ISCR Case 03-19875.h1

Case Headnote

ISCR Case No. 03-19875.h1

grantedDec 28, 2004· Hon. Michael J. Breslin· hearing

Summary

A 47-year-old male applicant with a history of financial difficulties, including delinquencies and a Chapter 13 bankruptcy, sought a security clearance under Guideline F (Financial Considerations). The Statement of Reasons detailed several financial allegations. These included an eviction in July 2002, which the applicant initially denied owing but later produced proof of payment. Other debts were initially denied, with the applicant later admitting fault for their exclusion from his bankruptcy plan and expressing intent to pay.

Additional allegations involved medical bills for his daughter from 1995-1997, attributed to issues with changing insurance carriers. Several other debts were confirmed to be included in his October 2001 Chapter 13 bankruptcy filing, for which he provided evidence of regular payments. One debt, for an engagement ring, was documented as paid in June 2003.

Despite some unresolved debts, the judge found that the applicant mitigated the security concerns. This decision was based on his consistent payments under the Chapter 13 plan, the historical nature of most financial difficulties, and his long record of successfully holding a security clearance. The judge concluded that the applicant's efforts and the limited potential for coercion warranted a favorable outcome, and the security clearance was GRANTED.

Why the Applicant Prevailed

The applicant has made regular payments under a Chapter 13 bankruptcy plan since 2001.
The applicant's financial difficulties were largely historical and not recent.
The applicant's long history of successfully holding a security clearance indicated reliability.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

E2.A6.1.3.1rejectedBehavior Was Not RecentMany of the applicant's financial problems occurred several years ago, but recent financial irresponsibility led to bankruptcy.
E2.A6.1.3.2rejectedFinancial Difficulty Was an Isolated IncidentThe applicant has numerous debts spanning many years.
E2.A6.1.3.3rejectedConditions Largely Beyond the Person's ControlThe applicant's financial problems were primarily due to over-extension rather than uncontrollable circumstances.
E2.A6.1.3.4appliedReceived Counseling and Indications of ResolutionThe applicant consulted an attorney and is making satisfactory progress on the bankruptcy plan.
E2.A6.1.3.5appliedGood-faith Effort to Repay or Resolve DebtsThe applicant initiated a bankruptcy plan to address most of his debts.

Key Rule Quoted

“The adjudicative process is an examination of a sufficient period of a person's life to make an affirmative determination that the person is eligible for a security clearance.”
— Directive, ¶ E2.2.1.

Procedural Posture

SOR issuedMay 17, 2004
Answer filedJun 14, 2004
Hearing heldSep 21, 2004
Decision dateDec 28, 2004

Cite For

Mitigation of Financial Issues Under Guideline F Due to Bankruptcy Efforts
Consideration of Historical Financial Behavior in Security Clearance Decisions
Impact of Long-term Successful Security Clearance Holding on Current Eligibility Assessments.

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	Applicant was evicted from the apartment in July 2002 because of conduct by his son's friends. Applicant claimed he never received notice of the debt or an explanation for the retention of his security deposit.	For Applicant	Unspecified Financial	Denied	—	—	Claimed Other
1.b	Applicant denied that he owed it. At the hearing, Applicant produced a statement showing the debt was paid.	For Applicant	Unspecified Financial	Denied	—	—	—
1.c	Applicant initially denied the debt. At the hearing, he admitted he was mistaken and said he planned on paying it as soon as he got in touch with the creditor.	For Applicant	Unspecified Financial	Denied	—	—	Claimed Other
1.d	Applicant initially denied the debts. At the hearing, he claimed he thought they were included in the bankruptcy proceeding and admitted that it was his fault they were not.	For Applicant	Unspecified Financial	Denied	—	—	Claimed Other
1.e	Applicant initially denied the debts. At the hearing, he claimed he thought they were included in the bankruptcy proceeding and admitted that it was his fault they were not.	For Applicant	Unspecified Financial	Denied	—	—	Claimed Other
1.f	At the hearing, Applicant explained the debt was for an engagement ring for his girlfriend. He produced documentation indicating the debt was paid in June 2003.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.g	Applicant recalled the bills were for medical treatments for his daughter between 1995 and 1997. He related problems getting his insurance carriers to pay the debts because he was then changing insurers.	For Applicant	Medical Debt	Unknown	—	—	Claimed Other
1.h	Applicant recalled the bills were for medical treatments for his daughter between 1995 and 1997. He related problems getting his insurance carriers to pay the debts because he was then changing insurers.	For Applicant	Medical Debt	Unknown	—	—	Claimed Other
1.i	Applicant filed for bankruptcy in October, 2001. Applicant admitted this allegation. He produced evidence showing he is making his regular payments as required under the Chapter 13 wage-earner's plan. $4,500	For Applicant	Bankruptcy Filing	Admitted	—	—	—
1.j	These debts were included in the bankruptcy proceeding.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.k	These debts were included in the bankruptcy proceeding.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.l	These debts were included in the bankruptcy proceeding.	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant was evicted from the apartment in July 2002 because of conduct by his son's friends. Applicant claimed he never received notice of the debt or an explanation for the retention of his security deposit.

For Applicant

Unspecified Financial

Denied

—

Claimed

Other

1.b

Applicant denied that he owed it. At the hearing, Applicant produced a statement showing the debt was paid.

For Applicant

Unspecified Financial

Denied

—

1.c

Applicant initially denied the debt. At the hearing, he admitted he was mistaken and said he planned on paying it as soon as he got in touch with the creditor.

For Applicant

Unspecified Financial

Denied

—

Claimed

Other

1.d

Applicant initially denied the debts. At the hearing, he claimed he thought they were included in the bankruptcy proceeding and admitted that it was his fault they were not.

For Applicant

Unspecified Financial

Denied

—

Claimed

Other

1.e

Applicant initially denied the debts. At the hearing, he claimed he thought they were included in the bankruptcy proceeding and admitted that it was his fault they were not.

For Applicant

Unspecified Financial

Denied

—

Claimed

Other

1.f

At the hearing, Applicant explained the debt was for an engagement ring for his girlfriend. He produced documentation indicating the debt was paid in June 2003.

For Applicant

Unspecified Financial

Unknown

—

1.g

Applicant recalled the bills were for medical treatments for his daughter between 1995 and 1997. He related problems getting his insurance carriers to pay the debts because he was then changing insurers.

For Applicant

Medical Debt

Unknown

—

Claimed

Other

1.h

For Applicant

Medical Debt

Unknown

—

Claimed

Other

1.i

Applicant filed for bankruptcy in October, 2001. Applicant admitted this allegation. He produced evidence showing he is making his regular payments as required under the Chapter 13 wage-earner's plan.

$4,500

For Applicant

Bankruptcy Filing

Admitted

—

1.j

These debts were included in the bankruptcy proceeding.

For Applicant

Unspecified Financial

Unknown

—

1.k

These debts were included in the bankruptcy proceeding.

For Applicant

Unspecified Financial

Unknown

—

1.l

These debts were included in the bankruptcy proceeding.

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