1 
      DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of:  ) 
 ) 
REDACTED  ) ISCR Case No. 17-04354 
 ) 
Applicant for Security Clearance  ) 
Appearances 
For Government: Rhett E. Petcher, Esq., Department Counsel 
For Applicant: Pro se 
______________ 
Decision 
______________ 
MATCHINSKI, Elizabeth M., Administrative Judge: 
Applicant has made no progress toward resolving a home-equity credit line that was 
charged off for $37,193 in February 2015 or on a line of credit that was charged off for 
$4,482 in October 2014. As of May 2018, he had made some payments toward a collection 
debt, but more progress is needed in addressing his delinquencies. Clearance is denied. 
Statement of the Case 
On January 9, 2018, the Department of Defense Consolidated Adjudications Facility 
(DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing security concerns 
under Guideline F, financial considerations. The SOR explained why the DOD CAF 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 (EO) 
10865, Safeguarding Classified Information within Industry (February 20, 1960), as 
amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review 
Program (January 2, 1992), as amended (Directive); and the National Security Adjudicative 
Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to 
Hold a Sensitive Position (AG) effective within the DOD on June 8, 2017. 
09/28/2018
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Applicant responded to the SOR on January 29, 2018, and requested a hearing 
before an administrative judge from the Defense Office of Hearings and Appeals (DOHA). 
On April 18, 2018, 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 
Applicant. On April 24, 2018, I scheduled a hearing for May 18, 2018. With the agreement 
of the parties, I changed the start time of the hearing and issued an Amended Notice of 
Hearing on May 10, 2018. 
 
At the hearing, four Government exhibits (GEs 1-4) were admitted. A March 7, 2018 
letter forwarding the proposed GEs to Applicant and a list of the GEs were marked as 
hearing exhibits (HEs I-II) for the record but not admitted in evidence. Applicant testified at 
the hearing, as reflected in a hearing transcript (Tr.) received on June 6, 2018. 
 
I held the record open for one month for evidentiary documents from Applicant. On 
May 25, 2018, Applicant submitted AEs A-F, which were accepted into the record without 
any objection from the Government but with some concern over the weight to be afforded 
extracts of credit reports because they do not fully reflect Applicant’s financial status. 
 
Summary of SOR Allegations and Answer 
 
 The SOR alleges under Guideline F that, as of January 9, 2018, Applicant owed 
charged-off debts of $37, 193 (SOR ¶ 1.a) and $4,482 (SOR ¶ 1.b); a $786 collection debt 
(SOR ¶ 1.c); a $262 wireless telephone debt in collection (SOR ¶ 1.d); and three medical 
collection debts totaling $419 (SOR ¶ 1.g). When Applicant answered the SOR allegations, 
he admitted the debts.1 He indicated that he was currently enrolled in repayment plans for 
the collection debts. Concerning the charged-off debts held by a bank, he explained that he 
and his spouse recalled obtaining a ten-year home-equity loan with a corresponding line of 
credit (SOR ¶ 1.a) but the bank now holding the debt has indicated that the account “had 
turned into a 30 year loan,” which became six months in arrears pending his fraud claim. 
The bank demanded that he pay the arrearage in full or obtain a restructuring of the loan. 
After his application for a loan modification was denied, the bank indicated it would 
proceed with foreclosure to close the account. Advised by a credit counseling service that a 
second mortgage would not cause him to lose his home, Applicant reapplied for a 
modification that was denied. He denied receiving any correspondence about the debt 
since April 2015 but indicated that he would pay off the debt on the sale of his home in 
which he has equity exceeding $120,000. (Answer.) 
 
Findings of Fact 
 
 After considering the pleadings, exhibits, and transcript, I make the following 
findings of fact. 
 
Applicant is 60 years old and a high school graduate. He has worked for his current 
employer, a defense contractor, since March 2008. He has been at his present duty 
                                                 
1 Applicant addressed each of the debts in his answer, but his paragraph designations do not match those of 
the SOR of record. 
3 
 
location since September 2011 and provides program management support. He previously 
worked for another defense contractor from 1983 to February 2008 and has held a 
clearance since September 1983. He was granted sensitive compartmented information 
(SCI) eligibility in 2003. (GEs 1, 2; Tr. 29-30.) He currently holds a secret clearance. (Tr. 
36.) 
 
Applicant and his spouse married in January 1985. They have one child, a son now 
age 33. Applicant has a 35-year-old daughter from a previous relationship while his spouse 
has a 39-year-old daughter from her previous marriage. (GE 1; Tr. 34.) Applicant’s spouse 
worked during their marriage until 2002, when Applicant became legal guardian to his 
grandson, then an infant. (Tr. 34-35.) Applicant’s spouse manages the finances in their 
household. (Tr. 58.) 
 
In September 2004, Applicant purchased a new home for his family. (GEs 1-2.) He 
obtained a 30-year mortgage for $219,900, to be repaid at $1,831 per month. Within a year 
or so, Applicant opened a secured line of credit (SOR ¶ 1.a) to finish the basement.2 (GEs 
3-4; Tr. 22, 50.) Over the course of the next five years, he borrowed approximately 
$32,000. (Tr. 51, 68.) 
 
Applicant and his spouse’s son was wounded while serving in Iraq in September 
2007. He was medically evacuated to a hospital in Europe before returning to his home in 
another state. In February 2008, Applicant and his spouse relocated to their son’s area to 
help him with his recovery. In March 2008, Applicant began working as a contractor for his 
present employer on a U.S. military base at $83,000 a year, about $2,000 less than his 
previous salary. His household expenses increased significantly. He and his spouse rented 
a house at $1,200 a month in their new area while continuing to pay the mortgage on their 
previous residence, which was occupied by Applicant’s daughter and her two children. 
Applicant’s daughter, who was a waitress, contributed “roughly $800” a month, about half 
of the monthly mortgage payment on the home. (Tr. 20-21, 30-32.) Applicant’s spouse 
made the mortgage payments on time through July 2009. Applicant’s loan was past due 30 
days when it was transferred shortly thereafter to a new loan servicer. The new loan 
servicer failed to withdraw the mortgage payment from their bank account, and their loan 
was placed into a government program, which increased the balance of the loan to 
$231,520. (GEs 3-4; Tr. 22.) 
 
In May 2011, Applicant’s daughter vacated Applicant’s house, and Applicant’s 
spouse and grandson returned home in June 2011. (Tr. 32-33.) As of August 2011, 
Applicant and his spouse had an open line of credit for $5,000 (SOR ¶ 1.b) as overdraft 
protection for the home-equity line of credit in SOR ¶ 1.a. Monthly payments on the 
account were $143. (GE 3.) After a job opportunity at the same salary surfaced for his 
employer in his current location, Applicant moved back home in September 2011. (Tr. 32-
33.) 
 
                                                 
2 Applicant testified that he obtained a home-equity line of credit in 2005 with a small community bank, and it 
was later transferred to the bank identified in SOR ¶ 1.a. (Tr. 50.) Available credit reports show an opening 
date of August 2007 with the bank listed in SOR ¶ 1.a. (GEs 3-4.) 
4 
 
In August 2013, Applicant’s spouse was diagnosed with cancer and began incurring 
medical bills that strained their finances. (Tr. 33-34.) While Applicant had health insurance, 
he had a $9,000 deductible to cover any medical copayments. (Tr. 39-40.) Over the next 
two years, Applicant and his spouse paid $11,000 to $12,000 toward her medical 
expenses. He also lost income because he was unable to travel during his spouse’s 
treatments. (Tr. 40.) 
 
After November 2013, Applicant and his spouse stopped paying on the home-equity 
loan in SOR ¶ 1.a. When they were billed for two months of payments (approximately 
$886), Applicant contacted the bank holding the debt and was informed that the loan had 
been converted to a 30-year second mortgage and that he was in default. He had paid on 
the secured line of credit for several years and disputed the terms claimed by the bank. 
Over the next five months, the balance continued to accrue because of nonpayment. 
Applicant assumed he was a victim of predatory lending. Applicant learned that the 
conversion to a 30-year loan was in the terms of his original contract. Not knowing how to 
proceed and unable to pay the full balance of the debt, Applicant contacted the bank. On 
its advice, he applied for a 30-year mortgage to address the delinquent secured line of 
credit, only to be denied. When he indicated that he could not pay the full balance, he was 
told that a lien would be placed against his home. In February 2015, the bank charged off 
the account for $37,193 and placed a lien on his home. (GEs 3-4; Tr. 23, 52-56.) 
 
In March 2014, Applicant and his spouse stopped paying on the line of credit 
obtained in July 2011 (SOR ¶ 1.b) that was held by the same bank as the secured home-
equity loan. In October 2014, the bank charged off a balance of $4,482. (GEs 3-4.) 
 
