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            DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
 
 
 
 
In the matter of: ) 
) 
 REDACTED )   ISCR Case No. 14-04320 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Eric H. Borgstrom, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
______________ 
 
Decision 
______________ 
 
 
MATCHINSKI, Elizabeth M., Administrative Judge: 
 
While out of work following an injury in February 2011, Applicant became seriously 
delinquent on some consumer credit accounts, including his home loan. He obtained a 
modification of his mortgage loan in October 2015 on his third application. Applicant has 
not addressed approximately $8,127 in delinquent debt balances, including a recent loan 
default for $2,306, but he is not taking on new debt that could further compromise his 
finances. Clearance is granted. 
 
Statement of the Case 
 
 On May 18, 2015, the Department of Defense Consolidated Adjudications Facility 
(DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the security 
concerns under Guideline F, Financial Considerations, and explaining why it was unable to 
find it clearly consistent with the national interest to grant or continue security clearance 
eligibility for him. The DOD CAF took the action under Executive Order 10865, 
Safeguarding Classified Information within Industry (February 20, 1960), as amended; 
Department of Defense (DOD) Directive 5220.6, Defense Industrial Personnel Security 
 
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Clearance Review Program (January 2, 1992), as amended (Directive); and the 
adjudicative guidelines (AG) effective within the DOD on September 1, 2006. 
 
On June 17, 2015, Applicant answered the SOR allegations and requested a 
hearing before an administrative judge from the Defense Office of Hearings and Appeals 
(DOHA). On October 22, 2015, the case was assigned to me to conduct a hearing to 
determine whether it is clearly consistent with the national interest to grant or continue a 
security clearance for him. On November 3, 2015, I scheduled a hearing for December 1, 
2015. 
 
I convened the hearing as scheduled. Seven Government exhibits (GEs 1-7) and 
two Applicant exhibits (AEs A-B) were admitted into evidence without objection. Applicant 
testified on his behalf, as reflected in a transcript (Tr.) received on December 9, 2015. 
 
I held the record open until January 4, 2016, for post-hearing submissions from 
Applicant. On December 31, 2015, Applicant timely submitted nine documents (AEs C-K). 
On January 7, 2016, Department Counsel indicated that the Government had no objections 
to the admission of AEs C-K, so the exhibits were received in evidence. 
 
Summary of SOR Allegations 
 
 The SOR alleges under Guideline F that, as of May 18, 2015, Applicant’s mortgage 
loan was $32,299 past due and in foreclosure (SOR 1.a). Additionally, he owed collection 
balances totaling $4,208 (SOR ¶¶ 1.b, 1.d, 1.h-1.j), charged-off balances totaling $8,213 
(SOR ¶¶ 1.c, 1.e-1.f, 1.k), and a $2,391 judgment debt (SOR ¶ 1.g). When he answered 
the SOR, Applicant denied the mortgage delinquency and explained that in July 2014, he 
had been approved for a mortgage modification that would be finalized in July 2015. 
Applicant indicated that SOR ¶¶ 1.b, 1.c, 1.f, and 1.g alleged the same debt, which was 
currently held by the creditor in SOR ¶ 1.g. Applicant admitted the debts in SOR ¶¶ 1.d-1.e 
and 1.g-1.k, and added that he was working out a payoff of the debt in SOR ¶ 1.k. 
 
Findings of Fact 
 
 After considering the pleadings, exhibits, and transcript, I find that SOR ¶¶ 1.b, 1.f, 
and 1.g are the same debt, and SOR ¶¶ 1.c and 1.k are the same debt. Additional findings 
of fact follow. 
 
Applicant is a 33-year-old high school graduate with some community college 
credits. He has never married, but he and his fiancée have been in an on-and-off 
cohabitant relationship since July 2001. Applicant has an eight-year-old daughter who lives 
with them. Applicant has worked for a defense contractor since February 2003 and has 
held a secret security clearance since April 2003. (GEs 1, 2; Tr. 21-25.) 
 
Applicant took on a sizeable amount of debt between February 2006 and January 
2009. In February 2006, Applicant bought a three-bedroom ranch-style home with a 
conventional 30-year mortgage loan of $148,824. Monthly loan payments were 
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approximately $1,346. (GE 5; AEs C, I.) In August 2006, he bought a vehicle through a 
loan of $27,825. Already paying $449 per month for that vehicle (GE 4), Applicant 
purchased a 2002 model-year high performance vehicle in June 2007. He obtained a 
$20,522 loan from a credit union, to be repaid at $312 per month for 84 months (not 
alleged in the SOR).
1
 In May 2008, Applicant paid for a motorcycle with a $14,638 loan, to 
be repaid at $221 per month for 99 months (SOR ¶¶ 1.c and 1.k, same debt). (GEs 5, 6.) 
In January 2009, Applicant purchased a dog from a pet shop for approximately $2,900. (Tr. 
58-60.) He relied at least in part on credit. His May 2013 credit report shows a high credit of 
$2,230 on the account (SOR ¶¶ 1.b, 1.f, and 1.g same debt).
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 (GEs 5, 6.) Applicant 
intended to breed the dog. When he learned that the dog was not suitable for breeding, he 
tried to return the animal. The seller refused to credit his account, so Applicant decided not 
to pay the debt. Around December 2009, his account was closed and referred for collection 
with a balance of $2,391. (GEs 5, 6.) 
 
Around 2009, Applicant allowed a friend to borrow the vehicle that he bought in June 
2007 with the credit union loan. Applicant had just put a new transmission in the vehicle at 
a cost of $5,000. (Tr. 98.) The friend took over the car payments while Applicant kept the 
car insurance and registration in his name. Applicant made timely payments at $449 per 
month on his other car loan opened in August 2006, and he paid it off in December 2010. 
In November 2010, Applicant opened a new car loan for $22,054, to be repaid at $372 per 
month. (GEs 3-5.) Also, around 2010, Applicant had to replace his washer and dryer and 
some drywall at a total cost of almost $3,000 after his basement flooded. (Tr. 95.) 
 
Applicant was injured at work in late February 2011.
3
 He was placed on light duty for 
three or four weeks and then on leave for lack of work. His attorney advised him to press 
for worker’s compensation rather than short-term disability, and he filed a claim around late 
March 2011. Applicant had no income, and his fiancée was in cosmetology school at the 
time. Applicant made some partial payments on his mortgage, and fell behind 30 to 60 
days on his loan. (GE 5; Tr. 35-36.) While he apparently returned to work around January 
2012 (Tr. 34-35), he struggled to catch up on his mortgage (SOR ¶ 1.a). Applicant’s friend 
                                                 
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Applicant testified that he purchased the vehicle for $11,000 or $12,000. (Tr. 114.) However, the credit 
reports in the record reflect a much larger loan. 
 
2 
Applicant testified that he had only one account with the creditor, which was opened to purchase the dog. (Tr. 
74.) As of May 2013 (GE 5), Applicant’s credit report listed the account under the original lender with a past-
due high credit balance of $2,391 that was sold in December 2009 and as a collection account with a balance 
of $2,855 as of May 2013. His credit report of April 2014 (GE 4) lists the account twice, as a zero balance with 
the original lender and as a collection balance of $2,956 with the assignee in SOR ¶ 1.g. As of February 2015 
(GE 3) and September 2015 (GE 7), Equifax was reporting the debt as a zero balance with the original creditor 
and as a $2,503 judgment held by the collection agency in SOR ¶ 1.g. Based on the account numbers and 
balance information, it appears that the account was opened with the creditor in SOR ¶ 1.f and charged off for 
$2,391 before being sold for collection to the creditor in SOR 1.b, who then obtained a judgment of $2,503, as 
shown in SOR 1.g. 
 
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Applicant told an OPM investigator in May 2013 that he injured himself at work in 2010. (GE 6.) At his 
hearing, he insisted that his injury occurred in early 2011; that he had surgery about six months later for his 
injury; and that he returned to work in January 2012. (Tr. 28-35.) The attorney who represented him in the 
worker’s compensation action indicates that Applicant was injured on February 28, 2011. (AE E.) 
 
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stopped making the payments on the car he borrowed, and Applicant demanded that he 
return the car if he was not going to pay for it. The car was in poor condition and not 
drivable. (GE 6; Tr. 111.) In October 2012, Applicant voluntarily surrendered the car 
because he could not afford the payments. (GE 5.) He tried unsuccessfully to sell the 
motorcycle (SOR ¶¶ 1.c and 1.k, same debt) before giving it to a friend, who took over the 
payments for him. That friend made no payments on the loan after December 2012. (GE 7; 
Tr. 69.)  
 
On March 4, 2013, Applicant prevailed in his worker’s compensation claim. (AE E.) 
Retroactive payments were in installments and not in a lump sum. (Tr. 28-33.) On April 30, 
2013, Applicant completed and certified to the accuracy of a Questionnaire for National 
Security Processing (SF 86) to renew his security clearance eligibility.  In response to the 
financial record inquiries, Applicant indicated that he was seeking a modification of his 
home loan. Applicant also indicated that he was arranging repayment of $1,608 owed on 
his motorcycle loan and $3,600 owed on his car loan. (GE 1.) 
 
A check of Applicant’s credit on May 11, 2013, showed that Applicant was $6,528 
past due on his mortgage loan (SOR ¶ 1.a) as of March 2013, on which he was obligated 
to pay $1,346 per month. (GE 5, Tr. 51.) His motorcycle loan (SOR ¶¶ 1.c and 1.k, same 
debt) had been charged off in December 2012 with a balance due on the loan of $9,583. 
Applicant reportedly owed a deficiency balance of $6,392 for the car surrendered in 
October 2012. The account opened for the dog was in collection with a balance of $2,855 
(SOR ¶¶ 1.b, 1.f, 1.g same debt).  A wireless phone provider reported a $658 outstanding 
collection balance from July 2010 (SOR ¶ 1.d). Three medical debts were in collection for 
$430 (SOR ¶ 1.h), $89 (SOR ¶ 1.i), and $48 (SOR ¶ 1.j). Applicant was $916 past due on 
the car loan obtained in November 2010. (GE 5.) 
 
On May 22, 2013, Applicant was interviewed by an authorized investigator for the 
Office of Personnel Management (OPM). Applicant volunteered that he had made no 
payments toward the debt for the dog because he felt “cheated” in the transaction. As for 
his delinquent motorcycle and car loans, Applicant explained that he had surrendered the 
motorcycle in a voluntary repossession in January 2013 and that he owed about $1,608 
after the motorcycle was sold at auction. Similarly, he had the car voluntarily repossessed 
and owed a deficiency balance of $3,600 on the car loan. He indicated that he was making 
arrangements to pay off that debt. Applicant denied any other delinquencies. When 
confronted about a $916 delinquency for his newer car loan, Applicant admitted that his 
loan for his current vehicle was past due, but he explained that he had already arranged to 
make the payment to bring his loan current. As for the wireless phone debt (SOR ¶ 1.d), 
Applicant explained that the $685 were fees for cancelling his service, but he paid the debt 
in 2011. Applicant expressed his belief that the $430 medical debt in collection (SOR ¶ 1.h) 
was from surgery for his work injury and should be covered by worker’s compensation. He 
described his current financial situation as living from paycheck to paycheck, although he is 
able to meet his financial obligations. (GE 6.) 
 
In June 2013, a $3,742 judgment against Applicant was issued for the deficiency 
balance of the car loan obtained in 2007. Applicant had the payments for the judgment 
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voluntarily garnished from his pay, and the judgment was satisfied in April 2014. (GE 7; Tr. 
46-48, 113.) In June 2013, the collection agency holding the delinquent debt in SOR ¶ 1.b 
(same debt in SOR ¶ 1.f) obtained a $2,503 default judgment (SOR ¶ 1.g) against him. 
(GEs 3, 7; Tr. 75.)  
 
Applicant unsuccessfully tried to modify his mortgage during the summer of 2013. 
(Tr. 37-39.) Around December 2013, Applicant listed his home for a short sale with a 
realtor.
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 (AE I; Tr. 36.)  Applicant accepted an offer for the home in February 2014, which 
was sent to his mortgage lender for review. The lender was legally required to offer him a 
loan modification before accepting the short sale. (AE I; Tr. 40.) Around May 2014, the 
lender approved him for a trial loan modification. Applicant made three payments, and in 
September 2014, he received the paperwork to finalize the modification. (AE C.) He 
submitted the notarized agreement with a payment to the lender, but was denied the loan 
in October 2014 because he had not submitted all the paperwork relating to the 
modification. (Tr. 41-43, 49.) Applicant was approved for a new loan modification trial 
program in March 2015, requiring him to make three payments of $1,136.38 starting May 1, 
2015. (AE A.) Applicant made the payments, and on October 1, 2015, his loan modification 
was approved. Just prior to the modification, his loan was $33,811 past due. (GE 7.) Under 
his modified 30-year mortgage, Applicant’s monthly payment is $1,078.89. The interest rate 
on the new loan is a fixed 4%. (AE B; Tr. 50-51.) 
 
