ISCR Case 12-06714.h1

Case Headnote

ISCR Case No. 12-06714.h1

deniedMar 21, 2014· Hon. Rita C. O'Brien· hearing

Summary

A 52-year-old computer programmer/analyst was denied a public trust position due to significant financial concerns under Guideline F. The applicant had approximately $250,832 in delinquent debts, including multiple foreclosures and a prior bankruptcy. Specific unresolved debts included a $5,067 federal credit union account and a $3,300 credit card, both of which lacked evidence of payment plans or recent payments.

Additional debts included a $9,430 home equity line of credit and a $31,872 mortgage loan, both leading to foreclosure in 2009. A $16,758 second mortgage was charged off as uncollectible, with no evidence of payment. A $135,429 mortgage loan, obtained after a move, resulted in foreclosure and a short sale, with the applicant denying further debt despite an IRS notification of a $1,000 forgiven deficiency. A $4,906 collection account, opened in 2007 and charged off in 2009, also remained unresolved, with the applicant denying knowledge and failing to provide documentation of a formal dispute.

The denial was based on the applicant's failure to provide evidence of payment plans or efforts to resolve these delinquent debts. The judge found that claims of financial difficulties due to unemployment did not adequately mitigate the concerns, and the applicant's conflicting statements regarding the impact of unemployment on her finances undermined her credibility.

Why the Applicant Was Denied

Applicant failed to provide evidence of payment plans or efforts to resolve delinquent debts.
The judge found that the applicant's financial problems were not adequately mitigated by her claims of unemployment.
Applicant's conflicting statements regarding the impact of unemployment on her finances undermined her credibility.

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)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlApplicant received limited mitigation due to periods of unemployment.

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 issuedNov 19, 2013
Answer filedDec 23, 2013Notarized response admitting six debts.
Hearing heldN/AApplicant requested a decision without a hearing.
Decision dateMar 21, 2014

Cite For

Insufficient Evidence of Financial Responsibility Under Guideline F
Impact of Conflicting Statements on Credibility
Limited Mitigation Due to Unemployment Not Substantiated by Actions Taken to Resolve Debts

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	$5,067, federal credit union. UNRESOLVED. Applicant opened this account in January 2008, and it became delinquent in June 2009. She stated in her Answer that at the time she opened it, she was supporting five people, including two children in college and her father-in-law, and she used the funds to help pay bills. There is no record evidence Applicant has established a payment plan or made recent payments on this account. $5,067	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	$3,300, credit card. UNRESOLVED. Applicant made timely payments until she was laid off in 2009. She stated in her Answer that she stopped using credit cards at that time. In her 2011 public trust application, she stated, “Once I get a job I will work on getting this paid.” She provided no documentation showing a payment plan or recent payments on the account. $3,300	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	$9,430, home equity line of credit (HELOC), June 2005. Applicant sought a line of credit in order to remodel her home in City 1. She was employed, but her husband was not. Applicant stated in her Answer that after being laid off she was unable to meet the payments. The lender obtained a default judgment and foreclosure against Applicant in 2009. $9,430	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	$31,872, mortgage loan, June 2004. This mortgage loan also relates to Applicant's home in City 1. She provided the same information for this loan as described under allegation 1.c. The lender obtained a default judgment and foreclosure against Applicant in 2009. $31,872	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	$16,758, second-mortgage loan, January 2006. Applicant sought this loan on the home in City 1 in order to consolidate her debts. Her December 2013 credit report shows her last payment was in May 2009, and the creditor had charged off the delinquent balance as uncollectible. The record contains no evidence of payment on this debt. $16,758	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	$135,429, mortgage loan, April 2008. Applicant denies this debt. After moving to City 2, she obtained this loan. The property was ultimately foreclosed and short-sold. Applicant stated in her Answer that she was told she owed nothing further. The Internal Revenue Service (IRS) subsequently informed Applicant she owed tax on $1,000 related to the sale, indicating that a deficiency balance of $1,000 may have been forgiven. Applicant stated that she paid the tax, although she did not receive the $1,000 because it was “[P]aid to us but taken back in fees of some sort . . . .” However, Applicant provided no supporting documentation to show the IRS correspondence or any tax she paid. She stated in her interrogatory response that she had no relevant documentation. $135,429	Against Applicant	Mortgage or Home Loan Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	$25,346, default judgment of foreclosure. Applicant denies knowledge of this debt, stating that she has not been contacted about it. The Government provided evidence that the debt relates to the court-ordered default judgment on Applicant's 2004 mortgage loan (allegation 1.f) and 2005 HELOC (allegation 1.c) on the home in City 1. Applicant accepted notice of the suit in September 2009. The court issued a decree for foreclosure and sale in October 2009. As this allegation duplicates the debts at SOR ¶¶ 1.c and 1.f, I find for the Applicant on this allegation. $25,346	For Applicant	Unspecified Financial	Denied	—	—	—
1.h	$4,906, collection account. UNRESOLVED. Applicant denies this account. It appears in her June and December 2013 credit reports. The December 2013 credit report lists the original creditor, and shows the account was opened in 2007. The last payment was made in 2009, and the creditor charged off the balance as uncollectible. The creditor that appears in the SOR is the collection agency to which the original creditor sold the debt. Applicant stated in her Answer that when she contacted the collection agency, the company did not have an account in her name. She believes it is not her account because she has not opened credit accounts since 2009; however, the account was opened in 2007. She did not provide documentation showing her contact with the creditor, and her credit report does not indicate that she formally disputed the account. $4,906	Against Applicant	Unspecified Financial	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

