ISCR Case 14-00478.h1

Case Headnote

ISCR Case No. 14-00478.h1

grantedJul 22, 2014· Hon. Wilford H. Ross· hearing

Summary

A 54-year-old defense contractor with three Master’s degrees was granted a security clearance despite concerns under Guideline F (Financial Considerations). The applicant faced financial difficulties totaling approximately $76,726, primarily stemming from a contentious divorce and a reduction in income.

The applicant admitted to several delinquent debts, including a $1,284 lease-end debt, a $31,245 repossessed boat loan, and a $12,218 credit card debt that was dismissed by the plaintiff. Other debts included a $1,562 credit card debt used by his ex-wife, a $8,997 student loan, a $3,190 gas credit card debt that was paid off, and various other past-due accounts and medical debts, many of which were incurred by his ex-wife. He also disputed a $2,207 rental car debt, which was subsequently removed from his credit report.

The clearance was granted because the applicant demonstrated a proactive approach to resolving his financial issues, contacting creditors, and establishing payment plans. The majority of the debts were attributed to circumstances beyond his control, such as the divorce and income loss. Furthermore, the applicant's current financial situation was stable, with increased income and ongoing efforts to resolve outstanding obligations.

Why the Applicant Prevailed

The applicant demonstrated a proactive approach to resolving his financial issues by contacting creditors and making payment arrangements.
The majority of the applicant's debts were incurred due to circumstances largely beyond his control, including a divorce and loss of income.
The applicant's current financial situation is stable, with a significant increase in income and ongoing efforts to resolve outstanding 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(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(c)appliedClear Indications That the Problem Is Being Resolved or Is Under Control
AG ¶ 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
AG ¶ 20(e)appliedReasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedMar 19, 2014
Answer filedApr 7, 2014
Hearing heldMay 22, 2014
Decision dateJun 23, 2014

Cite For

Proactive Efforts to Resolve Financial Issues Under Guideline F
Mitigating Conditions Applicable to Financial Difficulties Due to Divorce
Importance of Current Financial Stability in Security Clearance Decisions

