ISCR Case 15-01534.h1

Case Headnote

ISCR Case No. 15-01534.h1

grantedApr 28, 2016· Hon. James F. Duffy· hearing

Summary

A 54-year-old defense contractor and retired U.S. Navy veteran was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons cited 20 delinquent debts totaling $51,977, a dismissed Chapter 13 bankruptcy, and unfiled tax returns for 2008 and 2009.

Specific allegations included multiple medical and utility debts, several vehicle and trailer loan deficiencies from repossessions, and communications service debts. The applicant provided evidence of payment for 11 of these debts, including a $926 medical debt, a $314 utility debt, and a $262 communications service debt, all paid in October 2015. Other debts were resolved through settlement agreements, or the applicant was informed no further amount was owed. He also disputed several debts, including a $6,630 mobile trailer loan and a $773 cable TV debt. His 2007 Chapter 13 bankruptcy was dismissed in 2008.

The judge found that the applicant successfully mitigated these concerns. He demonstrated a stable financial situation with a combined annual income of approximately $150,000. He consistently made payments on past-due state income taxes and showed a commitment to resolving his delinquent debts, having paid off 11 and successfully disputed others.

Why the Applicant Prevailed

The applicant demonstrated a stable financial situation with a combined annual income of approximately $150,000.
He consistently made payments under a repayment plan for past-due state income taxes, reducing the balance significantly.
The applicant showed commitment to resolving his delinquent debts, having paid off 11 debts and disputed others successfully.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required

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 Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedReceived Counseling for the Problem And/or Clear Indications That the Problem Is Being Resolved
AG ¶ 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors or Resolve Debts
AG ¶ 20(e)appliedHas a Reasonable Basis to Dispute the Legitimacy of the Past Due Debt

Key Rule Quoted

“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”

Procedural Posture

SOR issuedSep 14, 2015
Answer filedOct 8, 2015
Hearing heldFeb 23, 2016
Decision dateApr 28, 2016

