ISCR Case 03-03079.h1

Case Headnote

ISCR Case No. 03-03079.h1

grantedAug 4, 2005· Hon. Wilford H. Ross· hearing

Summary

A 32-year-old Operations Manager for a defense contractor was granted a security clearance despite concerns under Guideline F (Financial Considerations). The Applicant's financial difficulties primarily stemmed from a 2001 divorce, during which he gained full custody of his daughter and earned $18,000 annually. By 2004, his income rose to $41,000, and by July 2005, it reached approximately $60,000.

The Statement of Reasons detailed several alleged debts. The government did not prove two debts totaling $336 and $380, and another for $145 was shown as paid. One debt of $888 was resolved through a settlement. However, the Applicant admitted to several outstanding past-due accounts, including $779.35, $507.88, $2,226.94, and $1,707.57 with various creditors. Other admitted debts, such as an $8,111 bank balance after an auto resale, a $468.82 telephone bill, a $296 telephone bill, and a $2,300 credit card debt (now $5,318), lacked evidence of resolution. The Applicant was also past due on a student loan but was making current payments.

The clearance was granted because the Applicant's financial situation had stabilized, and he demonstrated significant efforts to address his overdue debts. Most of the past-due debts were incurred during the period of personal hardship following his divorce, rather than recently. The Applicant showed a good-faith effort to resolve his financial obligations and maintain current payments.

Why the Applicant Prevailed

The Applicant's financial situation has stabilized, and he has made efforts to pay off overdue debts.
Most past due debts were incurred during a period of personal hardship (divorce) and are not recent.
The Applicant has shown a good-faith effort to resolve his debts and maintain current payments.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedA History of Not Meeting Financial Obligations

Mitigating

E2.A6.1.3.1appliedThe Conditions That Resulted in the Behavior Were Largely Beyond the Person's Control (e.g., Divorce)
E2.A6.1.3.6appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“The Administrative Judge can only draw those inferences or conclusions that have a reasonable and logical basis in the evidence of record.”

Procedural Posture

SOR issuedFeb 3, 2004
Answer filedMar 26, 2004Requested decision without a hearing.
Hearing held—Decision made without a hearing.
Decision dateAug 4, 2005

Cite For

Mitigation of Financial Issues Due to Personal Hardship Under Guideline F
Good-faith Efforts to Resolve Debts as a Mitigating Factor
Stability in Financial Situation as a Basis for Granting Clearance

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	The Applicant admitted that he was indebted to this department store in the amount of $336.00 on a past due account. However, an analysis of the exhibits shows that, while the account was charged off, the $336.00 figure was the credit limit. The 2004 and 2005 credit reports do not show a past due figure for this account. Notwithstanding his admission, the Government has not proved this debt. $336	For Applicant	Unspecified Financial	Admitted	—	—	—
1.b	The Applicant denied owing the Defense Finance and Accounting Service $380.00. This debt does not appear in the 2004 and 2005 credit reports. The Government submitted no information, other than a 2002 credit report, to support this allegation. $380	For Applicant	Unspecified Financial	Denied	—	—	—
1.c	The Applicant admitted owing this creditor $888.00 on a past due account. Item 9 at page 2 states regarding this creditor, 'Settlement accepted on this account.' Accordingly, I find that this debt has been resolved. $888	For Applicant	Unspecified Financial	Admitted	—	—	—
1.d	The Applicant admitted owing this creditor $779.35 on a past due account. The 2005 credit report shows that this debt is still outstanding. $779	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.e	The Applicant admitted owing this creditor $507.88 on a past due account. The 2005 credit report shows that this debt is still outstanding. $507	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.f	The Applicant admitted owing this department store $2,226.94 on a past due account. The 2005 credit report shows that this debt is still outstanding. $2,226	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	The Applicant admitted owing this department store $1,707.57 on a past due account. The 2005 credit report shows that this debt is still outstanding. $1,707	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	The Applicant admitted owing this bank $8,111.00, the balance owed after resale of an automobile. This debt does not appear in the 2004 or 2005 credit reports. However, there is no evidence that the debt has been resolved. $8,111	Against Applicant	Auto Loan Debt	Admitted	—	—	—
1.i	The Applicant admitted owing this telephone company $468.82 on a past due account. This debt does not appear in the 2004 or 2005 credit reports. The 2005 credit report indicates that the Applicant has an unpaid telephone bill in the amount of $77.00. This may be the debt set forth in this subparagraph or 1.k. $468	Against Applicant	Utility or Phone Debt	Admitted	—	—	—
1.j	The Applicant denied owing this debt in the amount of $145.00. Item 9 at 1 shows this item as 'Paid.' $145	For Applicant	Unspecified Financial	Denied	—	—	—
1.k	The Applicant admitted owing this telephone company $296.00 on a past due account. This debt does not appear in the 2004 or 2005 credit reports. The 2005 credit report indicates that the Applicant has an unpaid telephone bill in the amount of $77.00. This may be the debt set forth in this subparagraph or 1.i. $296	Against Applicant	Utility or Phone Debt	Admitted	—	—	—
1.l	The Applicant admitted owing this credit card company $2,300.00 on a past due account. It appears that this debt has been transferred or sold. Item 9 at page 2 shows the current balance to be $5,318.00. There is no evidence that the debt has been resolved. $2,300	Against Applicant	Credit Card Debt	Admitted	—	—	—
1.m	The Applicant admitted that he was past due on a student loan. Item 9 at 3 shows that he is making current payments on his student loan.	For Applicant	Student Loan Debt	Admitted	—	—	—
1.n	The Applicant was divorced in 2001. He was awarded full custody of his young daughter at that time. In 2001, he was making $18,000.00 a year. By the time the Answer to the SOR was filed in March 2004, he was making $41,000.00 a year. As of July 13, 2005, the Applicant states he is making approximately $60,000.00 a year.	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The Applicant admitted that he was indebted to this department store in the amount of $336.00 on a past due account. However, an analysis of the exhibits shows that, while the account was charged off, the $336.00 figure was the credit limit. The 2004 and 2005 credit reports do not show a past due figure for this account. Notwithstanding his admission, the Government has not proved this debt.