In July 2014, a satellite television service provider placed a $679 debt for collection. 
 The debt was apparently for equipment that he did not return. Applicant wanted to 
reestablish service with the provider, so he paid the debt on September 28, 2014. (GEs 3, 
7; Tr. 65-66.) Around January 2014, a credit card lender charged off a $387 balance (SOR 
¶ 1.e). Applicant had opened the account in April 2014 and started falling behind in July 
2013. The wireless phone debt of $685 (SOR ¶ 1.d) was still listed on his credit record as 
an outstanding delinquency. (GE 3.) 
 
Applicant had intended to satisfy some of his debts with his income tax refund in 
2014. The judgment creditor in SOR ¶ 1.g agreed to settle the debt for half of the balance, 
but he had an income tax liability from 2009 or 2010. He had taken two loans, of $2,400 
and $6,600, from his 401(k) around 2008 for home improvements and then defaulted on 
the loans in 2011, when he was out of work because of his injury. (Tr. 106.) The IRS taxed 
them as premature disbursements. His federal income tax refund of $6,700 for 2013 was 
intercepted in 2014 to satisfy his tax liability. (Tr. 61-62, 86-87, 106.) However, Applicant is 
ineligible to borrow from his 401(k) until he repays one of the loans. (Tr. 86-89.) 
 
In April 2015, Applicant’s credit card opened in April 2013 was placed for collection 
for $387 (SOR ¶ 1.e). In June 2015, a utility provider placed a $127 debt for collection (not 
alleged in SOR). (GE 7.) Applicant testified credibly that he paid the debt around in October 
                                                 
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Applicant testified about his mortgage that he contacted a realtor in late 2012 and listed his home for a short 
sale. (Tr. 36.) Credit records show that his mortgage first became delinquent in September 2011 and that it 
was 90 days past due as of October 2012. (GE 3.) Realtor records show that he listed his property for sale in 
December 2013. (AE I.) 
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2015. (Tr. 66-67.) On October 16, 2015, Applicant paid $1,078.89 toward his new 
mortgage. (AE K; Tr. 52, 57.) 
 
Applicant was hospitalized unexpectedly for six days in October 2015. He had leave 
to cover his missed time but he incurred some medical costs not covered by insurance. (Tr. 
99.) He did not elaborate about his medical expenses.  
 
As of December 2015, Applicant had made no payments toward the judgment in 
SOR ¶ 1.g (same debt in SOR ¶¶ 1.b, 1.f), the $387 credit-card collection debt (SOR ¶ 
1.e), the $2,298 charged-off balance for the motorcycle loan (SOR ¶¶ 1.c, 1.k same debt), 
or the $685 wireless phone debt (SOR ¶ 1.d). (GE 7; Tr. 68, 70.) Applicant’s car loan 
obtained in November 2010 had been charged off in March 2015 for $6,431. He reportedly 
owed a $2,306 balance on that debt as of August 2015. (GE 7.) Applicant expressed intent 
to resolve the judgment, the credit card debt, and the motorcycle loan balance with his 
income tax refund for tax year 2015, which he anticipated around February 2016. (Tr. 69-
70.) Concerning the wireless phone debt on his credit record (SOR ¶ 1.d), he asserted that 
his only service with that provider was through his parents on an account not in his name. 
(Tr. 71.) About the medical debts in the SOR, Applicant was able to determine that the 
$403 debt in SOR ¶ 1.h was incurred by him at a walk-in clinic. Applicant was not certain of 
the balance as of December 2015 since he had paid the clinic $180 recently. Applicant had 
no knowledge of the $89 medical debt in SOR ¶ 1.i. (Tr. 78.) 
 
