KEYWORD: Financial
DIGEST: Applicant is a 36-year-old office administrator working for a defense contractor. She had
thirteen alleged debts listed in the statement of reasons (SOR) totaling approximately $10,682. She
has paid all but three of the debts since 2006. Her debt problems resulted from separation, divorce,
and a period of unemployment. For the last two years she has shown her financial responsibility by
not generating any new delinquent debt. Applicant has mitigated security concerns arising under
financial considerations. Clearance is granted. 
CASENO: 06-23659.h1
DATE: 06/21/2007
DATE:  June 21, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-23659
DECISION OF ADMINISTRATIVE JUDGE
NOREEN A. LYNCH
APPEARANCES
FOR GOVERNMENT
John B. Glendon, Esq., Department Counsel
FOR APPLICANT
Pro se
SYNOPSIS
2
Applicant is a 36-year-old office administrator working for a defense contractor. She had
thirteen alleged debts listed in the statement of reasons (SOR) totaling approximately $10,682. She
has paid all but three of the debts since 2006. Her debt problems resulted from separation, divorce,
and a period of unemployment. For the last two years she has shown her financial responsibility by
not generating any new delinquent debt. Applicant has mitigated security concerns arising under
financial considerations. Clearance is granted. 
3
STATEMENT OF THE CASE
On January 18, 2006, Applicant applied for a security clearance and submitted a Security
Clearance Application (SF 86). On December 11, 2006, the Defense Office of Hearings and Appeals
(DOHA) issued a Statement of Reasons (SOR) to her, pursuant to Executive Order 10865,
Safeguarding Classified Information Within Industry, February 20, 1960, as amended and modified,
and Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance
Review Program (Directive), dated January 2, 1992, as amended and modified. The SOR detailed
reasons why, under Guideline F (Financial Considerations) of the revised Adjudicative Guidelines
issued on December 29, 2005, and implemented by the Department of Defense, effective September
1, 2006, DOHA could not make the preliminary affirmative finding under the Directive that it is
clearly consistent with the national interest to continue a security clearance for Applicant. The
revised guidelines were provided to Applicant when the SOR was issued. Applicant answered the
Applicant received a Notice of Hearing  on April 23, 2007. At the hearing, she waived her official notice of1
fifteen days.
Applicant's response to the SOR, dated January 6, 2007.2
 GE 1 (Security Clearance Application, dated January 18, 2006) at 1-44.3
Id. at 62.4
Tr. 53.5
4
SOR on January 5, 2006, and elected to have a hearing before an administrative judge. The case was
assigned to me on February 1, 2007. I scheduled a hearing for May 10, 2007.  1
The hearing was convened as scheduled on May 10, 2007 to consider whether it is clearly
consistent with the national interest to grant or continue a security clearance for Applicant.  Four
Government exhibits (GE 1-4) were admitted without objection.  Applicant's thirteen exhibits (AE
A-M) were admitted into the record without objection. Testimony was taken from Applicant and
three witnesses: a senior supervisor at the company where Applicant works; her facility security
officer, and her mother, as reflected in the hearing transcript (Tr.) received on May 22, 2007.
FINDINGS OF FACT
Applicant admitted allegations 1.a, 1.c, 1.e, and 1.l in the SOR under ¶ 1.These admissions
are incorporated herein. She denied allegations 1.b, 1.d, 1.f, 1.g, 1.h, 1.j, 1.k and 1.m because she
paid seven of these debts.  In addition, after a thorough and careful review of the evidence and2
exhibits, I make the following findings of fact:
Applicant is a 36-year-old office administrator working for a defense contractor. Her first
marriage, from 1995 until 2005, ended in divorce. She is remarried, and has two children from her
first marriage.  Applicant earned a high school diploma in 1992. She has completed several college3
courses with the expectation of completing an undergraduate degree.  She has been employed with4
her current employer since January 2006.