$336

For Applicant

Unspecified Financial

Admitted

—

1.b

The Applicant denied owing the Defense Finance and Accounting Service $380.00. This debt does not appear in the 2004 and 2005 credit reports. The Government submitted no information, other than a 2002 credit report, to support this allegation.

$380

For Applicant

Unspecified Financial

Denied

—

1.c

The Applicant admitted owing this creditor $888.00 on a past due account. Item 9 at page 2 states regarding this creditor, 'Settlement accepted on this account.' Accordingly, I find that this debt has been resolved.

$888

For Applicant

Unspecified Financial

Admitted

—

1.d

The Applicant admitted owing this creditor $779.35 on a past due account. The 2005 credit report shows that this debt is still outstanding.

$779

Against Applicant

Unspecified Financial

Admitted

—

1.e

The Applicant admitted owing this creditor $507.88 on a past due account. The 2005 credit report shows that this debt is still outstanding.

$507

Against Applicant

Unspecified Financial

Admitted

—

1.f

The Applicant admitted owing this department store $2,226.94 on a past due account. The 2005 credit report shows that this debt is still outstanding.

$2,226

Against Applicant

Unspecified Financial

Admitted

—

1.g

The Applicant admitted owing this department store $1,707.57 on a past due account. The 2005 credit report shows that this debt is still outstanding.

$1,707

Against Applicant

Unspecified Financial

Admitted

—

1.h

The Applicant admitted owing this bank $8,111.00, the balance owed after resale of an automobile. This debt does not appear in the 2004 or 2005 credit reports. However, there is no evidence that the debt has been resolved.

$8,111

Against Applicant

Auto Loan Debt

Admitted

—

1.i

The Applicant admitted owing this telephone company $468.82 on a past due account. This debt does not appear in the 2004 or 2005 credit reports. The 2005 credit report indicates that the Applicant has an unpaid telephone bill in the amount of $77.00. This may be the debt set forth in this subparagraph or 1.k.

$468

Against Applicant

Utility or Phone Debt

Admitted

—

1.j

The Applicant denied owing this debt in the amount of $145.00. Item 9 at 1 shows this item as 'Paid.'

$145

For Applicant

Unspecified Financial

Denied

—

1.k

The Applicant admitted owing this telephone company $296.00 on a past due account. This debt does not appear in the 2004 or 2005 credit reports. The 2005 credit report indicates that the Applicant has an unpaid telephone bill in the amount of $77.00. This may be the debt set forth in this subparagraph or 1.i.

$296

Against Applicant

Utility or Phone Debt

Admitted

—

1.l

The Applicant admitted owing this credit card company $2,300.00 on a past due account. It appears that this debt has been transferred or sold. Item 9 at page 2 shows the current balance to be $5,318.00. There is no evidence that the debt has been resolved.

$2,300

Against Applicant

Credit Card Debt

Admitted

—

1.m

The Applicant admitted that he was past due on a student loan. Item 9 at 3 shows that he is making current payments on his student loan.

For Applicant

Student Loan Debt

Admitted

—

1.n

The Applicant was divorced in 2001. He was awarded full custody of his young daughter at that time. In 2001, he was making $18,000.00 a year. By the time the Answer to the SOR was filed in March 2004, he was making $41,000.00 a year. As of July 13, 2005, the Applicant states he is making approximately $60,000.00 a year.

For Applicant

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

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES