ISCR Case 13-00989.h1

Case Headnote

ISCR Case No. 13-00989.h1

grantedMar 27, 2014· Hon. Rita C. O'Brien· hearing

Summary

A 42-year-old defense contractor with a top secret security clearance faced a security review under Guideline F (Financial Considerations) due to financial difficulties. These issues arose from his wife's unemployment and the real estate market crash. The applicant admitted to several delinquent debts, which included a cable account, a retail purchase, two credit card accounts, a signature loan, and two mortgage loans.

The applicant demonstrated proactive efforts to resolve his financial issues. He paid off a $184 cable account and a $299 retail purchase. For a $32,000 second mortgage, he established a $100 monthly payment plan, and he secured a fixed-rate modification for his primary mortgage, reducing payments by approximately $850 per month. He also arranged payment plans for a $13,000 signature loan and an $8,626 credit card account, with payments deducted directly from his bank. One $3,901 credit card debt remained unresolved as he struggled to locate the correct creditor, and a $414 credit card debt was disputed, with the applicant claiming it was paid.

Despite these outstanding issues, the applicant took responsibility for his financial problems, established payment plans for most debts, and paid off several others. His financial situation had improved, and he presented a credible plan to sell his condominium to further alleviate remaining debts. Consequently, his security clearance was GRANTED.

Why the Applicant Prevailed

The applicant took responsibility for his financial problems and made efforts to resolve them.
He has established payment plans for most of his debts and has paid off several others.
The applicant's financial situation has improved, and he has a credible plan to sell his condominium to alleviate remaining debts.

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 Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceiving Counseling or Evidence of Resolving the Problem
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the DebtThe applicant did not provide documentation to support his dispute of one debt.

Key Rule Quoted

“An applicant is not required to establish that he has paid off each and every debt listed in the SOR. He must only show, as Applicant has, that he has a plan to resolve his debts and has taken significant actions to implement it.”
— ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008)

Procedural Posture

SOR issuedOct 22, 2013
Answer filedNov 13, 2013
Hearing heldFeb 19, 2014Record held open for additional documents.
Decision dateMar 27, 2014

Cite For

Mitigation of Financial Difficulties Under Guideline F
Good-faith Efforts to Resolve Debts
Impact of External Circumstances on Financial Stability

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	Cable account: $184. PAID. Applicant was charged for failing to return a cable box. He provided documentation showing he paid the debt in December 2013. $184	For Applicant	Utility or Phone Debt	Admitted	—	—	—
1.b	Retail purchase: $299. PAID. Applicant has had payments deducted from his bank account for this computer purchase. He provided a letter from the creditor showing his payments had reduced the balance to $153.10. He provided an additional letter dated December 2013 showing he paid off the remainder and has a zero balance. $299	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Mortgage loan: $32,000. PAYMENT PLAN. Applicant originally had an adjustable rate mortgage on his primary residence. About one year ago, he negotiated a modification of the loan and obtained a fixed rate loan that lowered the payment by approximately $850 per month. That loan is current. Allegation 1.c refers to the second mortgage on the property. Applicant has been in touch with the lender. He provided documentation of past payment agreements, but the company has not sent him documentation related to their current arrangement. He is paying $100 per month on his mortgage of $600 per month, and he testified that the lender agreed to this arrangement. $32,000	For Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	—
1.d	Signature loan: $13,000. PAYMENT PLAN. Applicant’s 2013 credit report shows he has arranged a payment plan with the lender for this loan. He provided documentation showing he has been making payments of $50, and sometimes more, per month. $13,000	For Applicant	Personal Loan Debt	Admitted	—	—	—
1.e	Credit card account: $8,626. PAYMENT PLAN. Applicant testified that he had established a payment plan in the past, with payments increasing every three months. He made payments for a year and a half. However, the original creditor did not credit his payments to the account, and the balance was never reduced. He contacted the current creditor and established a new payment plan, with deductions coming directly from his bank account. He provided a letter showing his December 2013 payment. He also provided a document showing payments of $85 per month starting March 2014. $8,626	For Applicant	Credit Card Debt	Admitted	—	—	—
1.f	Credit card account. $3,901. UNRESOLVED. When Applicant completed his Answer to the SOR, he believed that he had a payment plan in place for this debt. However, he now believes he mistakenly sent the payments to the original creditor after the debt had been sold to a collection agency. He has spoken to two collections agencies and a law firm in an attempt to establish payments with the correct creditor, but has not found the company that holds the debt. $3,901	For Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Credit card account. $414. DISPUTED. Applicant denies this debt and testified that he has paid it. He is uncertain why it continues to appear on his credit report as delinquent. He did not provide documentation showing it is not his debt, and has not formally disputed the debt with the credit agencies. $414	For Applicant	Credit Card Debt	Denied	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Cable account: $184. PAID. Applicant was charged for failing to return a cable box. He provided documentation showing he paid the debt in December 2013.

$184

For Applicant

Utility or Phone Debt

Admitted

—

1.b

Retail purchase: $299. PAID. Applicant has had payments deducted from his bank account for this computer purchase. He provided a letter from the creditor showing his payments had reduced the balance to $153.10. He provided an additional letter dated December 2013 showing he paid off the remainder and has a zero balance.

$299

For Applicant

Unspecified Financial

Admitted

—

1.c

Mortgage loan: $32,000. PAYMENT PLAN. Applicant originally had an adjustable rate mortgage on his primary residence. About one year ago, he negotiated a modification of the loan and obtained a fixed rate loan that lowered the payment by approximately $850 per month. That loan is current. Allegation 1.c refers to the second mortgage on the property. Applicant has been in touch with the lender. He provided documentation of past payment agreements, but the company has not sent him documentation related to their current arrangement. He is paying $100 per month on his mortgage of $600 per month, and he testified that the lender agreed to this arrangement.

$32,000

For Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

—

1.d

Signature loan: $13,000. PAYMENT PLAN. Applicant’s 2013 credit report shows he has arranged a payment plan with the lender for this loan. He provided documentation showing he has been making payments of $50, and sometimes more, per month.

$13,000

For Applicant

Personal Loan Debt

Admitted

—

1.e

Credit card account: $8,626. PAYMENT PLAN. Applicant testified that he had established a payment plan in the past, with payments increasing every three months. He made payments for a year and a half. However, the original creditor did not credit his payments to the account, and the balance was never reduced. He contacted the current creditor and established a new payment plan, with deductions coming directly from his bank account. He provided a letter showing his December 2013 payment. He also provided a document showing payments of $85 per month starting March 2014.

$8,626

For Applicant

Credit Card Debt

Admitted

—

1.f

Credit card account. $3,901. UNRESOLVED. When Applicant completed his Answer to the SOR, he believed that he had a payment plan in place for this debt. However, he now believes he mistakenly sent the payments to the original creditor after the debt had been sold to a collection agency. He has spoken to two collections agencies and a law firm in an attempt to establish payments with the correct creditor, but has not found the company that holds the debt.

$3,901

For Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

Credit card account. $414. DISPUTED. Applicant denies this debt and testified that he has paid it. He is uncertain why it continues to appear on his credit report as delinquent. He did not provide documentation showing it is not his debt, and has not formally disputed the debt with the credit agencies.

$414

For Applicant

Credit Card Debt

Denied

—

Loading case…

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 ANALYSIS

FORMAL FINDINGS

CONCLUSION

FOOTNOTES