DATE:  December 11, 2007
In re:
-----------------
SSN:  ------------
Applicant for Security Clearance
)
)
)
)
)
)
)
)
ISCR Case No. 06-11903
DECISION OF ADMINISTRATIVE JUDGE
ELIZABETH M. MATCHINSKI
APPEARANCES
FOR GOVERNMENT
Fahryn Hoffman, Esq., Department Counsel
FOR APPLICANT
Pro se
SYNOPSIS
Applicant is legally responsible for about $15,643 in delinquent consumer credit debt largely
incurred in or before 2003 when she and her spouse were still together. She applied in November
2007 for consumer credit counseling assistance and has taken steps to reduce her health care costs
through applying for new health insurance and for veteran’s benefits. Yet financial considerations
are not fully mitigated where she has had to rely on an overdraft account to meet her expenses, and
is counting on help from others for the funds to make promised payments to creditors. Clearance is
denied.
STATEMENT OF THE CASE
On her November 2005 e-QIP, Applicant listed her military rank as E-3, senior airman. (Ex. 1) The E-3 rate1
is usually that of an airman first class. The senior airman rate is E-4.
2
The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a
security clearance for Applicant. As required by ¶ E3.1.2 of Department of Defense Directive 5220.6
(Jan. 2, 1992), as amended, DOHA issued a statement of reasons (SOR) on July 10, 2007, detailing
the basis for its decision–security concerns raised under Guideline F (financial considerations) of the
revised Adjudicative Guidelines (AG) issued on December 29, 2005, and implemented by the
Department of Defense effective September 1, 2006. The guidelines were provided to Applicant
when the SOR was issued. Applicant answered the SOR on August 16, 2007, and elected to have
a hearing before an administrative judge. The case was assigned to me on October 2, 2007.
I convened a hearing on November 7, 2007, to consider whether it is clearly consistent with
the national interest to grant or continue a security clearance for Applicant. Four government exhibits
(Ex. 1-4) were admitted into evidence and Applicant testified, as reflected in a transcript received
on November 16, 2007.
The record was open until November 16, 2007, for Applicant to submit documents pertinent
to her financial situation. Applicant timely submitted seven exhibits to which the government had
no objections. The documents were marked and admitted as Exhibits A-G.
FINDINGS OF FACT
DOHA alleged under Guideline F that Applicant owes delinquent debt totaling $21,638 to
seven creditors (SOR ¶¶ 1.a–1.g). Applicant admitted the debts when she answered the SOR. She
averred they were in the process of being resolved with her future ex-husband's cooperation to
assume half of the debt since it was incurred just before and during their marriage. As for her share
of the debt, she indicated she had dropped her health insurance to obtain a little extra money to pay
them and she was working with credit counselors. Yet she testified at her hearing that she dropped
her insurance for only one month as she could not afford to do so due to ongoing medication costs
and she was not seeking assistance in resolving her debt.
After a thorough consideration of the pleadings, exhibits, and hearing transcript, I make the
following factual findings.
Applicant is a 34-year-old administrative assistant who is a contract employee at a federally
funded research and development laboratory. She has been separated from her spouse since May
2003, and supports herself on her salary. Applicant has no dependents.
Applicant was in the United States Air Force from September 1992 to May 2000. She was
granted an honorable discharge.  Applicant held a secret-level security clearance with no security1
incidents while she was in the service.
Applicant married her spouse in June 1999. He had recently been discharged from the
military and was unemployed. She bought their wedding rings for $2,300 on her credit card (SOR
¶ 1.f). He told her that he would take care of the repayment. Some payments were made but a $1,933
3
delinquent balance was eventually charged off in March 2003 with $287 past due. In June 1999, they
purchased furniture (SOR ¶ 1.d) and a washer and dryer (SOR ¶ 1.c) for their new home on credit
accounts opened only in Applicant’s name.  A debt balance of $3,992 for the furniture was charged
off and placed for collection in May 2003. A debt balance of $448 for the washer and dryer was
referred for collection in July 2002.
Following her discharge from the service in May 2000, Applicant worked as an office
manager for an investment management firm until July 2002. She resigned when she became tired
of the lengthy commute, and was unemployed until October 2002. She then worked as a sales clerk
for less than six months. From March 2003 to November 2004, she was employed as an
administrative assistant at a corporation that does defense work. She was laid off due to lack of a top
secret clearance. Applicant separated from her spouse in mid-May 2003, and moved to her own
apartment. 