Early in her first marriage, Applicant experienced difficulties with her husband controlling
the finances. She and her husband had a large house, a boat, and two cars. They did not live within
their means. Her husband controlled the money and encouraged their lifestyle. At times, he was
verbally and mentally abusive to Applicant. 5
Applicant's husband lost his job along with his high income in April 2002. He did not want
to continue in his occupational field, but rather he wished to pursue acting. Applicant worked during
the marriage; however, her income was much lower than his. They had two children to support.
Consequently, when her husband became unemployed due to a company closure, the family income
was reduced greatly. The family of four now had to live on a smaller income. As a result, in 2002
finances became a problem. They moved into a smaller home, but they were still in an untenable
Tr. 54-55.6
 GE 4 (Bankruptcy Court Records, Voluntary Petition filed August 1, 2002) at 1-37.7
 Id.8
5
financial situation. Applicant and her husband, continued to experience marital difficulties and they
separated.  6
At first, they tried to deal with their creditors. In 2002, however, finances became an
overwhelming problem. They filed for Chapter 7 Bankruptcy in August 2002.  A credit card debt7
was not discharged in bankruptcy. This account was in Applicant's name and she was left with the
debt.   Applicant moved out of the family home into a rental unit with her two sons. Her husband8
Tr. 65.9
Tr. 63.10
Tr. 55.11
Id.12
Tr.15-19.13
AE A-G (Checks and Receipts for bills).14
Tr. 100.15
6
refused to give her any child support or help with their expenses. He threatened Applicant if she
pursued any court action to obtain child support.  They were divorced in 2005.9 10
In November 2004, Applicant could not make payments on her bills. She attempted to
reconcile with her husband, but that did not work. Applicant quit her job at that point and moved so
that she and her children could live in her mother's home. She felt that she and her boys needed to
live a distance away from her husband for safety.  She was successful in finding employment after11
two months. However, she then became unemployed for about nine months. She received
unemployment during that time. Simultaneously, she contacted her creditors to initiate payments on
the debts.  Some creditors would not settle and instead placed judgments against her.12
In 2006, when Applicant received her full time employment, she obtained her credit report.
With the help of her second husband she put together a plan and a realistic budget so she could
pursue debt repayment. Applicant had medical bills from a dentist and other physician visits. Her
husband's insurance sent payment directly to her husband and not to the service provider. The
medical bills were overwhelming from  numerous hospitalizations, doctor visits, prescriptions, and
copays.13
Applicant paid seven debts alleged in the SOR.  She has improved her credit score. She14
currently has only three outstanding debts. A group of small medical bills (24) totals $2,648; a credit
card account ($2,300) that was not included in the 2002 bankruptcy, and a loan in the amount of
$1,286.
Applicant has contacted the credit card company several times by telephone. Since the
account was closed and charged off, she had to find the collection agent for the account. She spoke
to the credit card company's legal department and ultimately obtained the proper contact. When she
contacted them, she affirmed her desire to pay the account or settle it. She is in the process of setting
up a payment plan. Each month Applicant pays $75 on the medical accounts. She is trying to settle
the loan amount with the new collection company. Initially, they did not accept the amount Applicant
could pay on the account. She is waiting for more information.15
Applicant is highly recommended by her employer for a security clearance. She is rated as
an outstanding administrator who is diligent, reputable and very reliable. She has the full support of
her direct supervisor, who describes her skills as exceeding his initial expectations for the job
Testimony of Witness at Tr. 19-20.16
Id.17
Testimony of Witness at Tr. 20-22.18
Testimony of Witness at Tr. 32.19
Tr. 103.20
Id.21
7
position in every manner.  Due to her exceptional work performance she was promoted within the16
first six months of her employment. This promotion provided a percentage salary increase. Her two
years of employment are unblemished.  She received another performance bonus for 2006. She is17
a trusted agent in an environment where security is a concern.  She has excellent potential and18
opportunity for advancement in the defense industry.   19
Applicant earns approximately $1,760 net a month.  Her current husband earns $1,900 net20
a month. Today, Applicant lives within her means, and has not acquired any significant debt other
than her home mortgage.  She is current on her mortgage and her car loan. She is financially stable.21
She accepts responsibility for paying her debts, despite the fact that she inherited some of them due
to events beyond her control. Her bills are paid on time.
