KEYWORD: Financial
DIGEST: Between 2001 and 2004, Applicant accrued more than $15,000 of post-Chapter 13,
delinquent debt. The debt that resulted in the bankruptcy was caused by circumstances beyond his
control. Approximately $11,000 of the post-bankruptcy debt was accrued on behalf of his ex-
employer and was in dispute for several years. Over the past two years, Applicant has retained a
credit correction agency and a credit counseling agency. He has been making debt payments
consistent with the agreements with creditors for the past five months. He has mitigated the security
concern. Clearance is granted.
CASENO: 06-20091.h1
DATE: 08/30/2007
DATE: August 30, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-20091
DECISION OF ADMINISTRATIVE JUDGE
MARC E. CURRY
APPEARANCES
FOR GOVERNMENT
Ray T. Blank, Esq., Department Counsel
FOR APPLICANT
Pro Se
Tr. 25.1
Tr. 26.2
2
SYNOPSIS
Between 2001 and 2004, Applicant accrued more than $15,000 of post-Chapter 13,
delinquent debt. The debt that resulted in the bankruptcy was caused by circumstances beyond his
control. Approximately $11,000 of the post-bankruptcy debt was accrued on behalf of his ex-
employer and was in dispute for several years. Over the past two years, Applicant has retained a
credit correction agency and a credit counseling agency. He has been making debt payments
consistent with the agreements with creditors for the past five months. He has mitigated the security
concern. Clearance is granted.
STATEMENT OF THE CASE
On February 20, 2007, the Defense Office of Hearings and Appeals (DOHA) issued
Applicant a Statement of Reasons (SOR) explaining why it was not clearly consistent with the
national interest to grant or continue a security clearance. This action was taken under Executive
Order 10865, dated February 20, 1960, as amended, and DoD Directive 5220.6, dated January 2,
1992, as amended. Applicant answered the SOR on March 15, 2007, and requested a hearing.
The case was assigned to me on May 9, 2007. On May 24, 2007, DOHA issued a notice of
hearing scheduling it for June 12, 2007. During the hearing, I received six government exhibits, 19
Applicant exhibits, and Applicant’s testimony. At Applicant’s request, I left the record open for him
to submit additional exhibits. Within the time allotted, he submitted two documents received as
Exhibits T and U. DOHA received the transcript on July 6, 2007.
FINDINGS OF FACT 
Applicant admitted to the allegations listed in SOR subparagraphs 1.a and 1.b, and denied
the remainder. The admissions are incorporated into the findings of fact. In addition, I make the
following findings of fact.
Applicant is a 46-year-old married man with an adult stepson. He has a high school diploma
and is currently working toward an associate’s degree in network administration.  He is an Army1
veteran, retiring at the rank of sergeant first class (E 7) in 2000 after 21 years of service.2
Throughout his career in the Army and the civilian world, he has worked as a telecommunications
specialist.
Applicant has a history of financial problems beginning in  the early 1990s. At that time, his
in-laws simultaneously experienced serious health problems, compelling his wife to assist in caring
for them. Subsequently her work hours grew more sporadic as the time spent caring for her parents
Tr. 82.3
Tr. 83.4
Exhibit 3, U.S. Bankruptcy Court Documentation, Schedules E and F, dated December 16, 1996.5
Discharge of Debtor, dated December 21, 1999, as included in Answer, dated March 15, 2007, at 7.6
Tr. 41; Exhibit 1, Security Clearance Application, dated October 16, 2005, at 17; Exhibit 2, Interrogatories,7
dated November 8, 2006, at 6.