Applicant was unemployed from November 2004 to April 2005. She collected unemployment
compensation of $700 every two weeks. In April 2005, she started with her present employer, a
subcontractor for a federally-funded research and development laboratory located on the military
installation where she had been stationed previously. On November 10, 2005, Applicant executed
an electronic questionnaire for investigations processing (e-QIP).  She responded “Yes” to question
28 a. [“In the last 7 years, have you been over 180 days delinquent on any debt(s)?”] and disclosed
an $800 furniture debt (SOR ¶ 1.d) owed since July 1999, a $500 credit card obligation due since
June 1999 (SOR ¶ 1.c) for a washer and dryer, a $1,500 credit card debt unpaid since April 1999
(SOR ¶ 1.f), a retail charge debt of $1,000 incurred in June 2004 (not alleged, settled in June 2004
after sent for collection), and a $1,000 personal loan debt due since February 1999 (SOR ¶ 1.a).
Applicant explained that she had just paid off her car loan and would be working on her debt that
she attributed to unemployment and marital separation. Applicant responded “No” to question 28.b
[“Are you currently over 90 days delinquent on any debt(s)?”]. Applicant was granted an interim
secret-level clearance for her duties.
A check of Applicant’s credit in July 2006 revealed previously undisclosed debts: telephone
charges of $77 in collection since September 2004; retail credit card charges of $77 due since
December 2004; a charged off credit card debt of $431 (SOR ¶ 1.b); and a $1,610 past due credit
card balance in collection (SOR ¶ 1.e). The furniture debt that she had listed in the amount of $800
was reportedly delinquent in the amount of $6,132 (SOR ¶ 1.g). No progress was reported toward
resolving those debts she had listed on her security clearance application with the exception of
settling the $1,000 retail charge debt  after it had been referred for collection. Applicant also owed
overdraft charges of about $500 largely due to costs incurred to repair her vehicle ($300 to $500 in
small expenses and $545 when the car got broken into) from May 2003 to September 2006, moving
expenses, and groceries.
In April 2007, Applicant was asked by DOHA to provide documentation showing that she
had satisfied or was making payments on her delinquent debt. Applicant furnished documentation
showing she had settled on March 17, 2006, her account with the retailer that had reported a $77 past
due balance on her July 2006 credit report. Applicant provided a personal financial statement
showing that with monthly payments of $50 on a $500 overdraft debt and $30 on a $600 MasterCard
debt,  she was operating at a monthly deficit of $66. Applicant had monthly prescription costs of $65
plus an additional $40 per quarter, medical and dental insurance costs totaling $454, and yearly
4
office visit co-pays totaling $150. She added that she owes back taxes of $2,000 for 2005 and $755
for 2006. Applicant submitted a recent credit report of March 9, 2007, confirming she was not
making payments on her delinquent debt, which she acknowledged except for the $77 retail debt:
See credit report for outstanding debts. Have not been making regular payments on
most of the older ones because it was debt credited for the wedding and once I was
married. I am not paying all of that debt alone, nor can I afford it. A settlement has
to be arranged within the divorce as to who will pay what. The items that were debt
under my name and my name only that had nothing to do with my spouse or marriage
have been paid. (Ex. 2)
 
A subsequent check of her credit in May 2007 showed no payments on those debts in
collection status. The financial history of her delinquent accounts is set forth in the following table.
Debt as alleged in SOR Delinquency history Payment status
¶ 1.a $3,970 credit card debt
written off
Installment loan $7,500
opened Apr 99; paid on time
until Feb 01; $3,970 written
off Nov 02.
Unpaid, disputing with her
spouse that she is solely
responsible.
¶ 1.b $431 credit card debt
charged off
Revolving charge opened
May 96; high balance $2,125;
$448 written off with $202
past due Dec 03, balance
$431. Reported as past due
May 07.
Unpaid.
¶ 1.c $524 retail store
installment account in
collection
$448 for collection Jul 02;
$661 balance Dec 06.
Spouse took the washer and
dryer, was supposed to pay
her and has not. Unpaid.
¶ 1.d $5,588 furniture debt in
collection
Installment account opened
Jun 1999; $3,992 credit limit
charged off May 03, for
collection, $6,132 balance
reported May 06, but listed at
$5,496 Feb 07 and $5,588
May 07
Unpaid.
¶ 1.e $1,743 credit card debt
in collection
$1,230 for collection Aug 02;
$1,743 balance May 07.
Unpaid.
Debt as alleged in SOR Delinquency history Payment status
The debt in SOR ¶ 1.g is very likely the furniture debt. On the March 2007 credit report, the assignee was2
reportedly collecting for a bank as original creditor. The account number listed for that debt appears on the May 2007
credit report under the name of the same assignee, but with the original creditor listed as the furniture company. It is
likely that the furniture company had its financing through a bank, and the date the account with the creditor bank was
opened is consistent with when Applicant would have been buying furniture for her new residence. She was married in
June 1999 and the account was opened that same month. 
