ISCR Case 14-01078.h1

Case Headnote

ISCR Case No. 14-01078.h1

grantedOct 30, 2014· Hon. Arthur E. Marshall, Jr.· hearing

Summary

A 58-year-old senior electrical technician was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant had several delinquent debts, but the judge found that he had successfully addressed these issues and posed no current risk.

Specifically, a $514 debt from July 2013 was paid after the lender admitted sending bills to a wrong address and reduced the amount owed. A $1,301 debt from December 2010, related to a timeshare, was satisfied when the applicant and his wife surrendered their benefit to the development company due to her disability and his fluctuating salary. Two debts, for $3,696 and $9,127, both delinquent since December 2010 and 2013 respectively, were formally disputed as arising from the same timeshare obligation, which the applicant agreed to satisfy for the lower amount once the higher claim was resolved. Finally, a $1,414 state tax obligation from April 2013 was in repayment, with the applicant having made at least half of the payments and committed to completing the agreement.

The decision to grant the clearance was based on the applicant's demonstrated commitment to resolving his debts through financial counseling and repayment plans. His financial difficulties were largely attributed to circumstances beyond his control, such as his wife's disability, and he consistently showed efforts to live within his means.

Why the Applicant Prevailed

The applicant demonstrated a commitment to resolving delinquent debts through financial counseling and repayment plans.
The applicant's financial difficulties were largely due to circumstances beyond his control, including layoffs and his wife's disability.
The applicant has shown a consistent effort to live within his means and has successfully mitigated the financial concerns raised.

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)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
AG ¶ 20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)appliedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the 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 issuedMay 12, 2014
Answer filedMay 21, 2014Applicant admitted all allegations.
Hearing heldSep 11, 2014
Decision dateOct 30, 2014

Cite For

Mitigation of Financial Issues Under Guideline F
Consideration of Circumstances Beyond an Applicant's Control
Importance of Financial Counseling in Security Clearance Cases

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	$514 delinquent since July 2013. Paid. This account was closed when Applicant relocated in 2006. Applicant guesses that an automatic withdrawal went through after he closed this account and before his new account elsewhere was established. Tr. 28-29. Applicant was unaware of the debt until he was interviewed by investigators in January 2014. The lender admitted it sent the bill to a wrong address and reduced the debt to the actual amount owed ($309). Ex. A; Tr. 30-31. Applicant’s evidence does not reflect the same account number as the one noted in Applicant’s credit report, but collection account numbers often vary. Moreover, Applicant’s evidence otherwise indicates a debt with this same lender for $513.68 was resolved for $309. Further, Applicant has had only one account with that lender. Tr. 31-32. I find that there is sufficient evidence to conclude that this debt was recently resolved. $514	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	$1,301 delinquent since December 2010. Satisfied. This debt is associated with a timeshare Applicant and his wife owned before she became disabled. When they could no longer make payments on the timeshare due to her lack of income and his fluctuating salary, they cancelled their timeshare contract and surrendered their benefit to the development company. Applicant provided evidence of this transfer of timeshare benefit back to the developer, which notes that collections activities have been stopped. Ex. B. This account has the same number as the one noted in the credit report. Tr. 33-35. $1,301	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	$3,696 delinquent since December 2010 and $9,127 delinquent since December 2013. Formally Disputed. Applicant persuasively argued that these two debts are for the same obligation. They arise from a debt related to another timeshare. Applicant cancelled this timeshare when his wife became disabled. Tr. 36. This should have left him with a debt to the timeshare company of about $3,600, which Applicant agrees to satisfy. One of the company’s other financing arms, however, pursued its own claim after Applicant for $9,127, which Applicant formally disputed 2010. Tr. 37-44; Ex. C. After the hearing, Applicant submitted materials reinforcing his argument that these are two claims for the same debt, and noting questionable practices by the second lender pursuing the higher claim against him. Tr. 41-43; Ex. L. Applicant will pay the $3,696 balance after the claim for $9,127 is resolved. Tr. 41, 46.	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.d	$3,696 delinquent since December 2010 and $9,127 delinquent since December 2013. Formally Disputed. Applicant persuasively argued that these two debts are for the same obligation. They arise from a debt related to another timeshare. Applicant cancelled this timeshare when his wife became disabled. Tr. 36. This should have left him with a debt to the timeshare company of about $3,600, which Applicant agrees to satisfy. One of the company’s other financing arms, however, pursued its own claim after Applicant for $9,127, which Applicant formally disputed 2010. Tr. 37-44; Ex. C. After the hearing, Applicant submitted materials reinforcing his argument that these are two claims for the same debt, and noting questionable practices by the second lender pursuing the higher claim against him. Tr. 41-43; Ex. L. Applicant will pay the $3,696 balance after the claim for $9,127 is resolved. Tr. 41, 46.	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (e) reasonable, documented basis to dispute the debt	Claimed Debt Disputed with Creditor
1.e	$1,414 state tax obligation delinquent since April 2013. In repayment. Applicant learned of this tax year 2011 underpayment as he struggled to pay his son’s state college tuition in early 2013, just after Applicant’s salary hit its nadir. Tr. 53. His son resorted to taking student loans to help with the state school bills, and got an on-campus job, to lessen the financial burden on Applicant. Applicant then sought financial counseling and worked with a community tax advisor to set up a repayment plan with the state. Tr. 54. Applicant has not yet received a copy of the agreement from the state. He did, however, provide evidence of his first two payments. The first payment for $350 is noted at Ex. D. His second payment is reflected in Ex. L at 2. Consequently, to date, he has satisfied at least half of the obligation. See also Ex. D. The entire bill should be satisfied in the next two months. Applicant is committed to completing this agreement and has the financial resources to do so expediently. Tr. 54-56; 59. $1,414	For Applicant	Tax Unpaid	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	Documented Payment Plan with IRS