Tr. 90.8
Tr. 67.9
Tr. 90.10
Tr. 31.11
Tr. 30.12
Id.13
Tr. 67.14
3
increased, decreasing her wages. Because Applicant and his wife depended on both incomes to make
ends meet, they gradually began to fall behind on their debts.3
At approximately the same time, Applicant’s grandfather who raised him died. He had to pay
between two and three thousand dollars in funeral expenses.4
In December 1996, Applicant and his wife filed for Chapter 13 bankruptcy, as alleged in
subparagraph 1.a. It included $32,000 of unsecured debt and $110,000 of secured debt.  Under the5
bankruptcy payment plan, they were to pay $241 per month for three years. In December 1999, they
successfully completed the payment plan, and the court discharged the bankruptcy.6
Between January and July 2000, Applicant held a job that required extensive travel.  To7
facilitate the performance of his job duties, Applicant used a credit card to charge travel-related work
expenses, such as rental cars, hotel expenses, and meals.  Also, he was required to purchase any8
equipment needed to complete his tasks while on travel. The expenses averaged between four and
five thousand dollars each trip.9
Under the arrangement with the employer, the credit card was issued in Applicant’s name.
At the conclusion of each trip, Applicant was to submit the credit card bill to his employer,
whereupon the employer would pay it.10
In July 2000, Applicant was laid off as part of a company downsizing.  Before leaving, he11
submitted reimbursement paperwork for his remaining corporate credit card debt.  After leaving,12
however, he continued to receive bills from the credit card company. He then attempted to contact
his former supervisor for help in correcting the discrepancy, and discovered that he had also been
laid off.  Next, he tried to contact his ex-employer’s central office to resolve the problem.  He was13 14
Exhibit E, Receipt, dated April 19, 2007, Exhibit F, Undated Receipt, and Exhibit T, Undated Receipt.15
Tr. 91; Exhibit R, Credit Bureau Report, dated September 26, 2005, at 1.16
Tr. 92. The credit correction agency is different from the credit counseling agency he consulted in March 200717
(Note 13, supra).
Tr. 92; Exhibit Q, Credit Bureau Report, dated March 7, 2006, at 1. 18
Exhibits F through P, Payment Receipts.19
Answer, dated March 15, 2007, at 2; Letter from Creditor to Applicant as included in Answer at 8.20
Tr. 62. The creditors in the SOR rejected the counseling agency’s offer to be included in the debt consolidation21
plan.
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unsuccessful. Consequently, the bill grew delinquent, and the creditor reported it, as alleged in SOR
subparagraph 1.b. 
Applicant contacted the creditor to contest the charges. It refused to remove them from his
record. In March 2007, after his appeal was rejected, he developed a plan to pay the delinquency. The
following month, Applicant submitted $100 to the creditor. He has been making $100 payments
since that time.15
Subparagraphs 1.c and 1.d allege delinquencies owed to the same creditor. Applicant denied
these bills in September 2005 when he discovered them on his credit report.  He retained a credit16
correction agency to investigate.  Five months later, in March 2006, the creditor contacted him, and17
confirmed they were his responsibility.  In April 2007, he began paying them $25 per month.18
Currently, he has collectively paid $150 toward their satisfaction.  19
Applicant disputed the debt alleged in subparagraph 1.e. He contacted the creditor who
informed him the account was not his, and that it had been stricken from his record.20
Currently, Applicant has approximately $18,000 of debt. Approximately $3,200 was not
included in the SOR. He owes approximately $11,000 toward the satisfaction of the corporate credit
card bill, and approximately $4,000 on the credit cards listed in 1.c and 1.d. He has been making
payments on all of these debts since April 2007. In addition, he has attended a class in financial
management sponsored by the credit counseling agency he retained in March 2007.21
POLICIES
The adjudicative guidelines, as revised December 29, 2005, and implemented September 1,
2006, apply to the analysis of this case. In addition to brief introductory explanations for each
guideline, they are divided into those that may be considered in deciding whether to deny or revoke
an individual’s eligibility for access to classified information (disqualifying conditions) and those
that may be considered in deciding whether to grant an individual’s eligibility for access to classified
information (mitigating conditions).
Because the entire process is a scrutiny of a number of variables known as the “whole person
concept,” all available, reliable information about the person, past and present, favorable and
See generally, Directive, Sec. 2.3, Sec. 2.5.3, Sec. 3.2, and Sec. 4.2.22
5
unfavorable, should be considered in making a meaningful decision. Specifically these are: (1) the
nature and seriousness of the conduct and surrounding circumstances; (2) the frequency and recency
of the conduct; (3) the age of the applicant; (4) the motivation of the applicant, and the extent to
which the conduct was negligent, willful, voluntary, or undertaken with knowledge of the
consequences; (5) the absence or presence of rehabilitation; and (6) the probability that the
circumstances or conduct will continue or recur in the future.