$5,067, federal credit union. UNRESOLVED. Applicant opened this account in January 2008, and it became delinquent in June 2009. She stated in her Answer that at the time she opened it, she was supporting five people, including two children in college and her father-in-law, and she used the funds to help pay bills. There is no record evidence Applicant has established a payment plan or made recent payments on this account.

$5,067

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

$3,300, credit card. UNRESOLVED. Applicant made timely payments until she was laid off in 2009. She stated in her Answer that she stopped using credit cards at that time. In her 2011 public trust application, she stated, “Once I get a job I will work on getting this paid.” She provided no documentation showing a payment plan or recent payments on the account.

$3,300

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

$9,430, home equity line of credit (HELOC), June 2005. Applicant sought a line of credit in order to remodel her home in City 1. She was employed, but her husband was not. Applicant stated in her Answer that after being laid off she was unable to meet the payments. The lender obtained a default judgment and foreclosure against Applicant in 2009.

$9,430

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

$31,872, mortgage loan, June 2004. This mortgage loan also relates to Applicant's home in City 1. She provided the same information for this loan as described under allegation 1.c. The lender obtained a default judgment and foreclosure against Applicant in 2009.

$31,872

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

$16,758, second-mortgage loan, January 2006. Applicant sought this loan on the home in City 1 in order to consolidate her debts. Her December 2013 credit report shows her last payment was in May 2009, and the creditor had charged off the delinquent balance as uncollectible. The record contains no evidence of payment on this debt.

$16,758

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

$135,429, mortgage loan, April 2008. Applicant denies this debt. After moving to City 2, she obtained this loan. The property was ultimately foreclosed and short-sold. Applicant stated in her Answer that she was told she owed nothing further. The Internal Revenue Service (IRS) subsequently informed Applicant she owed tax on $1,000 related to the sale, indicating that a deficiency balance of $1,000 may have been forgiven. Applicant stated that she paid the tax, although she did not receive the $1,000 because it was “[P]aid to us but taken back in fees of some sort . . . .” However, Applicant provided no supporting documentation to show the IRS correspondence or any tax she paid. She stated in her interrogatory response that she had no relevant documentation.

$135,429

Against Applicant

Mortgage or Home Loan Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

$25,346, default judgment of foreclosure. Applicant denies knowledge of this debt, stating that she has not been contacted about it. The Government provided evidence that the debt relates to the court-ordered default judgment on Applicant's 2004 mortgage loan (allegation 1.f) and 2005 HELOC (allegation 1.c) on the home in City 1. Applicant accepted notice of the suit in September 2009. The court issued a decree for foreclosure and sale in October 2009. As this allegation duplicates the debts at SOR ¶¶ 1.c and 1.f, I find for the Applicant on this allegation.

$25,346

For Applicant

Unspecified Financial

Denied

—

1.h

$4,906, collection account. UNRESOLVED. Applicant denies this account. It appears in her June and December 2013 credit reports. The December 2013 credit report lists the original creditor, and shows the account was opened in 2007. The last payment was made in 2009, and the creditor charged off the balance as uncollectible. The creditor that appears in the SOR is the collection agency to which the original creditor sold the debt. Applicant stated in her Answer that when she contacted the collection agency, the company did not have an account in her name. She believes it is not her account because she has not opened credit accounts since 2009; however, the account was opened in 2007. She did not provide documentation showing her contact with the creditor, and her credit report does not indicate that she formally disputed the account.

$4,906

Against Applicant

Unspecified Financial

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