Applicant’s fiancée works as a hairstylist and her income is inconsistent. (Tr. 62-63.) 
In February 2015, Applicant transferred to his current position for its stable work hours. 
Although overtime is unavailable to him in his current position, it is easier for him to budget 
for expenses when he has a set income each week. (Tr. 62-64.) At his hearing, Applicant 
testified that his monthly discretionary income varies, depending on his fiancée’s earnings. 
He is paid weekly, and one paycheck goes directly to the mortgage. His second paycheck 
goes toward his fiancée’s car loan, their car insurance, and 60-70% of their utility costs. 
The rest of his monthly pay goes toward food, gasoline, and other expenses. (Tr. 64-65.) 
After his hearing, he presented a monthly budget showing that monthly recurrent bills and 
food total approximately $2,914 on income of $3,600. Approximately $686 of his monthly 
discretionary income goes toward household supplies. (AE J.) Applicant pays $35 every 
other week for his daughter’s horseback riding activities. (Tr. 108.) Applicant had sent his 
daughter to parochial school for preschool and kindergarten. However, she now attends 
public school. (Tr. 108-109.) 
 
Character references 
 
 Applicant’s neighbor attests to Applicant’s dedication to his daughter. She considers 
Applicant to be “a very good person trying to get ahead in life for himself and his family.” 
(AE D.) A supervisor at work, who became acquainted with Applicant when they attended 
trade school together some 14 years ago, worked with Applicant before Applicant’s transfer 
to his current position. In this supervisor’s experience, Applicant needed no direction when 
tasked with a job, and he was an excellent worker. (AE F.) Applicant’s current co-workers 
believe him to be a good family man and worker. (AEs G, H.) 
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Policies 
 
The U.S. Supreme Court has recognized the substantial discretion the Executive 
Branch has in regulating access to information pertaining to national security,  emphasizing 
that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 
U.S. 518, 528 (1988). When evaluating an applicant’s suitability for a security clearance, 
the administrative judge must consider the adjudicative guidelines. In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which are required to be considered in 
evaluating an applicant’s eligibility for access to classified information. These guidelines 
are not inflexible rules of law. Instead, recognizing the complexities of human behavior, 
these guidelines are applied in conjunction with the factors listed in the adjudicative 
process. The administrative judge’s overall adjudicative goal is a fair, impartial, and 
commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious 
scrutiny of a number of variables known as the “whole-person concept.” The administrative 
judge must consider all available, reliable information about the person, past and present, 
favorable and unfavorable, in making a decision. 
 
The protection of the national security is the paramount consideration. AG ¶ 2(b) 
requires that “[a]ny doubt concerning personnel being considered for access to classified 
information will be resolved in favor of national security.” In reaching this decision, I have 
drawn only those conclusions that are reasonable, logical, and based on the evidence 
contained in the record. Under Directive ¶ E3.1.14, the Government must present evidence 
to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant 
is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or 
mitigate facts admitted by applicant or proven by Department Counsel. . . .” The applicant 
has the ultimate burden of persuasion to obtain a favorable security decision. 
 
A person who seeks access to classified information enters into a fiduciary 
relationship with the Government predicated upon trust and confidence. This relationship 
transcends normal duty hours and endures throughout off-duty hours. The Government 
reposes a high degree of trust and confidence in individuals to whom it grants access to 
classified information. Decisions include, by necessity, consideration of the possible risk 
that the applicant may deliberately or inadvertently fail to safeguard classified information. 
Such decisions entail a certain degree of legally permissible extrapolation about potential, 
rather than actual, risk of compromise of classified information. Section 7 of Executive 
Order 10865 provides that decisions shall be “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.” See also EO 
12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive 
information). 
 
Analysis 
 
Guideline F, Financial Considerations 
 
The security concerns about financial considerations are set forth in AG ¶ 18: 
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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. 
 