The following adjudicative guideline is raised:
Guideline F - Financial Considerations: 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.
Conditions pertaining to this adjudicative guideline that could raise a security concern and may be
disqualifying, as well as those which could mitigate security concerns, are set forth and discussed
in the conclusions below.
Since the protection of national security is the paramount consideration, the final decision
in each case must be reached by applying the standard that the issuance of the clearance is “clearly
consistent with the national interest.”   In reaching this decision, I have drawn only those22
conclusions that are based on the evidence contained in the record.
The Government is responsible for presenting evidence to establish facts in the SOR that
have been controverted. The applicant is responsible for presenting evidence to rebut, explain,
extenuate, or mitigate facts admitted by the applicant or proven by the Government, and has the
ultimate burden of persuasion as to obtaining a favorable security decision.
CONCLUSIONS
Applicant’s history of financial problems triggers the application of Financial Considerations
Disqualifying Conditions (FC DC) 19(a): inability or unwillingness to satisfy debts, FC DC 19(c):
a history of not meeting financial obligations, and FC DC 19(e): consistent spending beyond one’s
means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-
to-income ratio, and/or other financial analysis. 
The majority of Applicant’s delinquencies either originated before 1996, or related to the
non-reimbursed, corporate credit card expenses he accrued seven years ago. Applicant’s troubled
finances in the early 1990s were caused by several family crises including the serious illnesses of his
in-laws, and the expenses associated with the death of his grandfather. Applicant’s corporate credit
card debt grew delinquent because of the failure of his ex-employer to reimburse him after
terminating his employment.
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Applicant resolved the debts that accrued in the early 1990s by filing for Chapter 13
bankruptcy in 1996 (subparagraph 1.a). His compliance with the plan led to a discharge of the
petition in 1999. He disputed the corporate credit card delinquency, as alleged in subparagraph 1.b,
in good faith. After his dispute failed, he arranged a payment plan to satisfy it. Financial
Considerations Mitigating Condition (FC MC) 20(b): the conditions that resulted in the financial
problem 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, and FC MC 20(e): the individual has a reasonable basis to
dispute the legitimacy of the past-due debt which is the cause of the problem, and provides
documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve
the issue, apply. 
Applicant disputed subparagraphs 1.c through 1.e upon discovering them on his credit report.
He retained a credit correction agency to conduct an investigation. It revealed that subparagraphs 1.c
and 1.d were his responsibility, and subparagraph 1.e was not his responsibility. He then made
arrangements to satisfy subparagraphs 1.c and 1.d, and has been steadily satisfying them since April
2007. 
Also, Applicant retained a credit counseling agency to help him with other debts not listed
in the SOR, and has taken a financial management class through the agency. FC MC 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, and FC MC 20(d): the individual initiated a
good-faith effort to repay overdue creditors or otherwise resolve debts, apply. Applicant has
mitigated the financial considerations security concern.
Whole Person Concept
Applicant’s financial problems recurred less than two years after the successful execution of
a Chapter 13 bankruptcy plan. The significance of this problem is outweighed by the circumstances
surrounding the accrual of the debt both before and after the Chapter 13 bankruptcy. In both
instances, it was caused primarily by circumstances beyond his control rather than irresponsible
spending or bad judgment. Applicant has been actively engaged in the resolution of his financial
problems, retaining a credit correction agency to investigate disputed debts, and a credit counseling
agency to help him pay undisputed ones. He has been making payments toward the satisfaction of
his debts for the past four months. Moreover, I was impressed with the organized manner he
discussed his finances at the hearing. Evaluating these variables in conjunction with the whole
person concept, I conclude Applicant has mitigated the security concern. Clearance is granted.
FORMAL FINDINGS
Paragraph 1 – Guideline F: 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
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DECISION
In light of all the circumstances presented by the record in this case, it is clearly consistent
with the national interest to grant or continue a security clearance for Applicant. Clearance is
granted.
Marc E. Curry
Administrative Judge