Summary
The applicant, a 55-year-old software engineer and retired Marine, faced security concerns under Guideline F due to multiple bankruptcy filings and financial difficulties. The judge found that the applicant had taken significant steps to resolve his financial issues, including establishing repayment plans and improving his financial status, leading to a decision to grant his security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: In September 2011, Applicant and his wife jointly filed a voluntary petition for bankruptcy under Chapter 13, listing $1,417,399.67 in liabilities, listing state and federal income tax, charge accounts, credit cards, student loans, an automobile loan (for a 2005 Lexus), and lines of credit. The petition reflected total assets of $892,675, including two real estate properties with a combined worth of $839,600 and personal property worth $53,075. The Docket Text of the U.S. Bankruptcy Court indicated the presence of plan deficiencies and objections by the Trustee. Although the plan was modified, the case was dismissed on May 22, 2012 (1.a). On June 12, 2012, Applicant and his wife again jointly filed a voluntary petition for bankruptcy under Chapter 13 (with the same attorney, Trustee, and judge), listing $1,371,062 in liabilities, listing state and federal income tax, charge accounts, credit cards, student loans, (two automobile loans for a 2005 Lexus and a 2012 Toyota Camry), and lines of credit. The petition reflected total assets of $975,076, including two real estate properties with a combined worth of $900,000 and personal property worth $75,076. Once again, the Docket Text of the U.S. Bankruptcy Court indicated the presence of plan deficiencies and objections by the Trustee. Although the plan was modified, the case was dismissed on September 19, 2012 (1.b). On February 8, 2013, Applicant and his wife again jointly filed a voluntary petition for bankruptcy under Chapter 13 (with the same attorney and Trustee, but a different judge), listing $980,341.82 in liabilities, listing state and federal income tax, charge accounts, credit cards, student loans, automobile loans, and lines of credit. The petition reflected total assets of $618,497, including two real estate properties (including the original residence and another property, but not the dream home) with a combined worth of $505,000 and personal property worth $113,497. Once again, the Docket Text of the U.S. Bankruptcy Court indicated the presence of plan deficiencies and objections by the Trustee. The case was dismissed on June 4, 2013 (1.c). unpaid income taxes owed to the U.S. Internal Revenue Department (IRS) for the tax year 2009 in the amount of $3,452.97 for which Applicant has an installment agreement under which he is paying $250 each month; and unpaid income taxes owed to the IRS for the tax year 2013 in the amount of $1,922.47 for which Applicant has another installment agreement under which he is paying $500 each month, leaving a combined remaining balance of $6,943.21, including penalties and interest, reduced by a credit of $2,140 (1.d). the second mortgage loan with Bank D for $141,195.60, described above, which has been forgiven, leaving a zero balance (1.h). a credit card with a high credit of $7,338 and a past-due balance of $6,638 that was transferred or sold to a debt purchaser who increased the remaining balance to $7,338.29. In March 2014, Applicant and the creditor established a repayment agreement under which Applicant is to make monthly $100 payments, and he has done so (1.i). a credit card with a high credit of $7,164 and a past-due balance of $5,687 that was transferred or sold to a debt purchaser who increased the remaining balance to $7,163.58. In March 2014, Applicant and the creditor established a repayment agreement under which Applicant is to make monthly $211 payments, and he has done so (1.j). an unspecified line of credit with a high credit of $2,776, a past-due balance of $438, and an overall balance of $2,395. Applicant disputed the account and indicated that his credit repair firm was assisting him in correcting the erroneous entry on his credit report (1.k).
The judge granted the clearance. The government raised disqualifying conditions F1, F3. The judge applied mitigating conditions F2, F3, F4. The decision turned on the following: The applicant demonstrated a proactive approach to resolving his financial issues, including establishing repayment plans for delinquent accounts; He successfully addressed most of his debts and showed evidence of improved financial stability; The judge found that the applicant's financial problems were under control and did not pose a security risk.
Why the Applicant Prevailed
- The applicant demonstrated a proactive approach to resolving his financial issues, including establishing repayment plans for delinquent accounts.
- He successfully addressed most of his debts and showed evidence of improved financial stability.
- The judge found that the applicant's financial problems were under control and did not pose a security risk.
Conditions Referenced
- F1raisedInability or Unwillingness to Satisfy Debts
- F3rejectedDeliberately Providing False or Misleading Information
- F2appliedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Applicant's Control
- F3appliedThe Applicant Has Made Good Faith Efforts to Repay Overdue Creditors
- F4appliedThe Applicant Has a Reasonable Plan for Financial Stability
Key Rule Quoted
“Eligibility for a security clearance and access to classified information is granted.”
Procedural Posture
- SOR issuedJan 29, 2015
- Answer filedMar 2, 2015
- Hearing heldAug 6, 2015
- Decision dateMar 18, 2016
Cite For
- Mitigation of Financial Issues Under Guideline F
- Good Faith Efforts to Resolve Debts
- Improvement in Financial Stability as a Basis for Granting Clearance