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 admits that he is indebted to a bank for $1,284 regarding the end of a lease agreement. He further stated that there was a dispute regarding the amount of this debt and he was attempting to work it out with the creditor. Subsequent to the hearing he made an agreement with this creditor to pay $50 down and $20 a month until debt is resolved. The initial check has been cashed by the creditor. $1,284	For Applicant	Unspecified Financial	Admitted	—	—	—
1.b	Applicant admits that he is indebted to a bank in the amount of $31,245 for a repossessed boat. This boat was purchased by Applicant’s ex-wife during their marriage. His ex-wife retained possession of the boat, did not make payments on the boat, and refused to let the Applicant sell the boat, which is what the divorce court wanted. Eventually it was repossessed. Applicant is in negotiation with the creditor to reach a resolution, and has sent a good-faith payment. $31,245	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Applicant admits that he was indebted to a credit card company in the amount of $12,218. He was sued by this creditor concerning this debt, but the complaint was dismissed by the plaintiff on October 11, 2012. Applicant contacted the credit card company after the hearing and confirmed “this has been withdrawn with no more collection.” $12,218	For Applicant	Credit Card Debt	Admitted	—	—	—
1.d	Applicant denied in his Answer that he is indebted to a creditor in the amount of $1,562 for a credit card debt. Subsequent to the hearing he was able to determine that the credit card was used exclusively by his ex-wife. Applicant states, “the creditor is no longer collecting on the account and has sent me Form 1099-C whereby I am responsible for, and have paid the taxes for 2013.” $1,562	For Applicant	Credit Card Debt	Denied	—	—	—
1.e	Applicant admits that he owes a past-due student loan in the amount of $8,997. He has worked out a payment plan with the owner of the loan and has made his first payment. $8,997	For Applicant	Student Loan Debt	Admitted	—	—	—
1.f	Applicant admits that he is indebted for a past-due gas credit card in the amount of $3,190. This is also the same debt as 1.n, below. He reached a settlement with this creditor and has paid this debt off. $3,190	For Applicant	Credit Card Debt	Admitted	—	—	—
1.g	Applicant admits that he is indebted to a creditor for a past-due account in the amount of $3,664. He testified that he was having issues contacting the current creditor on the account. After the hearing he was able to contact the creditor and determine that this card was used exclusively by his ex-wife, but is still his obligation under the divorce decree. He was unable to resolve this debt, but will revisit it with this creditor in six months 'as other debts pay down.' $3,664	For Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant admits that he is indebted to a creditor for a past-due account in the amount of $8,038. He testified that he was unaware of this debt until after the divorce, since it was his ex-wife’s. He is currently making monthly payments to this creditor for six months, when the debt will be revisited. $8,038	For Applicant	Unspecified Financial	Admitted	—	—	—
1.i	Applicant originally denied that he was indebted to a creditor for a past-due debt in the amount of $58. Subsequent to the hearing he made payment arrangements with the creditor and paid this debt in full. $58	For Applicant	Unspecified Financial	Denied	—	—	—
1.j	Applicant admits that he is indebted to a creditor for a past-due medical debt incurred by his ex-wife in the amount of $1,296. Subsequent to the hearing he made a payment arrangement with this creditor and has begun to make payments on the debt. $1,296	For Applicant	Medical Debt	Admitted	—	—	—
1.k	Applicant originally denied owing a past-due debt in the amount of $314. Subsequent to the hearing he contacted the creditor and settled the account. $314	For Applicant	Unspecified Financial	Denied	—	—	—
1.l	Applicant denied owing a past-due debt for a rental car in the amount of $2,207. He stated he had no knowledge of the debt. Applicant disputed the debt in writing twice to all three of the credit reporting services. Two of the credit reports in evidence refer to his first dispute. He received a response from one of the companies regarding his second dispute stating, 'Based on the information provided to TransUnion, our records show that the information you disputed does not currently appear on your TransUnion credit report.' $2,207	For Applicant	Unspecified Financial	Denied	—	—	—
1.m	Applicant admits that he owed a past-due medical debt incurred by his ex-wife in the amount of $227. He contacted the creditor after the hearing and confirmed that 'this account reflects paid in full.' $227	For Applicant	Medical Debt	Admitted	—	—	—
1.n	This is the same debt as 1.f, above. It is resolved. $3,190	For Applicant	Credit Card Debt	Unknown	—	—	—
1.o	Applicant originally denied this alleged past-due debt in the amount of $91 because he had no knowledge of the account. Subsequent to the hearing he contacted this creditor and paid the debt in full. $91	For Applicant	Unspecified Financial	Denied	—	—	—
1.p	Applicant originally denied this alleged past-due debt in the amount of $80 because he had no knowledge of the account. Subsequent to the hearing he contacted this creditor and paid the debt in full. $80	For Applicant	Unspecified Financial	Denied	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant admits that he is indebted to a bank for $1,284 regarding the end of a lease agreement. He further stated that there was a dispute regarding the amount of this debt and he was attempting to work it out with the creditor. Subsequent to the hearing he made an agreement with this creditor to pay $50 down and $20 a month until debt is resolved. The initial check has been cashed by the creditor.

$1,284

For Applicant

Unspecified Financial

Admitted

—

1.b

Applicant admits that he is indebted to a bank in the amount of $31,245 for a repossessed boat. This boat was purchased by Applicant’s ex-wife during their marriage. His ex-wife retained possession of the boat, did not make payments on the boat, and refused to let the Applicant sell the boat, which is what the divorce court wanted. Eventually it was repossessed. Applicant is in negotiation with the creditor to reach a resolution, and has sent a good-faith payment.

