ISCR Case 12-10432.h1

Case Headnote

ISCR Case No. 12-10432.h1

grantedMar 15, 2016· Hon. Edward W. Loughran· hearing

Summary

A 52-year-old defense contractor sought to retain his security clearance, which was challenged under Guideline F (Financial Considerations). The Statement of Reasons (SOR) cited several financial issues, including a Chapter 7 bankruptcy in 1996 and delinquent debts. Specific allegations included a car loan cosigned for his ex-wife around 2008, which resulted in a repossession and a reported debt of $24,021. The applicant acknowledged poor judgment in cosigning and did not intend to address this debt further, as it was likely past the reporting period.

Additionally, the SOR noted a $707 debt to a collection company for animal hospital services from 2007, which the applicant successfully disputed and had removed from his credit report. His mortgage loan was also past due while he pursued a modification, but it has been current since May 2015.

The judge ultimately granted the applicant eligibility for access to classified information. This decision was based on the applicant's sound current finances, with no derogatory accounts on his recent credit reports. The successful dispute and removal of the veterinary debt further demonstrated his efforts. The judge concluded that the applicant's past financial issues were unlikely to recur and did not reflect negatively on his current reliability.

Why the Applicant Prevailed

The applicant's current finances are sound with no derogatory accounts on his credit report.
He successfully disputed a debt related to veterinary services, which was removed from his credit report.
The applicant's past financial issues were deemed unlikely to recur and did not reflect on his current reliability.

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 Long Ago or Infrequently
AG ¶ 20(c)appliedReceived Counseling or Indications That the Problem Is Resolved
AG ¶ 20(d)appliedGood-faith Effort to Repay or Resolve Debts
AG ¶ 20(e)appliedReasonable Basis to Dispute Legitimacy of Past-due Debt

Key Rule Quoted

“The ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept.”

Procedural Posture

SOR issuedJun 10, 2015
Answer filedJun 29, 2015Applicant initially elected to decide on the written record.
Hearing heldDec 7, 2015
Decision dateMar 15, 2016

Cite For

Mitigation of Financial Considerations Under Guideline F
Successful Dispute of Debt Leading to Removal From Credit Report
Whole-person Concept in Security Clearance Evaluations

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	Applicant cosigned a car loan for his second ex-wife in about 2008. They had been divorced for more than five years, but she is the mother of three of his children, and he decided to assist her. He discovered several years later that she did not maintain the payments, and the car was repossessed. He admitted that he made a poor decision and that he became responsible for the loan when his ex-wife did not pay it. The debt is listed twice on the combined credit report of April 2012, as reported by Equifax (SOR ¶ 1.a) and TransUnion (SOR ¶ 1.b). The debt is also reported by Equifax in October 2014 and August 2015 under a collection company with a balance of $24,021. Applicant questioned the amount of the balance. The debt is not listed on the December 2015 Experian credit report, likely because it is past the seven-year reporting period. He does not intend to address the debt further. $24,021	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(a) behavior happened long ago / infrequent / unlikely to recur (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Other
1.b	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—
1.c	SOR ¶ 1.c alleges a $707 debt to a collection company on behalf of an animal hospital. Applicant stated that his second ex-wife obtained veterinary services for her pet in 2007. Applicant’s name was on the account. He disputed the debt, and the collection company deleted the account from his credit report. $707	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(e) reasonable, documented basis to dispute the debt	Documented Debt Disputed with Creditor
1.d	Applicant’s mortgage loan was past due while he attempted to obtain a loan modification (SOR ¶ 1.d). The mortgage loan has been current since he received the modification in May 2015, as reflected by bank records and the two most recent credit reports.	For Applicant	Mortgage or Home Loan 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	Documented Payment Plan with Creditor
1.e	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant cosigned a car loan for his second ex-wife in about 2008. They had been divorced for more than five years, but she is the mother of three of his children, and he decided to assist her. He discovered several years later that she did not maintain the payments, and the car was repossessed. He admitted that he made a poor decision and that he became responsible for the loan when his ex-wife did not pay it. The debt is listed twice on the combined credit report of April 2012, as reported by Equifax (SOR ¶ 1.a) and TransUnion (SOR ¶ 1.b). The debt is also reported by Equifax in October 2014 and August 2015 under a collection company with a balance of $24,021. Applicant questioned the amount of the balance. The debt is not listed on the December 2015 Experian credit report, likely because it is past the seven-year reporting period. He does not intend to address the debt further.

$24,021

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(a) behavior happened long ago / infrequent / unlikely to recur

(c) received/receiving counseling; problem being resolved

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

Claimed

Other

1.b

specific text not stated in this decision

For Applicant

Unspecified Financial

Unknown

—

1.c

SOR ¶ 1.c alleges a $707 debt to a collection company on behalf of an animal hospital. Applicant stated that his second ex-wife obtained veterinary services for her pet in 2007. Applicant’s name was on the account. He disputed the debt, and the collection company deleted the account from his credit report.

$707

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(e) reasonable, documented basis to dispute the debt

Documented

Debt Disputed with Creditor

1.d

Applicant’s mortgage loan was past due while he attempted to obtain a loan modification (SOR ¶ 1.d). The mortgage loan has been current since he received the modification in May 2015, as reflected by bank records and the two most recent credit reports.

For Applicant

Mortgage or Home Loan 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

Documented

Payment Plan with Creditor

1.e

specific text not stated in this decision

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