ISCR Case 15-01043.h1

Case Headnote

ISCR Case No. 15-01043.h1

grantedDec 31, 2015· Hon. Robert Robinson Gales· hearing

Summary

A 47-year-old defense contractor employee was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The applicant's financial difficulties stemmed from unexpected household issues and student loans.

Specific allegations included two consolidated student loan accounts, placed for collection in 2014, with past-due balances of either $39,024 or $39,466 and $5,807, respectively. A bank credit card, with a $250 limit, was sold to a debt purchaser in 2009 after the applicant was out of work due to an automobile accident. The debt purchaser increased the balance to $878.73, which the applicant agreed to pay by January 31, 2016, to satisfy the account. An automobile loan, with a $22,888 remaining balance, became two months past due in February 2015 due to the applicant prioritizing funds for home repairs, but payments resumed in June 2015, and the account is now current. Finally, a department store charge account, reported as charged off in 2008 for $433, was determined to be an error as the applicant had paid it.

The clearance was granted because the applicant demonstrated significant improvement in her financial situation, including a current salary over $90,000. She actively monitored her credit reports, corrected errors with a credit repair service, and made good-faith efforts to repay overdue creditors and resolve debts.

Why the Applicant Prevailed

The applicant's financial situation improved significantly, with a current salary of over $90,000.
She actively monitored her credit reports and corrected errors with the help of a credit repair service.
The applicant demonstrated a good-faith effort to repay overdue creditors and resolve debts.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)rejectedA History of Not Meeting Financial ObligationsThe judge found that the applicant did not establish a history of failing to meet financial obligations.

Mitigating

AG ¶ 20(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to Recur
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling or Evidence of Resolution
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors
AG ¶ 20(e)notedReasonable Basis to Dispute Legitimacy of Debt

Key Rule Quoted

“Eligibility for a security clearance and access to classified information is granted.”

Procedural Posture

SOR issuedAug 5, 2015
Answer filedAug 29, 2015
Hearing heldOct 27, 2015Hearing was postponed one day to allow applicant to prepare.
Decision dateDec 31, 2015

Cite For

Mitigation of Financial Concerns Under Guideline F
Good-faith Efforts to Resolve Debts
Impact of Unexpected Financial Circumstances on Security Clearance Eligibility

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	These are a direct unsubsidized consolidated student loan account with a high credit of $29,616 and a past-due balance of either $39,024 or $39,466; and a direct subsidized consolidated student loan account with a high credit of $4,451 and a past-due balance of $5,807. They were placed for collection in 2014 and transferred. $39,024	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts	(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	Claimed Debt Paid in Full
1.b	These are a direct unsubsidized consolidated student loan account with a high credit of $29,616 and a past-due balance of either $39,024 or $39,466; and a direct subsidized consolidated student loan account with a high credit of $4,451 and a past-due balance of $5,807. They were placed for collection in 2014 and transferred. $5,807	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts	(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	Claimed Debt Paid in Full
1.c	This is a bank credit card with a credit limit of $250 and a high credit of $441 that was placed for collection and sold to a debt purchaser in 2009 after Applicant was involved in an automobile accident and out of work for several weeks. The debt purchaser increased the unpaid balance, first to $841, and then to $878.73. Applicant contacted the debt purchaser and it was agreed that Applicant would pay $878.73, on or before January 31, 2016, to satisfy and close the account. $878	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts	(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	Claimed Debt Paid in Full
1.d	This is an automobile loan with a high credit of $34,461 and remaining balance of $22,888 that became two months past due in February 2015, but was never placed for collection. Applicant fell behind in her payments when she had to prioritize her allocation of funds first to the two major appliances and a new air conditioner in her residence. She resumed making payments in June 2015, and the account is now current. $22,888	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts	(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	Claimed Debt Paid in Full
1.e	This is a department store charge account with a credit limit of $165 and high credit of $433 that was reported as charged off in the amount of $433 in August 2008. The report was in error. Applicant had paid the account on August 18, 2008, seven years before the SOR was issued. $433	For Applicant	Unspecified Financial	Admitted	—	(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	Claimed Debt Paid in Full
1.f	specific text not stated in this decision	Withdrawn	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

These are a direct unsubsidized consolidated student loan account with a high credit of $29,616 and a past-due balance of either $39,024 or $39,466; and a direct subsidized consolidated student loan account with a high credit of $4,451 and a past-due balance of $5,807. They were placed for collection in 2014 and transferred.

$39,024

For Applicant

Student Loan Debt

Admitted

(a) inability to satisfy debts

(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

Claimed

Debt Paid in Full

1.b

$5,807

For Applicant

Student Loan Debt

Admitted

(a) inability to satisfy debts

(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

Claimed

Debt Paid in Full

1.c

This is a bank credit card with a credit limit of $250 and a high credit of $441 that was placed for collection and sold to a debt purchaser in 2009 after Applicant was involved in an automobile accident and out of work for several weeks. The debt purchaser increased the unpaid balance, first to $841, and then to $878.73. Applicant contacted the debt purchaser and it was agreed that Applicant would pay $878.73, on or before January 31, 2016, to satisfy and close the account.

$878

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(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

Claimed

Debt Paid in Full

1.d

This is an automobile loan with a high credit of $34,461 and remaining balance of $22,888 that became two months past due in February 2015, but was never placed for collection. Applicant fell behind in her payments when she had to prioritize her allocation of funds first to the two major appliances and a new air conditioner in her residence. She resumed making payments in June 2015, and the account is now current.

$22,888

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(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

Claimed

Debt Paid in Full

1.e

This is a department store charge account with a credit limit of $165 and high credit of $433 that was reported as charged off in the amount of $433 in August 2008. The report was in error. Applicant had paid the account on August 18, 2008, seven years before the SOR was issued.

$433

For Applicant

Unspecified Financial

Admitted

—

(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

Claimed

Debt Paid in Full

1.f

specific text not stated in this decision

Withdrawn

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