 Applicant took on a substantial amount of debt between February 2006 and 
November 2010. In addition to a $148,824 mortgage loan (SOR ¶ 1.a), he financed the 
purchases of a 2002 model-year high performance car through a $20,522 loan (not alleged 
in the SOR) and a new motorcycle through a $14,638 loan (SOR ¶¶ 1.c and 1.k, same 
debt). He bought a dog on credit, charging $2,230 to an account opened in January 2009 
(SOR ¶¶ 1.b, 1.f, and 1.g, same debt). In November 2010, he obtained another auto loan 
of $22,054 (not alleged in the SOR). Monthly payments on these five accounts totaled 
$2,331. Applicant chose not to pay the $80 scheduled monthly payment for the dog after 
learning that the animal was not a purebred. Without employment income following his on-
the-job injury in February 2011, he loaned his used car and gave the motorcycle to friends 
who promised to make the loan payments. After his friends defaulted, he retook 
possession of both vehicles but then could not make the payments. The motorcycle loan 
was charged off for $2,298. The loan for the used car and the charge account for the dog 
went to judgment for $3,742 and $2,503, respectively. He made some partial payments on 
his mortgage for a time, but his loan was past due $33,811 as of July 2015. A debt of $685 
for wireless phone service (SOR ¶ 1.d) and three medical debts totaling $567 (SOR ¶¶ 1.h-
1.j) were placed for collection. A credit card debt of $387 (SOR ¶ 1.e) was charged off in 
January 2014 because of nonpayment since July 2013.  Before the SOR was issued, 
Applicant satisfied the judgment for the used car and paid a $679 satellite television debt in 
collection. Neither of the debts was alleged in the SOR.
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 They cannot provide a separate 
basis for disqualification, but they are relevant to assessing Applicant’s financial judgment 
generally and his efforts in mitigation. Two disqualifying conditions AG ¶ 19(a), “inability or 
unwillingness to satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial 
obligations,” are clearly established. 
 
 Applicant’s purchases of a motorcycle through a $14,638 loan and of a dog on credit 
for $2,230 suggest irresponsible spending under AG ¶ 19(b), which provides: 
 
(b) indebtedness caused by frivolous or irresponsible spending and the 
absence of any evidence of willingness or intent to repay the debt or 
establish a realistic plan to pay the debt. 
 
                                                 
5 
The DOHA Appeal Board has long held that the administrative judge may consider non-alleged conduct to 
assess an applicant’s credibility; to evaluate an applicant’s evidence of extenuation, mitigation, or changed 
circumstances; to consider whether an applicant has demonstrated successful rehabilitation; to decide 
whether a particular provision of the Adjudicative Guidelines is applicable; or to provide evidence for a whole 
person analysis under Section 6.3 of the Directive. See, e.g., ISCR Case No. 03-20327 (App. Bd. Oct. 26, 
2006); ISCR Case No. 09-07219 (App. Bd. Sep. 27, 2012). 
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Even so, Applicant initially intended to repay both debts. He or later a friend made 
payments on the motorcycle through December 2012. His credit record shows that his 
account opened for the dog was opened in January 2009 and was paid through October 
2009. AG ¶ 19(b) is not fully established in this case. 
 
 In evaluating Applicant’s financial record, mitigating condition AG ¶ 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,” applies only in that some of the debts are old. The 
medical debt in SOR ¶ 1.i is from 2008. The other medical debts are from 2010. Applicant 
defaulted on the debt for the dog in 2009 and on the motorcycle loan in 2012. The wireless 
phone debt in SOR ¶ 1.d is from 2010. However, other debts are more recent. Applicant 
began falling behind in his mortgage in September 2011. By October 2014, the loan 
servicer had reportedly initiated foreclosure because his loan was $32,299 past due. His 
application for a loan modification was denied for missing paperwork. The credit card debt 
in SOR ¶ 1.e was charged off in 2014 for nonpayment since July 2013. In addition, 
Applicant’s September 2015 credit report (GE 7) shows that he had been chronically late in 
his payments on the automobile loan opened in November 2010; that the loan first became 
delinquent in May 2014, and that a $6,431 balance was charged off in 2015. As of August 
2015, the reported balance was $2,306 with a last payment in May 2015. Given the 
evidence of recent delinquency, AG ¶ 20(a) does not fully apply. 
 
 AG ¶ 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,” is implicated in that Applicant’s financial struggles largely began 
after he was injured at work in late February 2011. Applicant was assigned light duties for 
three or four weeks before being placed on unpaid leave until January 2012. He eventually 
prevailed in his worker’s compensation claim in March 2013, but retroactive benefits were 
paid piecemeal. The injury was unforeseen, and the lack of income while appealing the 
denial of worker’s compensation seriously compromised his finances to where he could not 
make timely payments on his credit obligations, including his mortgage. Sometime in the 
last five years, he incurred costs to replace his washer and dryer and some drywall after his 
basement flooded. He understandably gave priority to his mortgage once his financial 
situation improved, first by attempting a loan modification and then listing his property for a 
short sale. AG ¶ 20(b) does not explain the credit card delinquency in SOR ¶ 1.e or his 
failure to address the medical debts of only $89 and $48 (SOR ¶¶ 1.i and 1.j) when he was 
working full time and making no payments or only trial payments on his mortgage, 
especially after April 2014, when his wages were no longer being garnished to pay the 
$3,742 judgment for the used car bought in June 2007. 
 
