Bankruptcy and immigration status

If you are a legal resident in America and want to file for bankruptcy, then you can.

You do not need to be a U.S. Citizen, or have a green card to file bankruptcy in the United States.

A U.S. bankruptcy is also effective against creditors outside of the United States.

There is no law that says that filing for bankruptcy will prevent the United States Citizenship and Immigration Services from approving your visa, green card, or citizenship application.

However, filing a bankruptcy can potentially affect your immigration status in a few ways.

Please note, I am writing this article from the perspective of a Minnesota bankruptcy attorney, and do not have a background in immigration law.

Should you need legal advice regarding immigration, then you should seek the advice of a Minnesota immigration attorney.

How does bankruptcy affect immigration?

To become a citizen or lawful permanent resident of the US, you must prove that you have ‘good moral character’.

However, there is no hard and fast rule of what ‘good moral character’ is and what it is not.

The ‘good moral character’ requirement enables the immigration case agent to look at the larger picture of your life, and make sure that you’re not a ‘trouble maker’.

A bankruptcy could be evidence of bad character if you had deliberately run up tens of thousands of dollars in debt, and then filed for Chapter 7 bankruptcy or Chapter 13 bankruptcy, due to:

Paying for a destination wedding
Using the bankruptcy laws to avoid paying alimony to your ex-spouse even though you had enough income to pay it
Funding a lavish lifestyle

You may be asked about taxes, but you won’t be asked about debt, foreclosure, bankruptcy or other financial issues.

Our experience

In our experience, most bankruptcies are not the result of deliberate overspending , and so are not evidence of ‘bad moral character’.

Our typical bankruptcy clients are honest, hardworking people who have fallen on hard times.

Our clients have many reasons for filing for bankruptcy, and most tell us that they need help because of a job loss or a trip to the emergency room, or perhaps because they are paying a high mortgage with a principal balance more than the value of their home.

These types of bankruptcies are generally not seen as evidence of bad moral character and so do not impact on immigration. These people are not liars and cheaters.

American Culture

American culture has long believed in the idea of a second chance.

Our bankruptcy laws further this goal by allowing someone who has more debt than they can repay to file for bankruptcy.

This generally discharges many types of debts.

The idea is that people should be allowed to start anew, and make of themselves what they can.

Our immigration laws work toward this goal by not considering a bankruptcy filing alone to be evidence of ‘bad moral character’.

What about bankruptcy crimes?

The usual reason why a bankruptcy hurts someone’s immigration case is because the immigrant committed a bankruptcy crime.

Bankruptcy crimes are things like:

Lying under oath
Supplying false financial statements
Omitting essential information or assets from your bankruptcy papers

Simply filing for bankruptcy because you have too much debt is not a bankruptcy crime, and so is not a basis to deny an immigration petition.

Bankruptcy crimes are very rare, however, and a good bankruptcy lawyer will make sure that you don’t commit them.

What if you commit bankruptcy crime?

If you are convicted of a bankruptcy crime:

You can face jail time and a denial of your bankruptcy discharge
You could be removed from the US and barred from re-entry for many years or even life

People very rarely commit bankruptcy crimes because the bankruptcy system relies on all parties to be completely honest and provide all relevant information.

In addition, around 1 in 250 people are subjected to a bankruptcy audit.

We have helped over 40,000 people file bankruptcy in Minnesota since 1977.

Rest assured:

Walker & Walker Law Offices, PLLC has never had a client charged with or convicted of bankruptcy crimes

Fresh Start

One of the principles of American bankruptcy law is that if you tell the truth and reveal your entire financial life, you are entitled to the fresh start that a bankruptcy discharge gives.

It is my job to help make sure that everything on the petition is true, correct and complete so that you will have no fear of being charged with bankruptcy crimes.

Can I sponsor someone else’s visa or citizen application after filing for bankruptcy?

Yes, you can still sponsor someone else to enter the country during and after filing for bankruptcy

USCIS form I-864P is the HHS Poverty Guidelines for Affidavit of Support and bases these calculations primarily on income, which the bankruptcy leaves intact.

Another thing to remember is that:

The bankruptcy discharge generally does not relieve you of the duty to support the person you are sponsoring
If that person enters the country and then receives government benefits, you will likely have to repay those benefits to the government even if you have filed a bankruptcy

Conclusion

If you’re thinking about filing for bankruptcy, but are worried about your immigration status, then why contact us at 612.824.4357 today for your Free Bankruptcy Evaluation?

We’ve helped over 40,000 people become debt free and file for bankruptcy in Minnesota. How will we help you?