5
¶ 1.f $3,250 credit card debt
in collection
Revolving charge opened
May 99 for their wedding
rings; original balance
$2,300; $1,933 charged off
Mar 03 with $287 past due;
$3,250 balance in collection 
Dec 06.
Spouse promised to repay her
but has not. Still outstanding.
¶ 1.g $6,132 in collection See ¶ 1.d same debt Unpaid.2
After she received the SOR, Applicant contacted her spouse by email on August 6, 2007, and
demanded that they discuss their marital debt. Applicant’s spouse responded that he would pay
$3,753 (half of the debts in SOR ¶¶ 1.a, 1.b, 1.c, 1.e, and 1.f minus $500 for tires on her car and $700
for her cell phone) plus half of the actual furniture debt. He believed the furniture debt was about
$3,000 total rather than the $5,588 reported as delinquent. Applicant’s spouse denied any obligation
for the debt in SOR ¶ 1.g as he believed it was a consolidation of Applicant’s debts incurred before
they met. Applicant responded to him that she did not recall having to consolidate before their
marriage, but she would have to take his word for it. He indicated that she should attempt to settle
with her creditors for lesser amounts, and resolve the smaller debts first. She replied she did not have
any extra money and asked for his assistance in keeping her accountable (“I’m not accountable to
anyone but myself and that makes it difficult for me to get anything done.”).
On August 9, 2007, Applicant contacted a for-fee debt counseling company via the Internet
concerning the process of resolving her debt. On August 10, 2007, Applicant informed her spouse
that she wanted to discuss resolution of the debt via a debt counselor. He told her that he was
working on getting her the money to pay his share of the debt and that she should focus on
determining the extent of the debt. Applicant submitted an online application for credit counseling
through a debt counseling organization. Applicant did not pursue any debt counseling or repayment
through a debt management plan at that time due to her spouse’s lack of cooperation.
For about a month from mid-August 2007, Applicant dropped her health insurance to give
her extra funds, and she stopped taking medications for her depression after ten years. She resumed
health insurance coverage as she realized she needed her medications.
Applicant testified that the debt in SOR ¶ 1.a was a credit card that she used before her marriage when her3
spouse was in the process of obtaining his discharge from active duty military service (Tr. 29, 37). The March 2007
credit report indicates the debt in ¶ 1.a was an installment account with 60 months terms. The debt in SOR ¶ 1.b was a
revolving charge account.
Recent earnings statements reflect net pay at $833.07 biweekly after deducting $42 for dental insurance and4
$467.89 for medical insurance. Her net pay without deductions for medical costs was $1,277.18, so her monthly net is
about $2,110.25. (Ex. D) 
6
As of her November 7, 2007, hearing, Applicant and her spouse had not come to any
agreement on resolving the debts incurred during their marriage.  Applicant and her spouse plan to3
divorce but have not done so as they cannot afford the costs of filing. Applicant has been unable to
contact her spouse by cell phone. She does not have the funds to pay her old debts and lives from
paycheck to paycheck.  Applicant is afraid to contact her creditors directly (“I feel very overwhelmed4
right now and there is really not much I can say to them. I feel like right now I’m doing what I can,
living paycheck to paycheck, and I feel very strapped right now.” Tr. 41-42). She estimates that her
monthly expenses, which include health and dental insurance costs of $509.89 and cell phone costs
of $100, exceed her monthly income by about $300. Applicant is scheduled to begin repaying her
income tax debt at $100 per month starting in late November 2007. The 2005 tax debt was because
she had no taxes withheld from her unemployment compensation. She had no prior experience with
unemployment compensation and did not realize that taxes had to be paid on that income. The 2006
tax debt is attributed to her employer’s failure to timely honor her request to reduce her exemption
to zero and to then withhold an additional $20 per pay period. Available earnings statements show
that she was claiming zero exemptions and having the additional $20 withheld for taxes as of
September 10, 2007, if not before.
As of November 2007, Applicant had taken steps to reduce her medical insurance costs by
about $250 a month through applying for new health insurance. On November 15, 2007, Applicant
enrolled online in a nonprofit debt management program. On November 16, 2007, Applicant applied
for health benefits from  the Department of Veterans Affairs.
Applicant does not have any active credit card accounts. As of April 2007, she owed $735
on a credit card account with a $750 limit that she had opened in December 2006. She made $30
monthly payments on the card until June when she closed the account and arranged to pay $50 per
month toward the balance, which was about $900 as of her hearing. Applicant estimated her
checking account balance at $14. Applicant was making her rent and car payments on time. She was
planning to accept the offers of others for financial assistance in order to be able to make the monthly
$100 income tax and $50 credit card payments she agreed to. Collection agencies were not
aggressively pursuing collection of the old debts as of November 2007.