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

$514 delinquent since July 2013. Paid. This account was closed when Applicant relocated in 2006. Applicant guesses that an automatic withdrawal went through after he closed this account and before his new account elsewhere was established. Tr. 28-29. Applicant was unaware of the debt until he was interviewed by investigators in January 2014. The lender admitted it sent the bill to a wrong address and reduced the debt to the actual amount owed ($309). Ex. A; Tr. 30-31. Applicant’s evidence does not reflect the same account number as the one noted in Applicant’s credit report, but collection account numbers often vary. Moreover, Applicant’s evidence otherwise indicates a debt with this same lender for $513.68 was resolved for $309. Further, Applicant has had only one account with that lender. Tr. 31-32. I find that there is sufficient evidence to conclude that this debt was recently resolved.

$514

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

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

Documented

Debt Paid in Full

1.b

$1,301 delinquent since December 2010. Satisfied. This debt is associated with a timeshare Applicant and his wife owned before she became disabled. When they could no longer make payments on the timeshare due to her lack of income and his fluctuating salary, they cancelled their timeshare contract and surrendered their benefit to the development company. Applicant provided evidence of this transfer of timeshare benefit back to the developer, which notes that collections activities have been stopped. Ex. B. This account has the same number as the one noted in the credit report. Tr. 33-35.

$1,301

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

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

Documented

Debt Paid in Full

1.c

$3,696 delinquent since December 2010 and $9,127 delinquent since December 2013. Formally Disputed. Applicant persuasively argued that these two debts are for the same obligation. They arise from a debt related to another timeshare. Applicant cancelled this timeshare when his wife became disabled. Tr. 36. This should have left him with a debt to the timeshare company of about $3,600, which Applicant agrees to satisfy. One of the company’s other financing arms, however, pursued its own claim after Applicant for $9,127, which Applicant formally disputed 2010. Tr. 37-44; Ex. C. After the hearing, Applicant submitted materials reinforcing his argument that these are two claims for the same debt, and noting questionable practices by the second lender pursuing the higher claim against him. Tr. 41-43; Ex. L. Applicant will pay the $3,696 balance after the claim for $9,127 is resolved. Tr. 41, 46.

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.d

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

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

(e) reasonable, documented basis to dispute the debt

Claimed

Debt Disputed with Creditor

1.e

$1,414 state tax obligation delinquent since April 2013. In repayment. Applicant learned of this tax year 2011 underpayment as he struggled to pay his son’s state college tuition in early 2013, just after Applicant’s salary hit its nadir. Tr. 53. His son resorted to taking student loans to help with the state school bills, and got an on-campus job, to lessen the financial burden on Applicant. Applicant then sought financial counseling and worked with a community tax advisor to set up a repayment plan with the state. Tr. 54. Applicant has not yet received a copy of the agreement from the state. He did, however, provide evidence of his first two payments. The first payment for $350 is noted at Ex. D. His second payment is reflected in Ex. L at 2. Consequently, to date, he has satisfied at least half of the obligation. See also Ex. D. The entire bill should be satisfied in the next two months. Applicant is committed to completing this agreement and has the financial resources to do so expediently. Tr. 54-56; 59.

$1,414

For Applicant

Tax Unpaid

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

Documented

Payment Plan with IRS

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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