 Applicant is credited with rehabilitating his home loan. Applicant began working on a 
loan modification in 2012. Although he was denied, he was offered another opportunity 
after he presented his lender with a short sale offer. He made trial payments in the summer 
of 2014 only to be denied a loan modification for not returning the entire packet. He applied 
for a third time and made the required trial payments from May 2015 through July 2015, 
10 
 
before being approved in October 2015. AG ¶ 20(c), “the person has received counseling 
for the problem and/or there are clear indications that the problem is being resolved or is 
under control,” and AG ¶ 20(d), “the individual initiated a good-faith effort to repay overdue 
creditors or otherwise resolve debts,” apply in mitigation of his mortgage delinquency (SOR 
¶ 1.a). Applicant made the first payment under the modified mortgage (AE K), and with his 
record of trial payments, he has demonstrated that he can be counted on to make the 
payments required to keep his home. Applicant’s satisfaction of two debts not alleged in 
the SOR, the $3,742 judgment and the $679 satellite television debt, implicate AG ¶ 20(c) 
primarily. Debts paid after judgment or collection are not considered good-faith efforts to 
resolve debts as had Applicant contacted the creditors and arranged for repayment.  
Neither AG ¶ 20(c) nor AG ¶ 20(d) applies to the judgment debt for the dog (SOR ¶ 1.g, 
SOR ¶¶ 1.b and 1.f same debt), the motorcycle loan balance (SOR ¶¶ 1.c and 1.k same 
debt), the charged-off credit card balance (SOR ¶ 1.e), or the wireless phone debt (SOR ¶ 
1.d). Applicant had not made any payments on these debts as of December 2015. 
Concerning the medical debts, Applicant testified that the medical debts in SOR 1.h and 
possibly 1.j are from a clinic where he was treated and that during a recent visit, he made a 
payment toward his outstanding balances. To the extent that AG ¶ 20(d) applies because 
of this payment, his medical debt is not fully satisfied. 
 
 Applicant is now contesting the validity of the wireless phone debt in SOR ¶ 1.d on 
the basis that he never had service with that provider in his own name. However, when he 
was interviewed by an OPM investigator in May 2013, Applicant discrepantly indicated that 
the debt was for cancellation fees that he believed he paid in 2011. The debt is still listed 
as in collection on his credit record as of September 2015. In ISCR Case No. 08-12184 at 
7 (App. Bd. Jan. 7, 2010), the DOHA Appeal Board explained: 
 
It is well-settled that adverse information from a credit report can normally 
meet the substantial evidence standard and the government’s obligations 
under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden 
shifts to applicant to establish either that [he or] she is not responsible for the 
debt or that matters in mitigation apply. 
 
 The wireless phone provider has not updated the information on the account since 
January 2011, but Applicant did not present any documentation showing that the debt was 
being reported in his name in error or that it has been paid. He did not satisfy AG ¶ 20(e), 
which provides as follows: 
 
(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 of provides evidence of actions 
to resolve the issue. 
 
 Applicant has not opened any new credit accounts since April 2013, when he 
obtained the credit card in SOR ¶ 1.e. It was the only account opened since the auto loan 
in November 2010 that was charged off in 2015 for $6,431. Available credit information 
reflects a date of last payment on the auto loan in May 2015 and an outstanding balance of 
11 
 
$2,306 as of August 2015, which could be a deficiency balance on the loan. Applicant 
provided no explanation for his failure to make timely payments. He listed a car payment of 
$250 on his recent budget, which may well be for his fiancée’s car, given that the monthly 
scheduled payment on the November 2010 car loan was $372. Applicant has yet to make 
any payments on the $2,503 judgment, the $387 charged-off credit card, the $685 wireless 
phone debt, or the $2,298 sought by the motorcycle financier. With the $2,306 past-due 
balance on the November 2010 auto loan, he owes approximately $8,179 in delinquent 
balances plus some outstanding medical debt that is not mitigated under AG ¶ 20(c) or AG 
¶ 20(d). 
 