Applicant missed one payment on his primary mortgage because of a lack of funds. 
He then made regular payments on his mortgage, but his account was chronically 30 days 
past due in 2014 and 2015 because he could not afford to make a double payment. (GEs 
2-4.) 
 
In July 2015, Applicant leased a 2015 model-year truck, taking on an $18,991 debt 
to be repaid at $486 per month. In December 2015, he obtained a $12,795 car loan for a 
2011 model-year small sport utility vehicle for his spouse. Monthly payments on the loan 
are $248. (GEs 3-4; Tr. 59, 65-66.) 
 
On February 24, 2016, Applicant completed and certified to the accuracy of a 
Questionnaire for National Positions (SF 86). In response to financial record inquiries 
concerning any delinquency involving routine accounts, Applicant indicated that he owed 
$35,000 in credit card and second mortgage debt because of medical bills. (GE 1.) 
 
A check of Applicant’s credit on April 12, 2016, showed that, in addition to the 
charged-off balances of $37,193 (SOR ¶ 1.a) and $4,482 (SOR ¶ 1.b) on the lines of 
credit, medical debts of $150 from June 2014 (SOR ¶1.e), $150 from March 2015 (SOR ¶ 
1.f), and $119 from April 2013 (SOR ¶ 1.g) were in collection. Applicant or his spouse was 
making payments on a closed credit card account with a $1,780 balance, on the auto lease 
with a $15,096 balance and loan with a $12,590 balance, and on open credit card accounts 
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with balances of $5,250 and $142. (GE 3.) A more recent credit report of November 27, 
2017, revealed that a $786 consumer credit debt was placed for collection (SOR ¶ 1.c) in 
November 2015. As of April 2017, a cellphone debt of $262 from September 2016 was in 
collection (SOR ¶ 1.d). A credit card opened in November 2003 with Applicant as an 
authorized user was charged off for $1,827 in 2013 (not alleged). (GE 4.) 
 
In May 2017, Applicant had a medical issue that required his hospitalization for a 
month. He was out of work until August 2017, and his short-term disability income was 
60% of his regular income. (Tr. 26-27.) Applicant incurred approximately $10,000 in out-of-
pocket medical expenses in addition to the income loss for being unable to travel for work. 
(Tr. 41.) 
 
 On August 16, 2017, Applicant was interviewed by an authorized investigator for the 
Office of Personnel Management (OPM). He acknowledged that he could owe as much as 
$40,000 on the secured line of credit, which he actively disputed until 2015 on the basis 
that it was a ten-year loan, not the 30-year loan claimed by the bank. He had not received 
any correspondence about the account since 2015 and had not paid anything toward the 
debt. He expressed an intention to make payments on the account if he receives 
information on the account. Applicant volunteered that he missed two payments on a 
MasterCard account that was charged off for approximately $700 and could be in 
collections. He did not know the current status of the account but would pay it if contacted 
by the creditor. When confronted with other adverse credit information on his record, 
Applicant indicated about the medical collection debt on his record that he could have 
overlooked some medical bills from his spouse’s cancer treatments, but he did not recall 
any specifics. When asked about his late payments on his primary mortgage, Applicant 
related that after he missed one payment, he was always one month behind because he 
could not make a double payment. However, he indicated that he brought the loan current 
in 2017. Applicant did not recognize the $1,827 delinquency on his credit record. As for the 
$4,482 charged-off credit line, Applicant explained that it was for overdraft protection of the 
secured line of credit account, and that it was charged off. Applicant related that his current 
financial status was positive, and he did not anticipate any future financial issues. (GE 2.) 
 
 As of September 2017, Applicant was one month behind on his $1,711 monthly 
payment of his primary mortgage. (GE 4.) He fell behind last year because of his loss of 
income, registration costs for both vehicles, and the expense of having to put new tires and 
brakes on his truck. He has been consistently one month behind since then. (Tr. 60.)  A 
credit card account with a current balance of $252 had been delinquent as recently as 
June 2017. Applicant was making timely payments for his and his spouse’s car loan 
balances of $9,455 and $5,843. He was also making timely payments on his credit card 
with a home improvement retailer, which had a balance of $4,339. (GE 4.) 
 
