Bankruptcy’s Impact on Immigration Status

Bankruptcy and Immigration are both under the jurisdiction of the U.S. federal courts, but administered by separate divisions within the federal court system.  Leaving your country for the start of the better is the most exciting and challenging thing one can ever think of doing. United States is known as the land of opportunities, freedom, and a start to live American dream. The cost of immigration can be high and sometimes many jobs do not pay as well as one would hope. Adding the stress of how immigration status can be affected by existing stress of debt, the whole ordeal can become quite burdensome. This article is intended to highlight the ways filing for bankruptcy can impact your immigration status.

Impact Bankruptcy Filing has on Immigration Status

To become a United States citizen or lawful permanent resident of United Status, on an application, the applicant is required to demonstrate that they have “good moral” character. What is meant by “good moral” character is an ambiguous term that courts these days struggle with because there is no hard and fast rule as to what is meant by this term. For example, if you run up tens of thousands of debts to pay for something extremely lavish, and then filed for Chapter 7 or Chapter 13, your character may come into question and is likely to impact your immigration status. However, most bankruptcies are not evidence of bad moral character. Bankruptcy may be filed when there is generally loss of job, several trips to emergency room, or even when mortgage with high payment and principal balance exceeds the value of the house.

Impact Bankruptcy Crimes have on Immigration Status

If you are convicted of a bankruptcy crime, your immigration status will likely be impacted. One may convicted of bankruptcy crime by: 1) lying under oath; 2) supplying false financial statements; and intentionally omitting information; or assets from your bankruptcy papers. If any of these crimes are committed, then the likely consequences are to be severe. Jail time, denial of bankruptcy charges are only few to name. The most severe punishment one can imagine in this situation is removal from United States and barred from reentry for many years or even life.

Impact Bankruptcy Filing Has on Sponsorship of Someone Else’s Visa or Citizenship Application

It is still possible to sponsor someone to enter the country after filing for bankruptcy. According to USCIS, calculations are simply based primarily on income, which bankruptcy leaves intact. Regardless, even if bankruptcy is discharged, does not necessarily relieve your duty to support the person you are sponsoring. If the sponsored person, after entering the country, receives governmental benefits, person sponsoring will be required to pay back those governmental benefits, even after filing for bankruptcy.

Filing for Bankruptcy as Undocumented Alien

Under the Bankruptcy Code, “only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under the code.” [11 U.S.C. Section 109(a)]. No one in the Bankruptcy code does it state anything about being a citizen. Even if not allowed to be in United States, you can still be eligible for bankruptcy filing as a resident. Only requirement to be met as a resident is physical presence in United States for the180 days. If this requirement is satisfied, then you will be considered a undocumented debtor.
Generally, the only common issue as undocumented debtor is the required identity proof. It is generally asked to provide some sort of identification. The identification can range anywhere from valid photo identification, social security number, or Individual Tax Identification Number (ITIN).

If you are caught providing a fraudulent identification- you will suffer negative consequences that will impact immigration status. If false identity is used on any of the debt instruments, bankruptcy court may disallow your discharge. Prior to having an opportunity to become a citizen, it is advised to speak with a bankruptcy attorney who is familiar with the above-described issues.

Final Thoughts on Bankruptcy and Immigration Status

No matter what your financial status is, immigration officers always consider immigrant’s financial status. Therefore, it is generally advised as an immigrant to always be truthful while filling out any relevant applications and always disclose your financial history to the federal government, if required. Additionally, it is good to make sure all your income is reported to IRS on tax returns. As always, if any questions or concerns exist, it is advised to consult an Immigration and/or Bankruptcy law attorney before filling out any applications that can determine your immigration status.

If you have any questions about bankruptcy as it is related to immigration issues, call 770-609-1247 to speak with one of our experienced bankruptcy and immigration attorneys.