Cite For

Mitigation of Financial Issues Under Guideline F
Stability in Financial Circumstances as a Factor in Security Clearance Decisions
The Impact of Personal Circumstances on Financial Obligations and 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	$6,630 Mobile trailer loan with a date of last activity of December 2009. Applicant claimed he owed $4,200 on the trailer when it was voluntarily repossessed during his divorce. He assumed it was then resold and was not informed of a loan deficiency. Upon learning of the negative credit report entry, he contacted the creditor in an attempt to obtain information about whether the trailer was resold and, if so, for what amount. The creditor failed to respond to his requests for information and indicated they have no paperwork on the debt. He has disputed this debt. $6,630	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	Claimed Debt Disputed with Creditor
1.b	$4,503 Vehicle loan with a date of last activity of December 2010. This vehicle was voluntarily repossessed after Applicant broke his back and could not afford the payments. In about 2012, he contacted the creditor and was told the debt was charged off. It no longer appears on his most recent credit reports. $4,503	For Applicant	Auto 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 (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Disputed with Creditor
1.c	$1,131 Medical debt with a date of last activity of October 2013. Applicant believed he set up a repayment plan for this debt, but later realized his automatic debit request was not processed. In his post-hearing submission, he provided a bank statement indicating it contained a payment towards this debt, but an examination of that payment reflected it went toward a non-alleged debt. $1,131	For Applicant	Medical 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 (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Disputed with Creditor
1.d	$926 Medical debt with a date of last activity of October 2013. Applicant established a settlement agreement for this debt and provided a bank statement showing it was paid in October 2015. $926	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.e	$314 Utility debt with a date of last activity of November 2011. Applicant provided a bank statement showing it was paid in October 2015. $314	For Applicant	Utility or Phone Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.f	$262 Communications service debt with a date last activity of March 2014. Applicant provided a bank statement showing it was paid in October 2015. $262	For Applicant	Utility or Phone Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.g	$51 Medical debt with a date of last activity of October 2013. Applicant provided a bank statement showing it was paid in October 2015. $51	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.h	Filed Chapter 13 bankruptcy in 2007, which was dismissed in 2008.	For Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	$29,651 Vehicle loan with a date of last activity of October 2007. This vehicle was voluntarily repossessed during Applicant’s bankruptcy. He claimed that he owed less on the vehicle than its fair market value and pointed out that it no longer appears on his most recent credit reports. He also testified that he contacted the creditor about this debt and was informed that he did not owe anything further. $29,651	For Applicant	Auto 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 (d) good-faith effort to repay or otherwise resolve debts	Claimed Debt Disputed with Creditor
1.j	$172 Communications service debt with a date of last activity of February 2011. Applicant provided a bank statement showing it was paid in September 2015. $172	For Applicant	Utility or Phone Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.k	$1,147 Credit card debt with a date of last activity of September 2011. Applicant contacted the creditor and was advised he did not owe anything on this debt. It no longer appears on his most recent credit reports. He also provided proof the same company later issued him another credit card. $1,147	For Applicant	Credit Card Debt	Admitted	—	—	—
1.l	$98 Medical debt with a date of last activity of April 2013. Applicant called the creditor and was advised this debt was removed from their system in 2013 and he did not owe anything further. $98	For Applicant	Medical Debt	Admitted	—	—	—
1.m	$196 Debt to a city with a date of last activity of March 2010. Applicant believed he set up a repayment plan for this debt, but later realized the automatic debit request was not processed. In his post-hearing submission, he provided a bank statement showing it was paid in February 2016. $196	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.n	$508 Utility debt with a date of last activity of February 2011. He testified he paid this bill. As proof, he provided a bill showing that the utility company later issued him a new account. $508	For Applicant	Utility or Phone Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.o	$60 Medical debt with a date of last activity of January 2012. Applicant established a settlement agreement for this debt and provided a bank statement showing it was paid in October 2015. $60	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.p	$66 Medical debt with a date of last activity of March 2012. Applicant provided a bank statement showing it was paid in October 2015. $66	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.q	$137 Medical debt with a date of last activity of April 2012. Applicant provided a bank statement showing it was paid in October 2015. $137	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.r	$96 Insurance debt with a date of last activity of May 2012. Applicant testified that he contacted the creditor and paid this bill. It is not reflected on his most recent credit reports. $96	For Applicant	Unspecified Financial	Admitted	—	—	—
1.s	$773 Cable TV debt with a date of last activity of April 2013. Applicant testified he returned the cable box contrary to the creditor’s claim. He disputed this debt. It is not reflected on his most recent credit reports. $773	For Applicant	Unspecified Financial	Admitted	—	—	Claimed Debt Disputed with Creditor
1.t	$166 Medical debt assigned for collection in February 2013. Applicant claimed he contacted the creditor and was informed they no longer had a record of this debt. It is not reflected on his most recent credit reports. $166	For Applicant	Medical Debt	Admitted	—	—	Claimed Debt Disputed with Creditor
1.u	$5,090 This is a duplicate of the debt alleged in SOR ¶ 1.a $5,090	For Applicant	Unspecified Financial	Unknown	—	—	—
1.v	Failed to file his 2008 federal income tax return as required.	For Applicant	Tax Filing Failure	Admitted	(g) unexplained affluence	—	—
1.w	Failed to file his 2009 state income tax return as required.	For Applicant	Tax Filing Failure	Admitted	(g) unexplained affluence	—	—
1.x	Failed to pay his state income taxes for 2009.	For Applicant	Tax Unpaid	Admitted	(g) unexplained affluence	—	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

$6,630 Mobile trailer loan with a date of last activity of December 2009. Applicant claimed he owed $4,200 on the trailer when it was voluntarily repossessed during his divorce. He assumed it was then resold and was not informed of a loan deficiency. Upon learning of the negative credit report entry, he contacted the creditor in an attempt to obtain information about whether the trailer was resold and, if so, for what amount. The creditor failed to respond to his requests for information and indicated they have no paperwork on the debt. He has disputed this debt.

$6,630

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

Claimed

Debt Disputed with Creditor

1.b

$4,503 Vehicle loan with a date of last activity of December 2010. This vehicle was voluntarily repossessed after Applicant broke his back and could not afford the payments. In about 2012, he contacted the creditor and was told the debt was charged off. It no longer appears on his most recent credit reports.

$4,503

For Applicant

Auto 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

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

Claimed

Debt Disputed with Creditor

1.c

$1,131 Medical debt with a date of last activity of October 2013. Applicant believed he set up a repayment plan for this debt, but later realized his automatic debit request was not processed. In his post-hearing submission, he provided a bank statement indicating it contained a payment towards this debt, but an examination of that payment reflected it went toward a non-alleged debt.

$1,131

For Applicant

Medical 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

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

Claimed

Debt Disputed with Creditor

1.d

$926 Medical debt with a date of last activity of October 2013. Applicant established a settlement agreement for this debt and provided a bank statement showing it was paid in October 2015.

$926

For Applicant

Medical Debt

Admitted

—

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

Documented

Debt Paid in Full

1.e

$314 Utility debt with a date of last activity of November 2011. Applicant provided a bank statement showing it was paid in October 2015.