 As of May 2018, Applicant had made no payments on the charged-off line of credit 
(SOR ¶ 1.a) or its overdraft protection account (SOR ¶ 1.b), which were closed with 
reported outstanding balances of $37,193 and $4,482. (AE C.) He testified that he intends 
to repay those debts when he sells his home and that he has no choice in that regard. (Tr. 
23-24, 56.) Applicant testified that he received a 1099 form from the bank in 2017, but he 
6 
 
“could not trace it” because the amount does not correspond to information that he has 
about the account. (Tr. 57-58.)  He reported the amount as income on his tax return and 
incurred a federal tax underpayment of $1,100. He was expecting a state tax refund of 
$1,300 that he planned to use to satisfy his federal tax liability. (Tr. 61.) As for consumer 
credit card accounts, Applicant stated that five collection entities are currently taking 
between $40 and $60 a month from his checking account.3  (Tr. 24, 44.) Applicant believed 
that one of his debts (SOR ¶ 1.c) was being actively collected at $37 a month. After he 
received the SOR, he contacted the creditor holding the debt and made a payment in late 
January 2018, which reduced the balance to $742. (AE B; Tr. 43.) He did not realize until 
May 2018 that he failed to authorize recurring payment. He corrected the issue to repay the 
debt at $37 a month from May 2018 through December 2019. (AEs A, D.) Applicant 
believes that the medical accounts and the wireless phone debt are paid “as noted by the 
absence of these accounts in the collections section” on his credit report. He testified that, 
in November 2017, he made repayment arrangements with an entity now collecting the 
wireless phone debt, and that he is repaying the debt at $60 a month from his account with 
a credit union. (Tr. 46-47.) Information from Credit Karma indicates the wireless phone 
collection account (SOR ¶ 1.d) has been closed with an outstanding balance of $200 as of 
late May 2018. (AE C.) There is no documentation confirming payments toward the 
medical collection debts, although Applicant stated that he began making $40 monthly 
payments toward the debts after he received the SOR. (Tr. 48.) With regard to the timing of 
his debt repayments, Applicant stated: 
 
I didn’t have any more money available. I realized the importance of the 
impact of some of these bills. I wasn’t ignoring them. I was paying other bills. 
I didn’t want anything else to get onto the credit report. I decided to pay 
them. (Tr. 49.) 
 
 Applicant testified to his belief that the $119 medical collection debt (SOR 1.g) has 
been paid (Tr. 49), although he provided no corroborating documentation. Since January 
2018, he and his spouse have less than $100 in discretionary income each month. (Tr. 58.) 
He had $2,500 to $3,000 in his checking account as of mid-May 2018 because he had just 
been paid. (Tr. 62.) 
 
 Applicant and his spouse have been raising his grandson (age 15 as of May 2018) 
since infancy. Applicant has expenses for his grandson’s driving school, competitive 
archery training, and high school activities, in addition to necessities such as food and 
clothing. Applicant’s spouse is currently unemployed and has not worked since 2002. (Tr. 
25, 34.) She finished her cancer treatment in 2016. (Tr. 26.) Applicant’s current salary is 
$93,000 a year. (Tr. 37.) Since 2014 or 2015, he has had retirement income of $1,300 a 
month from his previous job. He applied for the disbursement when his spouse was under 
medical treatment. (Tr. 63.) He has accumulated $7,000 in a 401(k) with his current 
employer. Applicant’s spouse has $12,000 in a retirement account. (Tr. 64.) Before his own 
medical problem in May 2017, he traveled for work and had per diem income that 
augmented his salary by $10,000 a year on average. Applicant expects to resume traveling 
                                                 
3 Applicant had been repaying some debts not alleged in the SOR. (Tr. 43-44.) 
7 
 
for work in the near future. (Tr. 37-39.) He described his financial situation as “the worst it’s 
been in 30 years, but it’s getting better.” (Tr. 64-65.) 
 
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(a), 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 national security 
eligibility will be resolved in favor of the 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 EO 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). 
8 
 
Analysis 
 
Guideline F: Financial Considerations 
 
 The security concerns about financial considerations are articulated in AG ¶ 18: 
 
Failure 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 or 
sensitive information. Financial distress can also be caused or exacerbated 
by, and thus can be a possible indicator of, other issues of personnel security 
concern such as excessive gambling, mental health conditions, substance 
misuse, or alcohol abuse or dependence. An individual who is financially 
overextended is at greater risk of having to engage in illegal or otherwise 
questionable acts to generate funds. . . . 
 
 The Appeal Board explained the scope and rationale for the financial considerations 
security concern in ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted) 
as follows: 
 
This concern is broader than the possibility that an applicant might knowingly 
compromise classified information in order to raise money in satisfaction of 
his or her debts. Rather, it requires a Judge to examine the totality of an 
applicant’s financial history and circumstances. The Judge must consider 
pertinent evidence regarding the applicant’s self-control, judgment, and other 
qualities essential to protecting the national secrets as well as the 
vulnerabilities inherent in the circumstances. The Directive presumes a 
nexus between proven conduct under any of the Guidelines and an 
applicant’s security eligibility. 
 