POLICIES
The revised Adjudicative Guidelines (AG) set forth set forth both disqualifying conditions
and mitigating conditions applicable to each specific guideline. Additionally, each security clearance
decision must be a fair and impartial commonsense decision based on the relevant and material facts
and circumstances, the whole-person concept, along with the factors listed in the Directive.
Specifically these are: (1) the nature, extent and seriousness of the conduct and surrounding
circumstances; (2) the circumstances surrounding the conduct, to include knowledgeable
participation, (3) the frequency and recency of the conduct, (4) the individual's age and maturity at
the time of the conduct, (5) the extent to which participation is voluntary, (6) the presence or absence
of rehabilitation and other permanent 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. Although the presence or absence of a particular condition or factor for or against
clearance is not outcome determinative, the adjudicative guidelines should be followed whenever
a case can be measured against this policy guidance.
 ISCR Case No. 96-0277 at 2 (App. Bd. Jul 11, 1997).22
 ISCR Case No. 97-0016 at 3 (App. Bd. Dec 31, 1997); Directive, Enclosure 3, ¶ E3.1.14.23
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).24
 ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug 10, 1995); Directive, Enclosure 3, ¶ E3.1.15.25
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan 27, 1995); Directive, Enclosure 3, ¶ E3.1.15.26
 Egan, 484 U.S. 518, at 531.27
 Id.28
 Id.; Directive, Enclosure 2, ¶ E2.2.2.29
 Executive Order 10865 § 7.30
 AG ¶ 18.31
8
The sole purpose of a security clearance determination is to decide if it is clearly consistent
with the national interest to grant or continue a security clearance for an applicant.  The government22
has the burden of proving controverted facts.  The burden of proof is something less than a23
preponderance of evidence.  Once the government has met its burden, the burden shifts to an24
applicant to present evidence of refutation, extenuation, or mitigation to overcome the case against
her.  Additionally, an applicant has the ultimate burden of persuasion to obtain a favorable clearance25
decision.26
No one has a right to a security clearance  and “the clearly consistent standard indicates that27
security clearance determinations should err, if they must, on the side of denials.”  Any reasonable28
doubt about whether an applicant should be allowed access to sensitive information must be resolved
in favor of protecting such sensitive information.  The decision to deny an individual a security29
clearance is not necessarily a determination as to the loyalty of an applicant.  It is merely an30
indication that the applicant has not met the strict guidelines the President and the Secretary of
Defense have established for issuing a security clearance.
CONCLUSIONS
I have carefully considered all the facts in evidence and the legal standards. Based upon
consideration of the evidence, I find Guideline F of the revised AG most pertinent to the evaluation
of the facts in this case. That guideline reads in pertinent part:
Guideline F - Financial Considerations. The Concern: Failure or inability to live within
one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of
judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about
an individual’s reliability, trustworthiness and ability to protect classified information. An individual
who is financially overextended is at risk of having to engage in illegal acts to generate funds.31
9
In this matter, the government provided substantial evidence that Applicant accrued thirteen
delinquent debts. She currently has three debts that are still outstanding. She and her husband filed
for Bankruptcy in 2002.  Consequently, Financial Considerations Disqualifying Condition (FC DC),
AG ¶ 19(a), (inability or unwillingness to satisfy debts) and FC DC, AG ¶ 19(c), (a history of not
meeting financial obligations) apply. 
With the government’s case established, the burden shifts to Applicant to present evidence
of refutation, extenuation, or mitigation to overcome the case against him. Several incidents occurred
in Applicant' s life over which she had no control. Her first husband's control over money in their
marriage, her separation and divorce, and loss of her income and her periods of unemployment are
not in dispute. Such incidents contributed to Applicant's acquisition of delinquent debt. She never
questioned the legitimacy of the debts. She paid what debts she could and researched all the options.
Therefore, FC MC , AG ¶ 20(b), (the conditions that resulted in the behavior were largely beyond
the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency,
or a death, divorce or separation) and the individual acted responsibly under the circumstances)
applies. 
