KEYWORD: Guideline F
DIGEST: Judge did not discuss whether the totality of Applicant’s efforts at debt resolution,
which included a bankruptcy discharge, established a good-faith effort to resolve debts.  
However, the Judge’s decision is supported by the weight of the record evidence.  Adverse
decision affirmed.
CASE NO: 10-03578.a1
DATE: 10/04/2012
DATE: October 4, 2012
In Re:
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Applicant for Security Clearance
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ISCR Case No. 10-03578
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
James B. Norman, Esq., Chief Department Counsel
FOR APPLICANT
Pro se
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On December 13, 2011, DOHA issued a statement of reasons (SOR) advising Applicant
of the basis for that decision—security concerns raised under Guideline F (Financial Considerations)
of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant
requested that the case be decided on the written record.  On July 24, 2012, after the close of the
record, Administrative Judge Rita C. O’Brien denied Applicant’s request for a security clearance.
Applicant timely appealed, pursuant to the Directive ¶¶ E3.1.28 and E3.1.30.  
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Applicant raises the following issues on appeal: whether the Judge erred by concluding that
her filing bankruptcy was not a good-faith effort to resolve debts and whether the Judge did not
properly assess her case under the whole-person concept.  For the following reasons, the Board
affirms the Judge’s unfavorable security clearance decision. 
The Judge made the following findings of pertinent fact: Applicant is 51 years old.  She is
divorced.  She and her mother live together, and her mother shares some of the household expenses.
In 1993, Applicant was diagnosed with moderate clinical depression.  She has been on various
medications for depression since 1997, with varying success.  Between 2009 and 2011, her
medication became less effective, her depression deepened, and she was less able to deal to deal
with her financial problems.  In early 2011, her doctor changed her medications, with positive
results. 
Applicant stated that her financial problems began in 2006, when she had back surgery and
did not work for three months.  Her medical disability income after the back surgery was 50 percent
of her usual salary.  At the same time, she had several large bills including repairs to her home and
her truck.  Eventually, she was unable to make the minimum payments on her credit cards, or meet
her other expenses.  Applicant stated that she attempted to resolve her past-due debts by working
with a credit solution company, but in the end she abandoned this approach because she was paying
fees to the credit solution company and no money was going to the creditors.  She also tried to
resolve her debts by borrowing money from relatives, withdrawing about $45,000 from her 401(k)
plan and using credit cards.  
Without factoring in an account she disputes, her delinquencies totaled $68,740 from
February 2010 to November 2011.  As of May 2011, Applicant had net monthly income of $1,835.
After paying her monthly expenses, she had a negative remainder of $458.  Applicant did not wish
to use bankruptcy to resolve her debts, but was advised to do so by her attorney.  She filed a Chapter
7 bankruptcy petition in July 2011.  At that point, her monthly expenses surpassed her monthly
income by $920.  The bankruptcy petition listed assets of $174,243 and liabilities of $248,664.
Applicant successfully discharged her bankruptcy in November 2011.  She completed counseling
as part of the bankruptcy process.  Applicant’s bankruptcy petition showed gambling winnings.  It
did not show gambling losses and there is no other documentation showing gambling debts.  There
is insufficient evidence in the record to conclude that gambling contributed to Applicant’s
delinquencies.  
The Judge reached the following conclusions: Applicant has a history of financial problems
dating from at least 2006.  Although Applicant’s debts started to become delinquent at least six years
ago, they are recent because they were resolved through bankruptcy only eight months ago.
Applicant’s bankruptcy is too recent to know if she will be able to remain solvent in the future.  Her
accumulation of significant delinquencies casts doubt on her reliability.  Several events occurred that
had a negative effect on Applicant’s ability to pay her bills.  However, Applicant has been working
steadily since 2000, and her mother shares in the household expenses.  It is unlikely that one
financially difficult period in 2006 would, by itself, have negatively affected her finances until 2011.
Full mitigation requires that an applicant act responsibly in relation to unforseen circumstances.
1“[T]he individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.”
