ISCR Case 12-10324.h1

Case Headnote

ISCR Case No. 12-10324.h1

grantedDec 10, 2015· Hon. Mary E. Henry· hearing

Summary

A 50-year-old material specialist for a DOD contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant's financial difficulties stemmed primarily from a labor strike and unpaid medical bills. Allegations included a $17,498 second mortgage debt, $4,953 in medical bills for cancer treatment, a $674 cell phone account, and several smaller medical debts totaling $368, $90, and $33. Additionally, an $11,173 education debt was in forbearance, and a $3,464 car repossession from 2006-2007 was noted. An alleged $356 debt was not found to be associated with the applicant.

The applicant demonstrated significant efforts to resolve these issues. He negotiated and began timely monthly payments on the second mortgage and the $4,953 medical bill in July 2015. The cell phone debt was settled and closed by October 2015. He fully paid the $90 and $33 medical bills by September 2015, and was making $50 monthly payments on the $368 medical bill, reducing its balance to $98 by October 2015. An additional $122 medical bill, not initially listed, was also paid in full. The education debt was in good standing under forbearance, and the car repossession debt was no longer listed on recent credit reports due to its age.

The decision to grant the clearance was based on the applicant's good-faith efforts to repay creditors, his timely payments on negotiated plans, and the fact that his financial issues largely arose from circumstances beyond his control, such as the labor strike and medical expenses.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to repay overdue creditors and resolve debts.
He has made timely payments on negotiated payment plans for several debts.
The applicant's financial issues were largely due to circumstances beyond his control, including a labor strike and medical expenses.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.craisedA History of Not Meeting Financial Obligations

Mitigating

F.2.bappliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
F.2.cappliedThe Person Has Received or Is Receiving Counseling for the Problem And/or There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
F.2.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”

Procedural Posture

SOR issuedJun 5, 2015
Answer filedJul 11, 2015
Hearing heldOct 22, 2015
Decision dateDec 10, 2015

Cite For

Good-faith Effort to Resolve Financial Obligations Under Guideline F
Mitigating Conditions Applicable to Financial Considerations
Impact of Circumstances Beyond Control on Financial Issues

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	SOR allegation 1.a for $17,498 is the largest debt, and it relates to the second mortgage on his home. Applicant advised that he fell behind in this mortgage payment. He negotiated a monthly payment of $109, which began in July 2015. He has timely made his payment each month. $17,498	For Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor
1.b	SOR allegation 1.b ($4,953) concerns medical bills not paid by Applicant’s insurance carrier for his cancer treatment. Applicant contacted the creditor and negotiated a payment plan. He agreed to pay $103 a month on this debt, and he began making his payments on July 15, 2015. $4,953	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.c	SOR allegation 1.c concerns a $674 cell phone account now held by a collection company. Applicant negotiated a payment of $64 a month. The September 2015 credit report shows a balance of $488, which indicates payments have been made on the account. Applicant provided a statement from the collection company showing a balance of $400 and a payment of $95 on October 29, 2015. With this last payment, the collection company advised that the debt had been settled or closed and no further payments would be taken. $674	For Applicant	Utility or Phone Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.d	SOR allegations 1.d ($368), 1.e ($90), and 1.f ($33) relate to medical bills. Applicant settled and paid the $90 medical bill on July 10, 2015. The September 2015 credit report indicates that he paid the $33 medical bill and that as of that date, the balance on the $368 debt was $148. Applicant is paying $50 a month on this bill with a payment made on October 20, 2015, leaving a balance of $98. Applicant provided documentation showing that he paid a $122 medical bill in full as of October 29, 2015. This bill is not listed on the SOR. $368	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.e	SOR allegations 1.d ($368), 1.e ($90), and 1.f ($33) relate to medical bills. Applicant settled and paid the $90 medical bill on July 10, 2015. The September 2015 credit report indicates that he paid the $33 medical bill and that as of that date, the balance on the $368 debt was $148. Applicant is paying $50 a month on this bill with a payment made on October 20, 2015, leaving a balance of $98. Applicant provided documentation showing that he paid a $122 medical bill in full as of October 29, 2015. This bill is not listed on the SOR. $90	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.f	SOR allegations 1.d ($368), 1.e ($90), and 1.f ($33) relate to medical bills. Applicant settled and paid the $90 medical bill on July 10, 2015. The September 2015 credit report indicates that he paid the $33 medical bill and that as of that date, the balance on the $368 debt was $148. Applicant is paying $50 a month on this bill with a payment made on October 20, 2015, leaving a balance of $98. Applicant provided documentation showing that he paid a $122 medical bill in full as of October 29, 2015. This bill is not listed on the SOR. $33	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.g	SOR allegation 1.g ($11,173) concerns education debt. According to the May 2012 credit report, the original creditor for this debt filed a claim with the Government for payment and closed its account. The Department of Education now holds this debt. The account has been placed in forbearance until May 24, 2016. His wife stated that she plans to start working before May 2016 to pay the debt. At this time, the debt is in good standing. $11,173	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	In his response to the SOR, Applicant indicated that he contacted the creditor identified in SOR allegation 1.h ($356). The creditor advised that it did not have an account in his name. This debt is not listed on the October 2014 and the September 2015 credit reports. $356	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	The last SOR debt (1.I - $3,464) concerns a car repossession. Applicant acknowledged that his car was repossessed because he was unable to make the monthly payment while he was on strike in late 2006 and early 2007. The May 2012 credit report indicates that the debt is a repossession and that there may be a balance due. Given the age of the debt, it is no longer listed on the October 2014 and the September 2015 credit reports. $3,464	For Applicant	Auto Loan Debt	Admitted	(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

