more than one account with this creditor (Creditor A). The Creditor A account alleged in the SOR was opened in 2001 and became delinquent in 2006. Applicant stated the debt was in her debt-resolution program, and that it had been dropped from her credit report as of August 2013. An account with Creditor A was settled by the law firm in July 2008. However, the account that was settled is not the one alleged in the SOR, as they have different account numbers.

$10,225

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Credit card: $3,641. This account was opened in 2005 and became delinquent in 2006. In her 2013 interrogatory response, Applicant said she did not recognize it. In her Answer, she said it was included in her debt-resolution program. However, an account with this creditor does not appear in the list of settled accounts provided by the law firm. Applicant stated that the debt has not appeared on her credit report since August 2013. It does not appear on her January 2014 credit report.

$3,641

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

Medical debt: $44. This medical debt became delinquent in 2012. In her 2013 interrogatory response, Applicant said she did not recognize it. However, in her Answer to the SOR, she stated she has paid it. She did not provide paperwork supporting her claim. Her July 2013 credit report shows it is in collection status.

$44

Against Applicant

Medical Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

Credit card: $8,407. Applicant has had more than one account with this creditor (Creditor B). She opened this account in April 2009, and it became delinquent in 2011. She stated in her Answer to the SOR that the debt was included in her debt-resolution program. The law firm did settle an account with Creditor B in October 2008. However, that account had a different account number than the one with Creditor B that is cited in the SOR.

$8,407

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

Credit card: $12,315. This debt became delinquent in 2006. Applicant stated in her interrogatory response that she was an authorized user on the account with her cohabitant, and that, “I’m not sure where this card stands as we get no calls anymore since we have met statue [sic] of limitations in [state].” Applicant's 2012 credit report confirms that it is a joint account. In her Answer to the SOR, Applicant stated this debt was in her debt-resolution program. However, the Creditor A account settled by the law firm has a different account number than the account at allegation 1.f. The debt does not appear in her 2013 or 2014 credit reports.

$12,315

Against Applicant

Credit Card Debt

Denied

(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 ANALYSIS

FORMAL FINDINGS

CONCLUSION

FOOTNOTES