POLICIES
“[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S.
518, 528 (1988). As Commander in Chief, 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.” Id. at 527.
The President authorized the Secretary of Defense or his designee to grant applicants eligibility for
7
access to classified information “only upon a finding that it is clearly consistent with the national
interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb.
20, 1960). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with
the national interest to grant or continue his security clearance.” ISCR Case No. 01-20700 at 3 (App.
Bd. Dec. 19, 2002).
The revised Adjudicative Guidelines set forth potentially disqualifying conditions (DC) and
mitigating conditions (MC) under each guideline. In evaluating the security worthiness of an
applicant, the administrative judge must also assess the adjudicative process factors listed in ¶ 6.3
of the Directive. The decision to deny an individual a security clearance is not necessarily a
determination as to the loyalty of the applicant. See Exec. Or. 10865 § 7. It is merely an indication
the applicant has not met the strict guidelines the President and the Secretary of Defense have
established for issuing a clearance. 
CONCLUSIONS
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. (AG ¶ 18) Applicant and her spouse overspent at the beginning of
their marriage. With her spouse just out of the service and without a job, Applicant charged the
$2,300 cost of their wedding rings to her revolving charge account in May 1999. The following
month, they bought over $3,000 worth of furniture on her credit. They handled the credit extended
to her irresponsibly, and several accounts became delinquent while they were still together (SOR ¶¶
1.a, 1.c, 1.d, 1.e, 1.f). A credit card account (SOR ¶ 1.b) was written off after Applicant and her
spouse had separated. Applicant is legally responsible for the debt, even if her spouse also enjoyed
the goods and services extended to them in her name only. As of her hearing in November 2007, the
debts were unresolved. Disqualifying conditions ¶ 19(a) (inability or unwillingness to satisfy debts),
and ¶ 19(c) (a history of not meeting financial obligations) apply.
Applicant’s ability to repay the delinquent debt was compromised by her marital separation
in May 2003 and her unemployment from November 2004 to April 2005. Her unemployment
compensation of about $1,400 a month was not sufficient to pay her living expenses, and Applicant
relied on overdraft protections to pay for necessities such as groceries and gasoline, as well as repairs
to her vehicle. Her employer’s failure to adjust her exemptions and tax withholding amounts was a
factor outside of her control that left her more heavily in debt. She also had significant out-of-pocket
medical costs related to treatment for depression, including the cost of insurance. These are the type
of factors contemplated within mitigating condition ¶ 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), but her history of spending beyond her means is not
mitigated by ¶ 20(b).
The allegation does not represent additional indebtedness, but is resolved against Applicant because she had5
not taken any action toward satisfying the debt in ¶ 1.d which is likely the same debt.
8
Applicant remains under significant financial pressure. She reports a negative cash flow after
payment of monthly expenses, and has only about $14 in her checking account. Although the
Directive does not require that an applicant be debt free, Applicant presents a mixed record with
regard to her recent handling of her financial situation. She opened a new credit card account in
December 2006 with a credit limit of $750. As of November 2007, she owed about $900 on the
account. While she showed good judgment in cancelling the card, and arranging to repay the debt
at $50 monthly, the fact that the debt balance exceeds her credit limit bears troubling implications
for her ability to live within her means. She is paying about $100 per month for a cellular phone
which seems excessive given her limited resources. Applicant has admitted that she feels
overwhelmed by her financial situation. Her recent applications for consumer credit counseling
assistance and for more affordable health insurance warrant consideration of MC ¶ 20(d) (the
individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts), but it
is too soon to safely conclude that her financial problems are likely to be resolved in the near future.
Even if she is successful in reducing her monthly health insurance costs by $250, she would still
need to rely on financial help from friends and/or family that has yet to materialize.
Whole Person Analysis
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. AG ¶ 2(a). Applicant
held a clearance while she was in military and abided by the rules and regulations concerning the
safeguarding of classified information. She is also credited for being candid about her delinquencies,
but indicated in November 2005 that she would be working on her delinquent debts. She settled two
delinquent consumer credit debts owed to retailers, but had not made any payments on the accounts
alleged in the SOR as of November 2007. Her recent efforts to resolve her debts are preliminary and
not enough to overcome the concerns for her financial judgment.
FORMAL FINDINGS
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: Against Applicant5
DECISION
In light of all of the circumstances in this case, it is not clearly consistent with the national
interest to grant or continue a security clearance for Applicant. Clearance is denied.
9
Elizabeth M. Matchinski
Administrative Judge