Summary
The applicant, a DOD contractor with a Master's degree and three children, faced security clearance denial under Guideline F due to a history of financial irresponsibility, including multiple bankruptcies and significant delinquent debts. Despite claims of mitigating circumstances, the judge found insufficient evidence of financial stability or responsible management of debts, leading to the denial of her security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant filed for Chapter 13 bankruptcy in October 2014. The bankruptcy was dismissed in May 2015 (1.b). Applicant filed for Chapter 7 bankruptcy in March 2005. Her debts were discharged by the bankruptcy court in August 2005 (1.c). a $10,741 federal tax debt owed to the Internal Revenue Service (IRS) for tax years 2013 and 2014 (1.d). a $557 county tax debt for 2015 personal property taxes (1.e). a $7,440 judgment filed against Applicant in 2010 (1.f). an $859 judgment filed against Applicant in 2008 (1.g). a $410 gym account placed for collection (1.h). a $423 charged-off account (1.k). a $1,109 department store account placed for collection (1.l). a $422 telephone account placed for collection (1.m). four traffic ticket fines placed for collection in the amounts of $250, $300, $205, and $250 (1.n). four medical accounts placed for collection in the amounts of $29, $104, $113, and $113 (1.r). a $242 insurance debt placed for collection (1.s). two cable television accounts placed for collection in the amounts of $135 each (1.t). a $35 credit union debt placed for collection (1.w).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c). The judge applied mitigating conditions AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d). The decision turned on the following: The applicant has a long history of financial irresponsibility, including two Chapter 7 bankruptcies and one Chapter 13 bankruptcy within ten years; The applicant failed to demonstrate a consistent track record of financial responsibility after her debts were discharged in bankruptcy; The applicant's financial issues were exacerbated by her failure to address delinquent accounts after being made aware of them during her background investigation.
Why the Applicant Was Denied
- The applicant has a long history of financial irresponsibility, including two Chapter 7 bankruptcies and one Chapter 13 bankruptcy within ten years.
- The applicant failed to demonstrate a consistent track record of financial responsibility after her debts were discharged in bankruptcy.
- The applicant's financial issues were exacerbated by her failure to address delinquent accounts after being made aware of them during her background investigation.
Conditions Referenced
- AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)appliedHistory of Not Meeting Financial Obligations
- AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlCircumstances such as lack of child support and a reduction in hours contributed to financial issues.
- AG ¶ 20(c)appliedReceiving Counseling for the ProblemThe applicant attended financial counseling in conjunction with her bankruptcy filing.
- AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue CreditorsThe applicant entered a repayment plan for her federal tax debt.
Key Rule Quoted
“An applicant is not required to be debt free, but is required to manage her finances in such a way as to meet her financial obligations.”
Procedural Posture
- SOR issuedNov 4, 2015
- Answer filedNov 16, 2015Requested decision on the record.
- Hearing held—Decision based on written record.
- Decision dateApr 29, 2016
Cite For
- Financial Irresponsibility Leading to Security Clearance Denial Under Guideline F
- Impact of Multiple Bankruptcies on Security Clearance Eligibility
- Consideration of Mitigating Circumstances in Financial Issues for Security Clearance Cases