ISCR Case 96-0498.h1

Case Headnote

ISCR Case No. 96-0498.h1

grantedJan 7, 1997· Hon. Wilford H. Ross· hearing

Summary

A 33-year-old married father of three, holding an Associate Degree in Electronic Engineering, was granted a Secret-level DoD security clearance despite initial concerns under Guideline F (Financial Considerations). The case involved approximately $34,000 in past-due debts, primarily incurred during a period of immaturity and unemployment.

The applicant demonstrated significant progress in managing these debts. He successfully paid off one debt in September 1996 and another entirely. For several other debts, he made payments and established payment agreements, including one where a credit card company sold the debt to a bank, which then issued a new credit line with automatic monthly deductions. He also submitted documentation to establish a payment plan for approximately $22,000 in defaulted student loans and made an initial payment. For other alleged debts, the applicant diligently attempted to contact creditors, or creditors had no record of an account, and credit reports did not corroborate their existence. Additionally, a defaulted student loan belonging to his wife was in forbearance while an application for discharge was processed.

The judge found that the applicant had made substantial payments and settlements, demonstrating a commitment to financial responsibility. His financial difficulties were attributed to past immaturity and unemployment, which had since been resolved. These actions and circumstances led to the decision to grant the security clearance.

Why the Applicant Prevailed

The applicant successfully mitigated financial concerns by demonstrating a plan to address past-due debts.
The applicant's financial difficulties were largely due to immaturity and periods of unemployment, which have since been resolved.
The applicant has made substantial payments and settlements on his debts, showing a commitment to financial responsibility.

Conditions Referenced

Disqualifying

F.1raisedHistory of Not Meeting Financial Obligations
F.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

F.1appliedBehavior Was Not Recent
F.3appliedConditions Largely Beyond the Person's Control
F.6appliedGood-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“The Government has met its initial burden of proving by prima facie evidence that the Applicant has had serious financial problems (Criterion F).”

Procedural Posture

SOR issuedJul 10, 1996
Answer filedAug 1, 1996
Hearing heldOct 30, 1996
Decision dateJan 7, 1997

Cite For

Mitigation of Financial Issues Under Guideline F
Consideration of Past Financial Behavior in Light of Current Stability
Impact of Personal Circumstances on Financial Management

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 has reached a financial settlement with this creditor, and successfully paid off this debt in September 1996.	For Applicant	Unspecified Financial	Admitted	—	—	—
1.b	The Applicant has paid $85 on this past due debt, and has reached a payment agreement with the creditor. He currently owes $782. $782	For Applicant	Unspecified Financial	Admitted	—	—	—
1.c	Credit Card Company A sold this debt to Bank B. Subsequently, Bank B issued a credit card to the Applicant with an opening balance in the amount of the debt. The Applicant has paid $254.25 on this debt, and Bank B will deduct $63 a month directly from the Applicant's savings account to pay the remainder. He currently owes $1895.75 on this new credit line account. $1,895	For Applicant	Credit Card Debt	Admitted	—	—	—
1.d	The Applicant has diligently attempted to contact this creditor without success. The existence and estimated amount of this debt was provided by the Applicant in his National Agency Questionnaire (Government Exhibit 1). The Credit Report Summaries of July 21, 1995 (Government Exhibit 5), and May 3, 1996 (Government Exhibit 4), do not provide any independent corroboration of the existence and amount of this debt.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e	The Applicant has paid $70 on this past due debt, and has reached a payment agreement with the creditor. He currently owes $275. $275	For Applicant	Unspecified Financial	Admitted	—	—	—
1.f	The Applicant has submitted the required documentation to establish a payment plan with the Department of Education regarding these defaulted student loans. As of the date of the hearing, the Applicant had not heard from the Department concerning his loan repayment schedule. He has paid $85 towards this debt. He continues to owe approximately $22,000. $22,000	For Applicant	Student Loan Debt	Admitted	—	—	—
1.g	The Applicant has diligently attempted to contact this creditor without success. The existence and estimated amount of this debt was provided by the Applicant in his National Agency Questionnaire (Government Exhibit 1). The Credit Report Summaries of July 21, 1995 (Government Exhibit 5), and May 3, 1996 (Government Exhibit 4), do not provide any independent corroboration of the existence and amount of this debt.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.h	The Applicant has contacted this creditor, who states that it has no record of the Applicant having an account with them. The existence and estimated amount of this debt was provided by the Applicant in his National Agency Questionnaire (Government Exhibit 1). The Credit Report Summaries of July 21, 1995 (Government Exhibit 5), and May 3, 1996 (Government Exhibit 4), do not provide any independent corroboration of the existence and amount of this debt.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.i	The Applicant has paid $70 on this past due debt, the actual amount of which is $260, and has reached a payment agreement with the creditor. He currently owes $190. $190	For Applicant	Unspecified Financial	Admitted	—	—	—
1.j	The Applicant has contacted this creditor, who states that it has no record of the Applicant having an account with them. The existence and estimated amount of this debt was provided by the Applicant in his National Agency Questionnaire (Government Exhibit 1). The Credit Report Summaries of July 21, 1995 (Government Exhibit 5), and May 3, 1996 (Government Exhibit 4), do not provide any independent corroboration of the existence and amount of this debt.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.k	The Applicant has paid $70 on this past due debt, the actual amount of which is $119.96, and has reached a payment agreement with the creditor. He currently owes $49.96. $49	For Applicant	Unspecified Financial	Admitted	—	—	—
1.l	The Applicant has reached a financial settlement with this creditor on this disputed debt. The Applicant has paid $60 on this debt, which has been reduced to $1000. He currently owes $940. $940	For Applicant	Unspecified Financial	Admitted	—	—	—
1.m	This defaulted student loan was incurred by the Applicant's wife. The school closed before she could complete the course of study. She has applied to have the loan discharged. As of the date of the hearing, the Applicant and his wife had not heard from the Department of Education concerning whether the loan would be discharged. During the period when her application is being processed, the loan is in a forbearance period.	For Applicant	Student Loan Debt	Unknown	—	—	—
1.n	The Applicant has paid off this debt.	For Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The Applicant has reached a financial settlement with this creditor, and successfully paid off this debt in September 1996.