Applicant is not required to be debt free, but he is required to manage his finances 
in a way to exhibit sound judgment and responsibility. Debts that have been charged off or 
placed for collection raise financial considerations security concerns. Applicant became 
delinquent on a secured line of credit account and an associated overdraft protection 
account while his spouse was undergoing treatment for a serious illness diagnosed in 
August 2013. He had no success in restructuring the debt or obtaining a new loan to 
address the delinquency, and balances of $37,193 and $4,482 were respectively charged 
off in February 2015 and October 2014. A $786 credit card delinquency was placed for 
collection in November 2015 due to nonpayment since February 2014. A wireless 
telephone debt of $262, and three medical debts totaling $419 were placed for collection. 
Disqualifying conditions AG ¶ 19(a), “inability to satisfy debts,” and ¶ 19(c), “a history of not 
meeting financial obligations,” apply. 
 
The burden is on Applicant to mitigate the evidence of financial delinquency. One or 
more of the following conditions under AG ¶ 20 may apply: 
9 
 
(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; 
 
(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, a death, divorce or separation, clear 
victimization by predatory lending practices, or identity theft), and the 
individual acted responsibly under the circumstances; 
 
(c) the person has received or is receiving counseling for the problem from a 
legitimate and credible source, such as a non-profit credit counseling service, 
and there are clear indications that the problem is being resolved or is under 
control; 
 
(d) the individual initiated and is adhering to a good-faith effort to repay 
overdue creditors or otherwise resolve debts; and 
 
(e) the individual has a reasonable basis to dispute the legitimacy of the 
past-due debt which is the cause of the problem and provides documented 
proof to substantiate the basis of the dispute or provides evidence of actions 
to resolve the issue. 
 
 AG ¶ 20(a) does not apply. With the possible exception of the wireless services 
debt, which had some activity on the account in September 2016, the debts became past 
due three to four years ago. The delinquencies were not recently incurred. However, they 
had not been resolved as of the issuance of the SOR in January 2018. The Appeal Board 
recently affirmed that unresolved debts are a continuing course of conduct. See ISCR 
Case No. 17-03146 at 2 (App. Bd. Jul. 31, 2018) (citing ISCR Case No. 15-08799 at 3 
(App. Bd. Nov. 3, 2017)). 
 
Applicant has a credible case for some mitigation under AG ¶ 20(b). Between 2008 
and 2011, Applicant and his spouse continued to pay the mortgage on their home while 
renting separate housing near their son, who had been injured in Iraq. Applicant’s 
daughter, who moved into the home while they were away, could only afford half the 
monthly mortgage obligation. Their monthly housing expense went from $1,600 to $2,000 
(half the mortgage plus their rent of $1,200). Applicant’s spouse’s serious illness, 
diagnosed in August 2013, was an unforeseen circumstance that further compromised the 
family’s finances. Over the next two years, Applicant and his spouse paid $11,000 to 
$12,000 toward her medical expenses. Applicant lost income of approximately $10,000 on 
average a year because he was unable to travel during his spouse’s treatments. The 
secured line of credit, the overdraft protection account, and the $150 medical debts 
became delinquent during that time.  More recently, Applicant had a medical problem in 
May 2017 that led to a loss of 40% in income over the short term and additional medical 
expenses. It continues to have an impact in that he has been unable to travel for work. 
10 
 
Even if Applicant’s financial difficulties initially arose, in whole or in part, due to 
circumstances outside of his control, I have to consider whether Applicant acted in a 
reasonable manner when dealing with his financial difficulties. See ISCR Case No. 05-
11366 at 4, n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. 
May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-
13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether Applicant maintained 
contact with his creditors and attempted to negotiate partial payments to keep debts 
current. Applicant has had retirement income of $1,300 per month for the past two years. It 
is difficult to find that Applicant acted fully responsibly toward his creditors when he did 
little, if anything, to address his delinquencies in 2016 and 2017. Applicant submits that he 
was paying other debts, but the evidence also shows that he took on car payments totaling 
$734 per month in 2015 while collection debts went unpaid. Applicant did not recognize the 
medical debts when confronted about them during his subject interview, but he knew that 
he had at least one delinquent credit card account (SOR ¶ 1.c) that he believed was in 
collections for $700. He ignored the debt until it was clear that it became an issue for his 
security clearance eligibility. 
 