Whole-Person Concept 
 
Under the whole-person concept, the administrative judge must consider the totality 
of an applicant’s conduct and all relevant circumstances in light of the nine adjudicative 
process factors in AG ¶ 2(a).
6
 The analysis under Guideline F is incorporated in my whole-
person analysis. Some of the factors in AG ¶ 2(a) were addressed under those guidelines, 
but some warrant additional comment. 
 
 Applicant is a good worker whose finances were severely compromised by the lack 
of income for about ten months following an injury at work in late February 2011. After 
returning to work full time around January 2012, Applicant focused on trying to save or sell 
his home to address his sizeable mortgage delinquency. His recent default of his car loan 
suggests that his finances are more tenuous than his budget showing about $500 in net 
monthly discretionary income would suggest. 
 
Applicant’s post-hearing submissions show that he made the first payment under his 
modified mortgage. He has yet to make any payments on the other consumer credit debts 
in the SOR, but he satisfied three unalleged debts: the judgment debt for the repossessed 
used car; a $127 electric utility debt in collection, which he overlooked when he was on 
temporary duty for work; and a $679 satellite television debt in collection. The DOHA 
Appeal Board has held that an applicant is not required to establish that he has paid off 
each debt in the SOR, or even that the first debts paid be those in the SOR. However, an 
applicant needs to show that he has a plan to resolve his debts and that he has taken 
significant steps to implement his plan. See ISCR 07-06482 (App. Bd. May 21, 2008). 
Applicant’s plan to use his income tax refund for tax year 2015 to pay his delinquencies is 
reasonable, but promises to pay debts are not a substitute for a track record of timely 
payments. See ISCR Case No. 07-13041 at 4 (App. Bd. Sept. 19, 2008) (citing ISCR Case 
                                                 
6 
The factors under AG ¶ 2(a) are as follows: 
 
(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 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. 
 
12 
 
No. 99-0012 at 3 (App. Bd. Dec. 1, 1999)). Applicant’s disregard of a financial judgment is 
not condoned. He certainly would have a stronger case in mitigation had he been able to 
show a track record of efforts to address his non-mortgage debts. Nevertheless, Applicant 
is seen as not likely to engage in criminal activity to resolve his remaining past-due 
balances. With his mortgage issue resolved under terms acceptable to his mortgage 
servicer, he owes less than $10,000 in delinquent debt. His debt burden is no longer so 
excessive to where it could not be resolved in the near future. He is not incurring any new 
debt that could further compromise his finances.  
 
It is well settled that once a concern arises regarding an applicant’s security 
clearance eligibility, there is a strong presumption against the grant or renewal of a security 
clearance. See Dorfmont v. Brown, 913 F.2d 1399, 1401 (9
th 
Cir. 1990). At the same time, 
a determination of an applicant’s eligibility for a security clearance should not be made as 
punishment for specific past conduct, but on a reasonable and careful evaluation of the 
evidence to determine if a nexus exists between established facts and a legitimate security 
concern. Applicant acknowledged his poor judgment in his handling of the debt for the dog 
and understands that he is legally liable for the judgment debt. He understands that his 
security clearance and employment could be jeopardized should he neglect his financial 
obligations going forward. The Government can re-validate Applicant’s financial status at 
any time through credit reports, investigation, or interrogatories. Approval of classified 
access to Applicant now would not bar the Government from revoking it, if required.
7
 After 
considering all the facts and circumstances, I find it is clearly consistent with the national 
interest to continue Applicant’s security clearance eligibility. 
 
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:   FOR APPLICANT 
 
Subparagraphs 1.a-1.k:   For Applicant 
 
Conclusion 
 
In light of all of the circumstances presented by the record in this case, it is clearly 
consistent with the national interest to grant Applicant eligibility for a security clearance. 
Eligibility for access to classified information is granted. 
 
_____________________ 
Elizabeth M. Matchinski 
Administrative Judge 
                                                 
7 
The DOHA Appeal Board has held that the Government has the right to reconsider the security significance 
of past conduct or circumstance in light of more recent conduct that has negative security significance. See 
ISCR Case No. 10-96943 at 4 (App. Bd. Feb. 17, 2012.)