SOR allegation 1.a for $17,498 is the largest debt, and it relates to the second mortgage on his home. Applicant advised that he fell behind in this mortgage payment. He negotiated a monthly payment of $109, which began in July 2015. He has timely made his payment each month.

$17,498

For Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

Documented

Payment Plan with Creditor

1.b

SOR allegation 1.b ($4,953) concerns medical bills not paid by Applicant’s insurance carrier for his cancer treatment. Applicant contacted the creditor and negotiated a payment plan. He agreed to pay $103 a month on this debt, and he began making his payments on July 15, 2015.

$4,953

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(c) received/receiving counseling; problem being resolved

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

Documented

Payment Plan with Creditor

1.c

SOR allegation 1.c concerns a $674 cell phone account now held by a collection company. Applicant negotiated a payment of $64 a month. The September 2015 credit report shows a balance of $488, which indicates payments have been made on the account. Applicant provided a statement from the collection company showing a balance of $400 and a payment of $95 on October 29, 2015. With this last payment, the collection company advised that the debt had been settled or closed and no further payments would be taken.

$674

For Applicant

Utility or Phone Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

1.d

SOR allegations 1.d ($368), 1.e ($90), and 1.f ($33) relate to medical bills. Applicant settled and paid the $90 medical bill on July 10, 2015. The September 2015 credit report indicates that he paid the $33 medical bill and that as of that date, the balance on the $368 debt was $148. Applicant is paying $50 a month on this bill with a payment made on October 20, 2015, leaving a balance of $98. Applicant provided documentation showing that he paid a $122 medical bill in full as of October 29, 2015. This bill is not listed on the SOR.

$368

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

1.e

$90

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

1.f

$33

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

1.g

SOR allegation 1.g ($11,173) concerns education debt. According to the May 2012 credit report, the original creditor for this debt filed a claim with the Government for payment and closed its account. The Department of Education now holds this debt. The account has been placed in forbearance until May 24, 2016. His wife stated that she plans to start working before May 2016 to pay the debt. At this time, the debt is in good standing.

$11,173

For Applicant

Student Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

In his response to the SOR, Applicant indicated that he contacted the creditor identified in SOR allegation 1.h ($356). The creditor advised that it did not have an account in his name. This debt is not listed on the October 2014 and the September 2015 credit reports.

$356

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

The last SOR debt (1.I - $3,464) concerns a car repossession. Applicant acknowledged that his car was repossessed because he was unable to make the monthly payment while he was on strike in late 2006 and early 2007. The May 2012 credit report indicates that the debt is a repossession and that there may be a balance due. Given the age of the debt, it is no longer listed on the October 2014 and the September 2015 credit reports.

$3,464

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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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

PROCEDURAL RULINGS

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES