KEYWORD: Financial
DIGEST: Applicant filed for Chapter 13 bankruptcy on three occasions between May 2001 and
September 2003.  Each case was dismissed as a result of failure to make payments. The SOR alleged
approximately $34,480 in delinquent debt. Several accounts are resolved but over $21,000 in
delinquent debt remains with no plan in place to resolve the debts. Although Applicant expects to
pay her debt from money she expects to receive from her late husband's estate, legal proceedings are
pending and the outcome is uncertain. Applicant's current monthly expenses exceed her monthly
income.  Her financial situation is poor and it is unlikely that her financial situation will be stabilized
in the near future. The trustworthiness concern is not mitigated under financial considerations.
Assignment to a sensitive position is denied.
CASENO: 06-08070.h1
DATE: 09/28/2007
DATE:  September 28, 2007
In re:
-------------------
SSN:  ------------
Applicant for Public Trust Position
)
)
)
)
)
)
)
)
ADP Case No. 06-08070
DECISION OF ADMINISTRATIVE JUDGE
ERIN C. HOGAN
APPEARANCES
FOR GOVERNMENT
Julie R. Edmunds, Esq., Department Counsel
FOR APPLICANT
Pro Se
2
SYNOPSIS
Applicant filed for Chapter 13 bankruptcy on three occasions between May 2001 and
September 2003.  Each case was dismissed as a result of failure to make payments. The SOR alleged
approximately $34,480 in delinquent debt. Several accounts are resolved but over $21,000 in
delinquent debt remains with no plan in place to resolve the debts. Although Applicant expects to
pay her debt from money she expects to receive from her late husband's estate, legal proceedings are
pending and the outcome is uncertain. Applicant's current monthly expenses exceed her monthly
income.  Her financial situation is poor and it is unlikely that her financial situation will be stabilized
in the near future. The trustworthiness concern is not mitigated under financial considerations.
Assignment to a sensitive position is denied.
 This action was taken under Executive Order 10865, dated February 20, 1960, as amended; and  Memorandum1
from the Deputy Under Secretary of Defense Counterintelligence and Security, titled "Adjudication of Trustworthiness
Cases," dated November 19, 2004.
 AE B is a one page letter from the US Department of Justice, dated September 25, 2007, pertaining to debt2
alleged in SOR ¶ 1.n; AE C is a one page statement pertaining to the debt alleged in ¶ 1.g; and AE D is a three page
statement from the attorney handling the Applicant's interests in her late husband's estate, dated September 25, 2007. 
 Tr. at 5; Gov 1. 3
 Tr. at 16; 25, 27.4
3
STATEMENT OF CASE
On July 21, 2003, Applicant submitted an application for a position of public trust. The
Defense Office of Hearings and Appeals (DOHA) declined to grant the application under
Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (Jan. 2, 1992), as amended (the "Directive"); and the Revised Adjudicative Guidelines,
approved December 29, 2005 and effective September 1, 2006.  On April 26, 2007, DOHA issued1
Applicant a Statement of Reasons (SOR) detailing the basis for its decision. The SOR, which is in
essence the administrative complaint, alleged security concerns under Guideline F, Financial
Considerations.
In a sworn statement notarized on May 15, 2007, Applicant responded to the SOR allegations
and elected to have a hearing before an administrative judge. The case was assigned to another
administrative judge on July 23, 2007 but was transferred to me on August 8, 2007.  A Notice of
Hearing was issued on August 8, 2007, scheduling the hearing for August 30, 2007.  The hearing was
held as scheduled. The government offered seven exhibits which were admitted as Government
(Gov) Exhibits 1-7 without objection.  Applicant offered one exhibit that was admitted as Applicant
Exhibit (AE) A without objection.  The record was held open until September 13, 2007, to allow
Applicant the opportunity to submit additional documents.  On September 13, 2007, Applicant
requested additional time to submit additional documents. An extension was granted until September
21, 2007. Applicant did not respond and requested an additional extension until September 25, 2007.
On that date, she submitted three documents that were marked and admitted as AE B-D without
objection.  The transcript (Tr.) was received on September 12, 2007.  2
FINDINGS OF FACT
In her SOR response, Applicant admits the allegations in SOR ¶¶ 1.a, 1.b, 1.c, 1.i, and 1.w.
She denies the allegations in SOR ¶¶ 1.d - 1.h, 1.j - 1.v, and 1.x -1.y. Applicant’s admissions are
incorporated herein. In addition, after a thorough and careful review of the pleadings, exhibits, and
testimony, I make the following findings of fact.
Applicant is a 62- year-old woman employed with a Department of Defense contractor who
is seeking a position of public trust.  She was married for 44 years but was recently widowed. She3
has a  42-year-old son, and two nine-year-old granddaughters.  She is an enrollment specialist and4
 Tr. at 16-17.5
 Gov 2 at 8.6
 Tr. at 17-19.7
 Tr. at 29; Gov 2 at 1; Gov 3 at 1; Gov 5 at 2; Gov 6 at 2.8
 Tr. at 30; Gov 2 at 1; Gov 5 at 1; Gov 6 at 2. 9
 Tr. at 32; Gov 2 at 1; Gov 3 at 1; Gov 5 at 1; Gov 6 at 2. 10
 Tr. at 31.11
 Gov 2 at 5. 12
 Tr. at 30; Gov 2. 13
4
has worked for her current employer since July 2003.  From January 1988 to March 2002, she5
worked for another company. She lost her job due to corporate downsizing. When she departed, she
received $25,000 from the company.  Aside from a few seasonal part-time jobs, Applicant was6
unemployed between March 2002 to July 2003.   7
In May 2001, Applicant filed for Chapter 13 bankruptcy. Her case was dismissed in
December 2001 for failure to make payments.   In January 2002, she again filed for Chapter 138
bankruptcy.  Her case was dismissed in September 2003 for failure to make payments.  In September9
2003, she filed for Chapter 13 bankruptcy.  The bankruptcy was dismissed in June 2004 for failure
to make payments.10
Applicant filed for bankruptcy because she could not pay the monthly bills with her income
and the money her husband gave her each month. Her husband gave her $1,000 a month to apply
towards the household expenses.  Applicant admits that she incurred a lot of credit card debt. In a11
signed, sworn, statement, dated December 22, 2006, she states, 
The consumer credit card debts were mine. I spoiled our son and our granddaughter
and spent too much money on them. My income combined with the $1,000 monthly
allowance my spouse provided would not cover our monthly debts and obligations.12
Applicant filed for bankruptcy as a sole individual each time she filed. Her husband was
abusive and she was afraid of him so she did not include his name on the bankruptcy petitions.  His
income was nonetheless used to determine the amount of monthly payments Applicant was required
to make under the Chapter 13 plan.  She states that she was unable to keep up with payments based
on her income and the money her spouse gave her for monthly expenses.   13
 
Schedule I, Current Income of Individual Debtors, in Applicant's Chapter 13 bankruptcy filed
in 2003, indicates that Applicant's net monthly income was $1,571.  Her husband's net monthly
income was $1,083. They had a combined net monthly income of $2,654. Schedule J, Current
Expenditure of Individual Debtors, lists total monthly expenses of $2,004, leaving $650 left over
 Gov 5 at 20-21.14
 Gov 5 at 6.15
 Tr. at 21, Gov 2.16
 AE A. 17
 Tr. at 22; Gov 2. 18
 Tr. at 23. 19
 AE D.20
Gov 1. 21
 Gov 4, Schedule F.22
5
after expenses.   Applicant received $1,000 from her husband to apply towards the monthly14
expenses. Combined with her income, she had approximately $2,571 to pay the bills. After paying
the monthly expenses, this would leave her approximately $567 each month.
On July 9, 2004, Applicant completed a personal financial statement which listed her net
monthly income as $1,581.  Her husband's net monthly income is listed as $1,440.  Their combined
net monthly income was $3,021.44.  Their total monthly expenses were $2,286, leaving a net
remainder of $785.   This did not include payments to her creditors.15
Shortly after the third Chapter 13 bankruptcy was dismissed in June 2004, Applicant's house
was foreclosed and sold at auction to a realtor. She and her husband rented the house from the realtor
until April 2006. The realtor notified them he intended to put the house on the market.  Applicant
left her husband on April 17, 2006.  She decided to leave because her husband's abusive behavior
was affecting her nine-year-old granddaughter.  About two weeks later on May 2, 2006, Applicant's16
husband shot himself in the head.  He died on May 5, 2006.  The day before he shot himself, he17
changed the beneficiary on his life insurance policy and his retirement account to his
granddaughters.   18
Applicant retained a lawyer and filed a claim for payment of her husband's life insurance
proceeds, and her husband's retirement system funds.  She anticipates getting approximately $15,000
in life insurance and $42,000 from his retirement but her lawyers have advised her there is a
possibility she may only get $37,000.   Her attorney indicates that a claim has been filed for the19
same funds by the grandchildren. It will take several months for the court to reach a decision.   20
On September 10, 2004, Applicant completed a public trust position application (SF 85-P).21
A subsequent background investigation revealed the following accounts were listed in her 2003
bankruptcy filing:  a $1,236 account (SOR ¶ 1.d); a $1,581 debt owed to an insurance company22
(SOR ¶ 1.e;); a $4,300 delinquent account (SOR ¶ 1.f); a $2,880 delinquent loan (SOR ¶ 1.g); a $260
consumer loan account (SOR ¶ 1.h); a $3,000 department store credit card account (SOR ¶ 1.i); a
$500 credit card account (SOR ¶ 1.j); a $666 credit card account (SOR ¶ 1.k); a $1,500 account
(SOR ¶ 1.l); a $762 telephone account (SOR ¶ 1.m); a $10,000 delinquent student loan account
 Id. at 14 - 17.  23
 Tr. at 51-52; Gov 2 at 8. 24
 Gov 5.25
 Id. 26
 AE B.27
 AE C. 28
 Tr. at 34-35, 42-44, 53, 57-60.29
 See Gov 4, Schedule F. 30
 Tr. at 36, 54.31
 Tr. at 40, 45, 48, 55.32
 Tr. at 49; Gov 2 at 7-8.33
6
(SOR ¶ 1.n); a $350 delinquent telephone account (SOR ¶ 1.o); a $550 delinquent cell phone account
(SOR ¶ 1.p); a $467 delinquent charged off credit card account (SOR ¶ 1.r).23
In addition to the debts listed in the bankruptcy, Applicant had a judgment entered against
her for unpaid rent in December 2006 (SOR ¶ 1.q).  A credit report dated February 28, 2007,24 25
revealed additional delinquent debts incurred after the last Chapter 13 bankruptcy was dismissed.
The debts include a $441 delinquent cell phone account placed for collection in July 2003 (SOR ¶
1.s), a $92 cell phone account charged off in 2005 (SOR ¶ 1.t); a $964 cell phone account, placed
for collection in April 2006 (SOR ¶ 1.u); a $714 account  placed for collection in August 2006 (SOR
¶ 1.v); a $311 cell phone account, placed for collection in November 2006 (SOR ¶ 1.w); a $531
account charged off in January 2006 (SOR ¶ 1.x); and a $714 credit card account charged off in
January 2006 (SOR ¶ 1.y).26
The $10,000 student loan account alleged in SOR ¶ 1.n is resolved.  Applicant paid her
student loan in full on December 29, 2005.  The obligation for her husband's student loan was closed
due to his death.   Applicant also provided proof that $2,880 debt alleged in SOR ¶ 1.g was paid in27
full.28
During the hearing, Applicant denied the debts alleged in SOR ¶¶ 1.d, 1.e, 1.j, 1.k, 1.l, 1.r,
1.u, 1.v, 1.x, and 1.y because she does not recognize them.  The debts alleged in SOR ¶¶ 1.d, 1.e,29
1.j, 1.k, 1.l, and 1.r were listed included in her Chapter 13 bankruptcy that was filed in 2003.   She30
admits to owing the debts alleged in SOR ¶¶ 1.f and 1.s, but claims the balances are not that high.31
She claims the debts alleged in SOR ¶¶ 1.h, 1.m, 1,o and 1.t are paid in full.  The debt alleged in32
SOR ¶ 1.p is a cell phone account she took out in her name for a son's friend. He never paid the bill.33
She claims her former landlord has no intentions of collecting the $2,661 judgment entered against
 Tr. at 51-53.34
 Tr. at 69-70; Gov 2 at 6 and 8.  35
 Tr. at 22, 25.36
 Tr. at 24.37
 Tr. at 60-61. 72-74.38
 Tr. at 63. 39
 Tr. at 64-69. 40
 Tr. at 69-70. 41
 Tr. at 72. 42
 Tr. at 67, 79. 43
7
her for unpaid rent (SOR ¶ 1.q).   No additional documentation was provided to verify her assertions34
regarding the debts in this paragraph. 
In 2005, Applicant's wages were garnished by the IRS.  She forgot to include as income on
her 2003 federal income tax return the $25,000 severance pay she received when she was laid off.
The balance due was approximately $7,000 to $8,000.  Her wages were originally garnished $250
per pay period.  After her husband passed away, she requested the garnishment be reduced to $25
per pay period. She claims to have paid $3,847 towards this debt.35
Applicant intends to start resolving her remaining delinquent accounts when the issues
dealing with her late husband's life insurance policies and retirement accounts are resolved.  She36
admits that her credit is "a mess" at the moment.  She currently supports her grand-daughter and her37
grand-daughter's 11-year-old half brother. Both currently live with her. Her son lives with her
periodically. He is unemployed and does not help with expenses. He intends to get a job at some
point.38
Applicant's current net monthly income is approximately $1,777.  Her monthly expenses39
include  rent: $728; groceries: $200; utilities: $275; car: $425; and medical expenses: $135. Her IRS
garnishment is approximately $50 per month ($25 per paycheck).  Her monthly expenses total40
approximately $1,813. Her delinquent debt payments are not included in this figure. 
Applicant has never attended financial counseling.  She considered filing for bankruptcy41
under chapter 7 but claims her attorneys advised her against it.   She has no other credit card42
accounts and is not aware of any other delinquent debts.   She did not provide information43
pertaining to her work performance.
POLICIES
 Department of the Navy v. Egan, 484 U.S. 518, 527 (1988).  44
 Revised Adjudicative Guidelines, ¶ 18.45
 Directive, ¶ E2.2.1.46
 Id.47
 Id.48
8
The President has “the authority to . . . control access to information bearing on national
security and to determine whether an individual is sufficiently trustworthy to occupy a position …
that will give that person access to such information.”   In Executive Order 10865, Safeguarding44
Classified Information Within Industry (Feb. 20, 1960), the President set out guidelines and
procedures for safeguarding classified information and determining trustworthiness within the
executive branch. 
To be eligible for a security clearance or access to sensitive information, an applicant must
meet the security guidelines contained in the Directive.  Enclosure 2 of the Directive sets forth
personnel security guidelines, as well as the disqualifying conditions and mitigating conditions under
each guideline.  The adjudicative guideline at issue in this case is: 
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. An individual who is financially overextended is at risk of
having to engage in illegal acts to generate funds.45
Conditions that could raise a trustworthiness concern and may be disqualifying, as well as those
which could mitigate security concerns pertaining to this adjudicative guideline, is set forth and
discussed in the conclusions below.
“The adjudicative process is an examination of a sufficient period of a person’s life to make
an affirmative determination that the person is eligible for a security clearance.”    An administrative46
judge must apply the “whole person concept,” and consider and carefully weigh the available,
reliable information about the person.   An administrative judge should consider the following47
factors: (1) the nature, extent, and seriousness of the conduct; (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 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.   48
Initially, the Government must present evidence to establish controverted facts in the SOR
that disqualify or may disqualify the applicant from being eligible for access to classified
 Directive, ¶ E3.1.14.49
 Directive, ¶ E3.1.15.50
 ISCR Case No. 01-20700 at 3 (App. Bd. December 19, 2002).51
 Directive, ¶ E2.2.2.52
9
information.  Thereafter, the applicant is responsible for presenting evidence to rebut, explain,49
extenuate, or mitigate the facts.   An applicant “has the ultimate burden of demonstrating that it is50
clearly consistent with the national interest to grant or continue his security clearance.”  Any doubt51
as to whether access to classified information is clearly consistent with national security will be
resolved in favor of the national security.  The same rules apply to trustworthiness determinations52
for access to sensitive positions.
CONCLUSIONS
I have carefully considered all the facts in evidence and the legal standards. The government
has established a prima facie case for disqualification under Guideline F - Financial Considerations.
and Guideline E - Personal Conduct. 
Based on all the evidence, Financial Considerations Disqualifying Conditions (FC DC) ¶ 19(a)
(inability or unwillingness to satisfy debts), ¶ 19(c) (a history of not meeting financial obligations),
and ¶ 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) apply to Applicant's case. Applicant has had difficulty meeting her financial obligations
since 2001 when she filed her first bankruptcy. While she has made some progress, approximately
$21,680 in delinquent debts remain unresolved. Her monthly debts are currently higher than her
monthly income. Her financial situation is poor. FC MC ¶ 19(e) applies because even though
Applicant claims her husband only provided her a limited amount each month for expenses, it appears
that it was sufficient to pay the monthly living expenses. A large part of her financial problems were
caused due to excessive credit card expenses which she could not afford. She admits to spending too
much money on her son and granddaughter. 
Applicant has the opportunity to mitigate the trustworthiness concerns. Financial
Considerations Mitigating Condition (FC MC) ¶ 20(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) does not apply.  Applicant
currently has numerous unresolved delinquent accounts.  She has had continuous financial problems
over the past six years.  Her monthly expenses are approximately $36 more than her monthly income.
Her financial situation remains precarious.
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)
applies, in part. Applicant was unemployed for 16 months between March 2002 and July 2003. This
adversely affected her financial situation. However, she received approximately $25,000 in severance
10
pay when she left her previous employer which could have helped with the loss of income during that
period. Her separation from her husband in May 2006, his suicide, and his decision to change the
beneficiary on his life insurance and retirement accounts prior to his suicide is factor that is beyond
her control. Although she is seeking to obtain some of the benefits through legal proceedings, the
legal proceedings are pending. It is uncertain that any money received would improve her financial
situation over the long term.  Her irresponsible financial spending habits existed for several years
prior to her husband's untimely death.  She admits that she incurred a lot of credit card debt by
spending more than she could afford. Her current expenses exceed her current income and she has
not presented sufficient information as to the initial steps she is taking to manage her financial
situation. Although Applicant experienced conditions that were beyond her control that impacted her
financial situation, her track record of financial irresponsibility contributed to her financial situation
since at least 2001. Her decision to use her credit card to purchase items for family members that she
could not afford was within her control. For these reasons, FC MC ¶ 20(b) is given less weight. 
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) does not apply.
Applicant has not attended any formal financial counseling.  She currently supports  her 42-year-old
son, her nine-year-old granddaughter and her granddaughter's 11-year-old half brother.  Her monthly
expenses exceed her monthly income.  With the added burden of supporting an unemployed adult son
and two young children, it does not appear that her financial problems will be resolved in the near
future. 
FC MC ¶ 20(d) (the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts) applies with respect to SOR ¶¶ 1.g and 1.n.  However, the remaining
delinquent accounts remain unpaid. Applicant attempted to resolve her financial situation by filing
for Chapter 13 bankruptcy on three occasions.  Filing for bankruptcy is a legally permissible way to
resolve one's accounts.  She was unable to follow through with her repayment plans. Although
Applicant intends to resolve her delinquent accounts if she succeeds in her claim filed against her late
husband's estate, a promise to pay one's debts in the future is not sufficient to mitigate the
trustworthiness concerns under financial considerations. 
While it is acknowledged that Applicant has suffered a tremendous tragedy over the past year,
her financial situation has been unstable for the past six years and is unlikely to improve in the future.
Applicant has not met her burden of proof to mitigate the financial considerations trustworthiness
concern. Guideline F is decided against Applicant.
In all adjudications, the protection of our national security is the paramount concern. The
objective of the trustworthy determination process is the fair-minded, commonsense assessment of
a person’s life to make an affirmative determination that the person is eligible for assignment to
sensitive duties. Indeed, the adjudicative process is a careful weighing of a number of variables in
considering the “whole person” concept. It recognizes that we should view a person by the totality
of their acts, omissions, motivations and other variables. Each case must be adjudged on its own
merits, taking into consideration all relevant circumstances, and applying sound judgment, mature
thinking, and careful analysis.
I have considered all the evidence and the “whole person” in evaluating Applicant’s
trustworthiness. Applicant did not provide information about her work performance. While her
11
financial situation was aggravated by some factors beyond her control, a lot of the delinquent debts
were incurred due to a lack of discipline and budgeting. It is unlikely that Applicant's financial
situation will improve in the future. It is not clearly consistent with the national interest to grant
Applicant eligibility for assignment to sensitive duties. Eligibility is denied.
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: AGAINST APPLICANT
Subparagraph 1.a: Against Applicant
Subparagraph 1.b: Against Applicant
Subparagraph 1.c: Against Applicant
Subparagraph 1.d: Against Applicant
Subparagraph 1.e: Against Applicant
Subparagraph 1.f: Against Applicant
Subparagraph 1.g: For Applicant
Subparagraph 1.h: Against Applicant
Subparagraph 1.i: Against Applicant
Subparagraph 1.j: Against Applicant
Subparagraph 1.k: Against Applicant
Subparagraph 1.l: Against Applicant
Subparagraph 1.m: Against Applicant
Subparagraph 1.n: For Applicant
Subparagraph 1.o: Against Applicant
Subparagraph 1.p: Against Applicant
Subparagraph 1.q: Against Applicant
Subparagraph 1.r: Against Applicant
Subparagraph 1.s: Against Applicant
Subparagraph 1.t: Against Applicant
Subparagraph 1.u: Against Applicant
Subparagraph 1.v: Against Applicant
Subparagraph 1.x: Against Applicant
Subparagraph 1.y: Against Applicant
DECISION
In light of all of the evidence presented in this case, it is not clearly consistent with the
national interest to grant Applicant eligibility for assignment to sensitive duties.  Eligibility is denied.
                                               
12
Erin C. Hogan
Administrative Judge