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Summary

The applicant, a 27-year-old employed administrative assistant, faced security concerns under Guideline F for unresolved financial debts and Guideline E for personal conduct due to omissions on her security clearance application. Despite demonstrating some good-faith efforts to address her debts, the applicant failed to present a clear plan for resolution and did not seek counseling, leading to a denial of her security clearance.

Under Guideline E (Personal Conduct) and Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Applicant denied a $922 debt to Creditor #1 and was investigating it. However, she has not disputed the debt on her credit report (1.a). Applicant denied the debt to Creditor #2 for $732 and contacted the creditor six months ago. However, she has not disputed the debt on her credit report (1.b). Applicant denied the debt to Creditor #3 for $700 for an account placed for collection in 1998. However, she has not disputed the debt on her credit report (1.c). Applicant paid the debt to Creditor #4 for $52 in August 2005 after she re-financed her house (1.d). Applicant explained the debt to Creditor #5 for $8,034 for a 1997 student loan which was placed for collection in June 2000. She received $4,000 and forfeited the remaining $4,000 when she did not return to school. She learned of this debt when she purchased her home in November 2004 and looked at her credit report. However, she has not contacted the university to clarify the status of the loan or resolve it (1.e). Applicant denied a debt to Creditor #6 for $8,353 for an account charged off in April 2002. She had made double payments and an employee did not process them correctly in February 2003, so the loan went into default after she got two months behind in making her interest payments. She paid off one of the student loans but is not sure which one (1.f). Applicant denied a debt to Creditor #6 for $9,391 for an account charged off in April 2002. She had made double payments and an employee did not process them correctly in February 2003, so the loan went into default after she got two months behind in making her interest payments. She paid off one of the student loans, but is not sure which one (1.g). Applicant admits her debt to Creditor #7 for $1,670 for an account placed for collection in October 2000 which was still outstanding at the time of the hearing; she hoped to negotiate a settlement amount but had no timetable to do so (1.h). Applicant admits her debt to Creditor #8 for $490 for an account placed for collection in 2001. She will not pay this collection agency as she believes they are improperly charging her interest (1.i). Applicant admits the debt to Creditor #9 for $242 placed for collection in March 2002, which she paid in September 2005 (1.j). Applicant admits the debt to Creditor #10 for $605 placed for collection in May 2002, but the debt remains unresolved (1.k). Applicant denied a $40 debt to Creditor #11 for an account placed for collection in July 2002. At the hearing she said she was willing to pay the bill, but had no plan to do so (1.l). Applicant denied the debt to Creditor #12 for $174 for an account placed for collection in July 2002. She believed her father should have paid for this MRI but is now willing to resolve it and did so in September 2005 (1.m). Applicant denied the debt to Creditor #13 for $445 for an account charged off as a bad debt prior to January 2003. However, she has not disputed the debt on her credit report (1.n). Applicant admitted the debt to Creditor #14 for $1,000 for an account charged off as a bad debt prior to January 2003. She is negotiating with the creditor who is now demanding $3,000 with interest, so the debt is unresolved (1.o). Applicant admitted her debt to Creditor #15 for $199 for leased furniture for an account charged off as a bad debt prior to January 2003. At the time of the hearing it was unresolved, but she intended to pay it and did so in September 2005 (1.p). Applicant admitted her debt to Creditor #16 for $547 for an account placed for collection in 2003 which she has paid (1.q). Applicant admits the debt to Creditor #17 for $143 for an account past due since January 2003, which she paid in August 2005 (1.r). Applicant denies the debt to Creditor #18 for $623, a medical bill, that she believed was her parents' responsibility. However, she has not disputed the debt on her credit report. It was placed for collection in July 2003 and remains unresolved (1.s). Applicant denied a $445 debt to Creditor #19 for an account placed for collection prior to November 2003. I accept her position that it is the same debt as allegation 1.n (1.t). Applicant admitted the debt to Creditor #20 for $785 for an account charged off prior to November 2003. She is investigating which collection agency has the debt which remains unpaid (1.u). While her August 2004 Personal Financial Statement showed she had the means to pay on her debts, Applicant made only a minimal effort to resolve her debts. Subsequently, she purchased a home which "delayed" her ability to make restitution as her husband also had debts. Instead, they chose to purchase a second car with a $350 payment (1.v).

The judge denied the clearance. The government raised disqualifying conditions F.3, E.2.A5.1.2.2. The judge applied mitigating conditions E.2.A6.1.3, E.2.A6.1.3.3. The decision turned on the following: The applicant has unresolved debts and did not demonstrate sufficient financial responsibility; She failed to provide a plan for addressing her outstanding debts despite having sufficient income; The applicant did not seek counseling for her financial issues as previously promised.

Why the Applicant Was Denied

• The applicant has unresolved debts and did not demonstrate sufficient financial responsibility.
• She failed to provide a plan for addressing her outstanding debts despite having sufficient income.
• The applicant did not seek counseling for her financial issues as previously promised.

Conditions Referenced

Key Rule Quoted

“The responsibility for producing evidence initially falls on the Government to demonstrate that it is not clearly consistent with the national interest to grant or continue applicant's access to classified information.”

Procedural Posture

• SOR issuedMar 21, 2005
• Answer filedMay 13, 2005Notarized response to SOR.
• Hearing heldSep 9, 2005Hearing conducted in a city near the applicant's residence.
• Decision dateMar 20, 2006

Cite For

• Denial of Clearance Due to Unresolved Financial Issues Under Guideline F
• Mitigation of Personal Conduct Concerns Under Guideline E Due to Lack of Intent to Falsify
• Importance of Presenting a Clear Plan for Debt Resolution in Financial Cases.