AGs ¶¶ 20(c) and 20(d) have minimal applicability. Applicant presented 
documentation showing that he has a repayment plan established for the debt in SOR ¶ 
1.c showing a payment of $37 on the same day as his security clearance hearing. He 
indicates that he also made a payment in late January 2018, and available credit reports 
show some reduction in the balance from $786 in November 2017 to $742 in May 2018. 
Applicant submits that the medical and wireless phone debts in collection have been paid 
because they are not listed in the collections section on his May 2018 credit report. The 
Appeal Board stated in ISCR Case No. 16-01338, decided on July 13, 2018: 
 
As we have previously stated, a credit report, in and of itself, may not be 
sufficient to meet an applicant’s burden of persuasion as to mitigation, 
insofar as it provides little evidence regarding the underlying circumstances 
of the debt. Moreover, the fact that a debt no longer appears on a credit 
report does not establish a meaningful, independent evidence as to the 
disposition of the debt. See, e.g., ISCR Case No. 14-03612 at 3 (App. Bd. 
Aug. 25, 2015). For example, debts may fall off credit reports merely due to 
the passage of time. See, e.g., ISCR Case No. 03-20327 at 6 (App. Bd. Oct 
26, 2006). 
 
Applicant presented only part of his May 2018 credit report. Even so, it shows that 
the wireless phone account, now closed, has a $200 balance. The medical debts are not 
listed. He testified that he made $40 monthly payments toward the $300 in medical 
collection debt (SOR ¶¶ 1.e and 1.f) after he received the SOR, but he presented no 
payment records. He made no progress toward resolving the $37,193 and $4,483 charged-
off debts. Applicant asserts an intention to repay the debts when he sells his home 
because the bank has a lien against his property. The Appeal Board has consistently held 
that a promise to pay a debt in the future is not a substitute for a track record of paying 
debts in a timely manner. See e.g., ISCR Case No. 09-05390 at 2 (App. Bd. Oct. 22, 
2010). While Applicant testified that he received a 1099 form for $9,999 from the creditor in 
11 
 
2017, and that he reported it on his income tax returns, the form itself is not in evidence, 
and he could not explain it. Neither AG ¶ 20(c) nor AG ¶ 20(d) applies to the charged-off 
debts in SOR ¶¶ 1.a and 1.b. 
 
AG ¶ 20(e) was not established. Applicant asserted that he paid on the account in 
SOR ¶ 1.a for several years before he fell behind. He disputed the terms of the account in 
that the bank converted it to a mortgage loan, but he learned that it was allowed under the 
terms of the contract. 
 
Applicant is not required to pay off every one of his past-due debts before he can be 
granted security clearance eligibility. However, some concerns persist about his financial 
stability. His home mortgage was past due 30 days in March 2017 before his medical issue 
in May 2017. His short-term disability in the summer of 2017 explains why he was past due 
30 days on his mortgage in August 2017, but he was again 30 days past due on his 
mortgage from January 2018 to May 2018. He had vehicle expenses in late 2017 that may 
not have been discretionary and caused some financial strain. His retirement income of 
$1,300 is more than ample to cover his car payments. He did not adequately explain or 
document why he has been unable to catch up on his mortgage payments in 2018 when 
he is earning $93,000 in base salary with a defense contractor. More progress is needed 
toward resolving the past-due debts to mitigate the financial considerations security 
concerns. 
 
Whole-Person Concept 
 
In assessing the whole person, 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(d). The analysis under Guideline F is incorporated in my whole-
person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but 
some warrant additional comment. 
 
 The security clearance adjudication involves an evaluation of an applicant’s 
judgment, reliability, and trustworthiness in light of the security guidelines in the Directive. 
See ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). It is not a proceeding designed to 
collect debts. At the same time, 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 (9th Cir. 
1990). Applicant obtained a secured line of credit without fully understanding the terms of 
the contract, but this does not excuse him from his contractual liability. Based on the 
evidence presented, I am unable to conclude that it is clearly consistent with the national 
interest to continue Applicant’s security clearance eligibility at this time. 
12 
 
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 
 
Subparagraphs 1.a-1.g:   Against Applicant 
 
 
Conclusion 
 
In light of all of the circumstances, it is not clearly consistent with the national 
interest to grant or continue Applicant’s eligibility for a security clearance. Eligibility for 
access to classified information is denied. 
 
 
_____________________ 
Elizabeth M. Matchinski 
Administrative Judge