$31,245

For Applicant

Unspecified Financial

Admitted

—

1.c

Applicant admits that he was indebted to a credit card company in the amount of $12,218. He was sued by this creditor concerning this debt, but the complaint was dismissed by the plaintiff on October 11, 2012. Applicant contacted the credit card company after the hearing and confirmed “this has been withdrawn with no more collection.”

$12,218

For Applicant

Credit Card Debt

Admitted

—

1.d

Applicant denied in his Answer that he is indebted to a creditor in the amount of $1,562 for a credit card debt. Subsequent to the hearing he was able to determine that the credit card was used exclusively by his ex-wife. Applicant states, “the creditor is no longer collecting on the account and has sent me Form 1099-C whereby I am responsible for, and have paid the taxes for 2013.”

$1,562

For Applicant

Credit Card Debt

Denied

—

1.e

Applicant admits that he owes a past-due student loan in the amount of $8,997. He has worked out a payment plan with the owner of the loan and has made his first payment.

$8,997

For Applicant

Student Loan Debt

Admitted

—

1.f

Applicant admits that he is indebted for a past-due gas credit card in the amount of $3,190. This is also the same debt as 1.n, below. He reached a settlement with this creditor and has paid this debt off.

$3,190

For Applicant

Credit Card Debt

Admitted

—

1.g

Applicant admits that he is indebted to a creditor for a past-due account in the amount of $3,664. He testified that he was having issues contacting the current creditor on the account. After the hearing he was able to contact the creditor and determine that this card was used exclusively by his ex-wife, but is still his obligation under the divorce decree. He was unable to resolve this debt, but will revisit it with this creditor in six months 'as other debts pay down.'

$3,664

For Applicant

Unspecified Financial

Admitted

—

1.h

Applicant admits that he is indebted to a creditor for a past-due account in the amount of $8,038. He testified that he was unaware of this debt until after the divorce, since it was his ex-wife’s. He is currently making monthly payments to this creditor for six months, when the debt will be revisited.

$8,038

For Applicant

Unspecified Financial

Admitted

—

1.i

Applicant originally denied that he was indebted to a creditor for a past-due debt in the amount of $58. Subsequent to the hearing he made payment arrangements with the creditor and paid this debt in full.

$58

For Applicant

Unspecified Financial

Denied

—

1.j

Applicant admits that he is indebted to a creditor for a past-due medical debt incurred by his ex-wife in the amount of $1,296. Subsequent to the hearing he made a payment arrangement with this creditor and has begun to make payments on the debt.

$1,296

For Applicant

Medical Debt

Admitted

—

1.k

Applicant originally denied owing a past-due debt in the amount of $314. Subsequent to the hearing he contacted the creditor and settled the account.

$314

For Applicant

Unspecified Financial

Denied

—

1.l

Applicant denied owing a past-due debt for a rental car in the amount of $2,207. He stated he had no knowledge of the debt. Applicant disputed the debt in writing twice to all three of the credit reporting services. Two of the credit reports in evidence refer to his first dispute. He received a response from one of the companies regarding his second dispute stating, 'Based on the information provided to TransUnion, our records show that the information you disputed does not currently appear on your TransUnion credit report.'

$2,207

For Applicant

Unspecified Financial

Denied

—

1.m

Applicant admits that he owed a past-due medical debt incurred by his ex-wife in the amount of $227. He contacted the creditor after the hearing and confirmed that 'this account reflects paid in full.'

$227

For Applicant

Medical Debt

Admitted

—

1.n

This is the same debt as 1.f, above. It is resolved.

$3,190

For Applicant

Credit Card Debt

Unknown

—

1.o

Applicant originally denied this alleged past-due debt in the amount of $91 because he had no knowledge of the account. Subsequent to the hearing he contacted this creditor and paid the debt in full.

$91

For Applicant

Unspecified Financial

Denied

—

1.p

Applicant originally denied this alleged past-due debt in the amount of $80 because he had no knowledge of the account. Subsequent to the hearing he contacted this creditor and paid the debt in full.

$80

For Applicant

Unspecified Financial

Denied

—

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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