For Applicant

Unspecified Financial

Admitted

—

1.b

The Applicant has paid $85 on this past due debt, and has reached a payment agreement with the creditor. He currently owes $782.

$782

For Applicant

Unspecified Financial

Admitted

—

1.c

Credit Card Company A sold this debt to Bank B. Subsequently, Bank B issued a credit card to the Applicant with an opening balance in the amount of the debt. The Applicant has paid $254.25 on this debt, and Bank B will deduct $63 a month directly from the Applicant's savings account to pay the remainder. He currently owes $1895.75 on this new credit line account.

$1,895

For Applicant

Credit Card Debt

Admitted

—

1.d

The Applicant has diligently attempted to contact this creditor without success. The existence and estimated amount of this debt was provided by the Applicant in his National Agency Questionnaire (Government Exhibit 1). The Credit Report Summaries of July 21, 1995 (Government Exhibit 5), and May 3, 1996 (Government Exhibit 4), do not provide any independent corroboration of the existence and amount of this debt.

For Applicant

Unspecified Financial

Unknown

—

1.e

The Applicant has paid $70 on this past due debt, and has reached a payment agreement with the creditor. He currently owes $275.

$275

For Applicant

Unspecified Financial

Admitted

—

1.f

The Applicant has submitted the required documentation to establish a payment plan with the Department of Education regarding these defaulted student loans. As of the date of the hearing, the Applicant had not heard from the Department concerning his loan repayment schedule. He has paid $85 towards this debt. He continues to owe approximately $22,000.

$22,000

For Applicant

Student Loan Debt

Admitted

—

1.g

For Applicant

Unspecified Financial

Unknown

—

1.h

The Applicant has contacted this creditor, who states that it has no record of the Applicant having an account with them. The existence and estimated amount of this debt was provided by the Applicant in his National Agency Questionnaire (Government Exhibit 1). The Credit Report Summaries of July 21, 1995 (Government Exhibit 5), and May 3, 1996 (Government Exhibit 4), do not provide any independent corroboration of the existence and amount of this debt.

For Applicant

Unspecified Financial

Unknown

—

1.i

The Applicant has paid $70 on this past due debt, the actual amount of which is $260, and has reached a payment agreement with the creditor. He currently owes $190.

$190

For Applicant

Unspecified Financial

Admitted

—

1.j

For Applicant

Unspecified Financial

Unknown

—

1.k

The Applicant has paid $70 on this past due debt, the actual amount of which is $119.96, and has reached a payment agreement with the creditor. He currently owes $49.96.

$49

For Applicant

Unspecified Financial

Admitted

—

1.l

The Applicant has reached a financial settlement with this creditor on this disputed debt. The Applicant has paid $60 on this debt, which has been reduced to $1000. He currently owes $940.

$940

For Applicant

Unspecified Financial

Admitted

—

1.m

This defaulted student loan was incurred by the Applicant's wife. The school closed before she could complete the course of study. She has applied to have the loan discharged. As of the date of the hearing, the Applicant and his wife had not heard from the Department of Education concerning whether the loan would be discharged. During the period when her application is being processed, the loan is in a forbearance period.

For Applicant

Student Loan Debt

Unknown

—

1.n

The Applicant has paid off this debt.

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