ISCR Case 05-15218.h1

Case Headnote

ISCR Case No. 05-15218.h1

grantedAug 29, 2006· Hon. Martin H. Mogul· hearing

Summary

A 27-year-old defense contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons cited one overdue medical debt from 1998, totaling $25,455, incurred when the applicant was 19 and uninsured after an injury led to unemployment. A second alleged debt of $143 was determined to be part of the larger medical debt and was subsequently struck from the allegations.

The applicant testified that he was unable to pay the debt due to unemployment or underemployment from 1998 until 2004. He sought credit counseling, which advised him against payment due to his financial situation. The applicant recently contacted the creditor, who confirmed a zero balance on the account in a letter dated July 28, 2006, indicating they would not accept payment.

The judge found sufficient mitigation, noting that the medical debt was an isolated incident stemming from an unexpected emergency. The applicant demonstrated financial responsibility by remaining current on all other debts and exhibited a stable financial outlook, supported by positive character references. Based on these factors, the security clearance was granted.

Why the Applicant Prevailed

The applicant's only overdue debt was from 1998 and has since been confirmed as having a zero balance by the creditor.
The applicant has remained current on all other debts since incurring the medical debt.
The applicant demonstrated a stable and mature outlook about his finances, supported by numerous positive character references.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedFinancial Considerations - Inability to Meet Financial Obligations
E2.A6.1.2.3raisedFinancial Considerations - A History of Not Meeting Financial Obligations

Mitigating

E2.A6.1.3.1appliedFinancial Considerations - the Behavior Was Not Recent
E2.A6.1.3.2appliedFinancial Considerations - It Was an Isolated Incident
E2.A6.1.3.3appliedFinancial Considerations - the Debt Was the Result of an Unexpected Medical Emergency
E2.A6.1.3.4appliedFinancial Considerations - the Individual Sought Counseling and Is Current on Other Debts
E2.A6.1.3.6appliedFinancial Considerations - the Creditor Will Not Accept Payment and Shows a Zero Balance

Key Rule Quoted

“Each adjudicative decision must also include an assessment of: (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, and the extent of knowledgeable participation; (3) how recent and frequent the behavior was; (4) the individual's age and maturity at the time of the conduct; (5) the voluntariness of participation; (6) the presence or absence of rehabilitation and other pertinent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.”
— Directive, Section E2.2.1. of Enclosure 2

Procedural Posture

SOR issuedMar 30, 2006
Answer filedApr 20, 2006Applicant responded in writing to the SOR allegations.
Hearing heldJul 18, 2006Hearing conducted with both parties presenting evidence.
Decision dateAug 29, 2006

Cite For

Mitigating Conditions Under Guideline F for Financial Considerations
Impact of Medical Emergencies on Financial Obligations
Importance of Demonstrating Current Financial Responsibility

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	This overdue debt to Creditor 1 is listed in the SOR in the amount of $25,455. Applicant testified that this debt was incurred as a result of medical treatment he received for an injury he suffered in 1998, when he was 19 years old. As a result of the injury, Applicant became unemployed, and because he had no health insurance, he was unable to pay off this debt. He consulted a credit counseling company, which advised him that since he could not afford to pay off this debt, he could either file for bankruptcy or simply wait for the bills to no longer be listed on his credit history. From 1998 until 2004, when he began his current employment, Applicant has been unemployed or underemployed with no surplus income to resolve this debt. Applicant recently contacted the creditor to try to pay off this debt, and the creditor informed him that they will not accept payment for this debt. A post hearing letter from this creditor, dated July 28, 2006, indicates that Applicant now has a zero balance on this account. $25,455	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts (e) reasonable, documented basis to dispute the debt (f) the affluence resulted from a legal source	Documented Other
1.b	This overdue debt to Creditor 2 is listed in the SOR in the amount of $143. In his RSOR, Applicant admitted that this debt is due and owing. However, during his testimony, he pointed out that this was part of the debt that has been alleged as 1.a., above. Department Counsel agreed that this debt was part of 1.a., and therefore, 1.b. was struck as an allegation. $143	For Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

This overdue debt to Creditor 1 is listed in the SOR in the amount of $25,455. Applicant testified that this debt was incurred as a result of medical treatment he received for an injury he suffered in 1998, when he was 19 years old. As a result of the injury, Applicant became unemployed, and because he had no health insurance, he was unable to pay off this debt. He consulted a credit counseling company, which advised him that since he could not afford to pay off this debt, he could either file for bankruptcy or simply wait for the bills to no longer be listed on his credit history. From 1998 until 2004, when he began his current employment, Applicant has been unemployed or underemployed with no surplus income to resolve this debt. Applicant recently contacted the creditor to try to pay off this debt, and the creditor informed him that they will not accept payment for this debt. A post hearing letter from this creditor, dated July 28, 2006, indicates that Applicant now has a zero balance on this account.

$25,455

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) received/receiving counseling; problem being resolved

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

(e) reasonable, documented basis to dispute the debt

(f) the affluence resulted from a legal source

Documented

Other

1.b

This overdue debt to Creditor 2 is listed in the SOR in the amount of $143. In his RSOR, Applicant admitted that this debt is due and owing. However, during his testimony, he pointed out that this was part of the debt that has been alleged as 1.a., above. Department Counsel agreed that this debt was part of 1.a., and therefore, 1.b. was struck as an allegation.

$143

For Applicant

Unspecified Financial

Admitted

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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