DOHA Guideline F

Did not disclose closed and charged off account (significant amount) since it was right at the cusp of being outside the 7 year window on my SF86. DOHA comes back and wants to know in SOR why the account is charged off and remains delinquent. What should I put in my response? I really have kept my financials pretty squeaky since, but I had just gotten out of the Navy and couldn’t find work for a few months. The debt became insurmountable as I had no degree and the work I could find didn’t pay well.
Question, how do I spin this correctly?

This is gonna be hard to spin. A charge off is not a debt forgiveness. You admitted to owing the debt for approximately 7 years but did not pay the debt.

The best spin would have been to report that you have been making payments towards the debt since you became employed…

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@EdFarmerIII might be able to help you with this… Since you received SOR, I would at least consult a security clearance attorney on this. This guideline and issue are the only ones mentioned in SOR?

Problem is that I didn’t make payments on this particular account. Due to a disagreement with the bank, I kind of got the short end of the stick. Every time the bank would call we would reach an impasse and after 6 months of not being able to make a payment I told them to close the account.
I was mid to late 20s and had a wife and two young kids who needed the money to eat and not pay off old debt.
This is only for Secret and have held TS before. I have had the DOHA for a week but am not sure what to put on there.

A few things stand out:

The term “Spin”
Impasse with bank
“short end of the stick”
mid to late 20s, wife, kids…eat not pay old debt.
Debt within 7 years, reportable.

“Spin” indicates shading, playing down, making light of. Only solution: initiate and follow a repayment plan acceptable to bank. You are responsible for debt, regardless of life situation. Hoping it falls off 7 year guideline; not responsible. Even with a recovered FICO, as payment history is what is important. Doesn’t reflect well when asking to be trusted to follow rules on Classified.

Impasse: They wanted you to pay, you wanted to pay less or not at all. Not impasse. It is legal debt. Solution: pay on it or pay it all off with a loan. Address it.

Short end of stick: Living up to financial promise to pay…isn’t the short end. Yes life throws curve balls. That isn’t a short stick, it is life and responsibility.

20’s eat not pay: Comes across as an emotional appeal and an excuse. Even if true. You had bills, and mouths to feed. You already spent someone’s money, they want you to pay it back. This demonstrates trustworthiness and responsibility.

Debt within 7: Absolutely reportable. Not reporting looks like you do not live up to your word…you spin, shade, justify, try to hide legit debt. Get a repayment plan; stick to it.

If you do, you MAY win on appeal if this is the only item. But if you hem and haw and dodge responsibility on other areas in the same manner…that too comes across. And not favorable.

Having debt, not paying on it, and then not claiming it…trifecta. Once they feel you are not being candid you have a steeper hill to climb.

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If this is the only thing that they are pointing to, you need to make an effort to show that you intend to stand up to this responsibility. You have a couple of choices:

First, you can likely convince a judge that you will enter into a payment plan once you are better employed.

Second, you can enter into a dispute over the debt with the credit reporting agency. This isn’t likely to come out in your favor.

Third, you can enter into a payment plan with the bank, in writing and then make the payments.

Fourth, you MAY be able to negotiate a smaller amount to pay off the debt. Depending on the size of the debt, some banks will allow you to pay it off as low as 40 cents on the dollar.

The bank has little interest in carrying this loan on their books. They know it’s going to fall off of your credit report but you investigators will continue to see it in the future. Just because you will not have to report it doesn’t mean that they will not see. it.

In short, you need to DO something . . .

The issue is that it doesn’t appear on my credit pull. It didn’t when I filled out the SF86. But, showed up for about 6 months as they were conducting the investigation and now is gone.

It showed up, had to.

The investigation involves more than just the three credit reporting agencies. They have access to deeper databases and very little, if anything, actually goes away.

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Ed is correct. I see near perfect credit scores for senior management folks, and they reveal their credit agency checks, yet on occasion the BI person finds an obscure debt from 9 years previously, written off by the company…yet it shows as being delinquent. The question comes up often as to how an applicant can be held responsible for data not showing up on the credit reports. I agree. But then folks generally know if they had a payment dispute and lost track of it over time. The answer again is that FICO, though fairly dynamic and accurately reflective of a person’s credit history, is less important than the actual behavior leading up to the FICO.

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