$314

For Applicant

Utility or Phone Debt

Admitted

—

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

Documented

Debt Paid in Full

1.f

$262 Communications service debt with a date last activity of March 2014. Applicant provided a bank statement showing it was paid in October 2015.

$262

For Applicant

Utility or Phone Debt

Admitted

—

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

Documented

Debt Paid in Full

1.g

$51 Medical debt with a date of last activity of October 2013. Applicant provided a bank statement showing it was paid in October 2015.

$51

For Applicant

Medical Debt

Admitted

—

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

Documented

Debt Paid in Full

1.h

Filed Chapter 13 bankruptcy in 2007, which was dismissed in 2008.

For Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

$29,651 Vehicle loan with a date of last activity of October 2007. This vehicle was voluntarily repossessed during Applicant’s bankruptcy. He claimed that he owed less on the vehicle than its fair market value and pointed out that it no longer appears on his most recent credit reports. He also testified that he contacted the creditor about this debt and was informed that he did not owe anything further.

$29,651

For Applicant

Auto 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

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

Claimed

Debt Disputed with Creditor

1.j

$172 Communications service debt with a date of last activity of February 2011. Applicant provided a bank statement showing it was paid in September 2015.

$172

For Applicant

Utility or Phone Debt

Admitted

—

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

Documented

Debt Paid in Full

1.k

$1,147 Credit card debt with a date of last activity of September 2011. Applicant contacted the creditor and was advised he did not owe anything on this debt. It no longer appears on his most recent credit reports. He also provided proof the same company later issued him another credit card.

$1,147

For Applicant

Credit Card Debt

Admitted

—

1.l

$98 Medical debt with a date of last activity of April 2013. Applicant called the creditor and was advised this debt was removed from their system in 2013 and he did not owe anything further.

$98

For Applicant

Medical Debt

Admitted

—

1.m

$196 Debt to a city with a date of last activity of March 2010. Applicant believed he set up a repayment plan for this debt, but later realized the automatic debit request was not processed. In his post-hearing submission, he provided a bank statement showing it was paid in February 2016.

$196

For Applicant

Unspecified Financial

Admitted

—

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

Documented

Debt Paid in Full

1.n

$508 Utility debt with a date of last activity of February 2011. He testified he paid this bill. As proof, he provided a bill showing that the utility company later issued him a new account.

$508

For Applicant

Utility or Phone Debt

Admitted

—

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

Documented

Debt Paid in Full

1.o

$60 Medical debt with a date of last activity of January 2012. Applicant established a settlement agreement for this debt and provided a bank statement showing it was paid in October 2015.

$60

For Applicant

Medical Debt

Admitted

—

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

Documented

Debt Paid in Full

1.p

$66 Medical debt with a date of last activity of March 2012. Applicant provided a bank statement showing it was paid in October 2015.

$66

For Applicant

Medical Debt

Admitted

—

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

Documented

Debt Paid in Full

1.q

$137 Medical debt with a date of last activity of April 2012. Applicant provided a bank statement showing it was paid in October 2015.

$137

For Applicant

Medical Debt

Admitted

—

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

Documented

Debt Paid in Full

1.r

$96 Insurance debt with a date of last activity of May 2012. Applicant testified that he contacted the creditor and paid this bill. It is not reflected on his most recent credit reports.

$96

For Applicant

Unspecified Financial

Admitted

—

1.s

$773 Cable TV debt with a date of last activity of April 2013. Applicant testified he returned the cable box contrary to the creditor’s claim. He disputed this debt. It is not reflected on his most recent credit reports.

$773

For Applicant

Unspecified Financial

Admitted

—

Claimed

Debt Disputed with Creditor

1.t

$166 Medical debt assigned for collection in February 2013. Applicant claimed he contacted the creditor and was informed they no longer had a record of this debt. It is not reflected on his most recent credit reports.

$166

For Applicant

Medical Debt

Admitted

—

Claimed

Debt Disputed with Creditor

1.u

$5,090 This is a duplicate of the debt alleged in SOR ¶ 1.a

$5,090

For Applicant

Unspecified Financial

Unknown

—

1.v

Failed to file his 2008 federal income tax return as required.

For Applicant

Tax Filing Failure

Admitted

(g) unexplained affluence

—

1.w

Failed to file his 2009 state income tax return as required.

For Applicant

Tax Filing Failure

Admitted

(g) unexplained affluence

—

1.x

Failed to pay his state income taxes for 2009.

For Applicant

Tax Unpaid

Admitted

(g) unexplained affluence

—

Documented

Debt Paid in Full

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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

DECISION

FOOTNOTES