Applicant's thirteen debts became delinquent in a short period of time. After the bankruptcy,
Applicant separated and eventually divorced her husband. She had no help from her husband with
child support. She had to move from the family home and became unemployed shortly thereafter. Her
goal to support her sons and provide for their needs is firm. She has managed to not incur other
delinquencies despite some medical problems. Her credit rating is steadily improving. She has a
position with a good income and chance for advancement. She was open and honest during her
security application process.  Therefore, Financial Considerations Mitigating Condition (FC MC), AG
¶ (a), (the behavior happened so long ago, was so infrequent, or occurred under such circumstances
that it is unlikely to recur and does not cast doubt on the individual’s current reliability,
trustworthiness, or good judgment) applies.
Although Applicant has not received counseling, she never ignored her creditors. She paid
seven debts and is paying on the remaining three debts. Of that remaining three, the amount of debt
is not sufficient to generate a security risk. FC MC, AG ¶ 20(c) (the person has received or is
receiving counseling for the problem and/ or there are clear indications that the problem is being
resolved or is under control) does apply to some extent.
In the past years, Applicant's resolve was to pay all her current bills and concentrate scarce
resources toward necessities and honor her immediate creditors. She moved from her family home
and sought employment.  Her unemployment period hampered her efforts to pay all her bills. She did
not have sufficient income to make lump payment sum payments. Some settlement offers she received
were not within her reach. Therefore, FC MC, AG ¶ 20(d), (the individual initiated a good-faith effort
to repay overdue creditors or otherwise resolve debts) applies to a degree.
The issue before me is not whether Applicant is still legally liable for any or all of her
outstanding debts, but whether she has presented sufficient evidence of extenuation, mitigation or
changed circumstances to warrant a favorable security clearance decision. Her remaining unpaid debt
does not constitute a security risk. In 2006, she began repayment of her delinquent debt. She has a
professional position with a good income and stands ready to proceed with her remaining payment
plan.
10
Whole Person Analysis
I have considered both the record and Applicant in light of the “whole person” concept. She
is an earnest, mature woman currently in a professional position in the defense contractor industry.
She did her best to seek financial solutions that would work for her in the long term. Her testimony
at the hearing was candid and straightforward. At the hearing she acknowledged the life style that she
and her husband had. However, the 2002 bankruptcy was a legitimate method of dealing with the
financial delinquencies. She is open, honest and has not hidden the situation. Her separation and
divorce exacerbated financial issues. She firmly believes she is handling her debt properly. Her
method of paying the remaining debt is a reasonable way to resolve the debts. She has not incurred
any other delinquent debt in two years. Her financial circumstances have improved. The potential for
pressure, coercion, exploitation, or duress is low. She is current on his financial obligations, and has
a very positive employment history since 2005. A greater awareness of financial responsibilities will
result in a continuously improving trend of financial circumstances.
In sum, the likelihood of new debt problems is low. Applicant's financial case shows her
willingness to utilize her repayment plan to resolve her delinquent debts. However, three SOR debts
remain. After weighing the disqualifying and mitigating conditions, and all the facts and
circumstances, in the context of the whole person, I conclude she has mitigated the security concerns
pertaining to financial considerations. Clearance is granted.
FORMAL FINDINGS
Formal Findings for or against Applicant on the allegations set forth in the SOR, as required
by Section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1. Guideline F (Financial Considerations):       FOR APPLICANT
Subparagraph 1.a.       For Applicant
Subparagraph 1.b.      For Applicant
Subparagraph 1.c.       For Applicant
Subparagraph 1.d. For Applicant
Subparagraph 1.e. For Applicant
Subparagraph 1.f. For Applicant
Subparagraph 1.g. For Applicant
Subparagraph 1.h. For Applicant
Subparagraph 1.i. For Applicant
Subparagraph 1.j. For Applicant
Subparagraph 1.k. For Applicant
Subparagraph 1.l. For Applicant
Subparagraph 1.m. For Applicant
DECISION
11
In light of all of the circumstances in this case, it is clearly consistent with the national interest
to grant a security clearance for Applicant. Clearance is granted.
                                               
Noreen A. Lynch.
Administrative Judge