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Applicant made some efforts to deal with her debts through contracting a credit solution company
but her other efforts involved borrowing from her family and her 401(k) which only put her further
in debt.  Mitigation applies because Applicant received counseling as part of the bankruptcy process,
and her debts were resolved when the petition was successfully discharged.  Although bankruptcy
is a legitimate option to resolve overwhelming debt, it does not qualify under the Appeal Board’s
jurisprudence as a good-faith effort.  Under the whole-person concept, over the past six years,
Applicant’s expenses significantly exceeded her income every month, and she accrued more than
$68,000 in delinquent debt.  It appears that her recurring depression played some part, as it worsened
in 2009, and likely contributed to her failure to file for bankruptcy before 2011.  Applicant’s
bankruptcy petition was discharged only six months ago.  Insufficient time has passed to be able to
evaluate whether Applicant can demonstrate the financial responsibility required of those who hold
security clearances.
Applicant asserts that the Judge did not fairly assess the whole-person concept in her case.
Concerning the issue of good-faith efforts to resolve her debts, she notes her attempts to resolve her
debts by contacting a credit solution company and by borrowing from her 401(k).  She notes that
these actions on her part were unsuccessful.  Applicant then voices her disagreement that a
“legitimate” method of bankruptcy is not a good-faith effort to resolve overwhelming debt.  She
argues that she understands the need for an individual to live within their means, and she indicates
that she is currently meeting her financial responsibilities.  Applicant has failed to establish error
on the part of the Judge.
The Board has said that the mere filing of a bankruptcy petition and the successful receipt
of a discharge, standing alone, does not satisfy the good-faith requirement of AG ¶ 20(d).1  See, e.g.,
ISCR Case No. 03-13768 at 4 (App. Bd. Jun. 16, 2005).  Applicant does point out that she attempted
to resolve her debts by other means prior to resorting to the bankruptcy action.  The Judge’s decision
does not specifically discuss whether these efforts, in conjunction with the bankruptcy action,
establish a good-faith effort to retire the debts.  However, the Board does not review a Judge’s
decision against a standard of perfection.  See, e.g., ISCR Case No. 00-0311 at 2 (App. Bd. Mar. 8,
2001).  The Judge did offer an analysis of Applicant’s pursuit of credit solutions through a
commercial company and her borrowing money from her 401(k) account and explained why, in her
view, these actions did little, if anything, to meaningfully reduce Applicant’s overall debt.  After a
review of the entire record, the Board concludes that the Judge was not required to conclude, as a
matter of law, that Applicant engaged in good-faith efforts to retire or reduce her debts.  Moreover,
the Board concludes that the Judge’s decision is adequately supported by her conclusion that, despite
some evidence in mitigation related to medical conditions, Applicant’s claims of mitigation are
undercut by: (1) the fact that Applicant has worked steadily since 2000 with one brief exception, and
her mother shares in the household expenses, (2) the notion that it is unlikely that one financially
difficult period in 2006 would have negatively affected Applicant’s finances until 2011, and (3) the
fact that Applicant’s bankruptcy discharge was so recent as to preclude a meaningful period of
evaluation of her post-bankruptcy finances.  The Board concludes that the Judge appropriately
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weighed the mitigating evidence offered by Applicant against the seriousness of the disqualifying
conduct and circumstances. 
Applicant expresses her distress over a perception that she might betray the trust of her
obligation to her country.  The Judge’s decision does not contemplate or suggest such behavior on
the part of Applicant.  Furthermore, the decision is issued pursuant to Executive Order 10865, which
states in Section 7, “Any determination under this order adverse to an applicant shall be a
determination in terms of the national interest and shall in no sense be a determination as to the
loyalty of the applicant concerned.” 
The Board does not review a case de novo.  The favorable evidence cited by Applicant is not
sufficient to demonstrate the Judge’s decision is arbitrary, capricious, or contrary to law.  See, e.g.,
ISCR Case No. 06-11172 at 3 (App. Bd. Sep. 4, 2007).  After reviewing the record, the Board
concludes that the Judge examined the relevant data and articulated a satisfactory explanation for
his decision, “including a ‘rational connection between the facts found and the choice made.’” Motor
Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)
(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).  “The general
standard is that a clearance may be granted only when ‘clearly consistent with the interests of the
national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).  Therefore, the
Judge’s ultimate unfavorable security clearance decision is sustainable.
Order
The decision of the Judge denying Applicant a security clearance is AFFIRMED.
Signed: Michael Y. Ra’anan          
Michael Y. Ra’anan
Administrative Judge
Chairperson, Appeal Board
Signed: Jeffrey D. Billett              
Jeffrey D. Billett
Administrative Judge
Member, Appeal Board
Signed: James E. Moody             
James E. Moody
Administrative Judge
Member, Appeal Board