Understanding Bankruptcy for Legal Immigrants in the United States

Many U.S. residents have no idea that immigrants are allowed to file for Chapter 7 bankruptcy, even if they are not citizens. In fact, immigrants who are in the country illegally also can file for bankruptcy protection, although they obviously risk deportation by coming forward this way. The only requirement is that the person lives or works in the United States, or owns a business or some type of asset in the country.

Effect on Immigration Status

Filing for bankruptcy protection normally does not affect the immigration status of an individual who is in the country legally. The most important aspect is to be completely truthful in the paperwork and not to take any actions that could be viewed as fraud.

For example, running up a credit card within a few months before filing is strongly discouraged. Not only will the court likely exclude that debt from protection, this behavior might have a negative effect on the individual’s legal status. Fraud during the bankruptcy process is considered criminal activity.

Impact on Applications for Citizenship or Green Card

The filing also usually has no impact on the person’s future application for citizenship or a green card for permanent residency status. Case workers are required to verify that the applicant is of good moral character, although this is a relatively vague description. The point is to ensure that people granted citizenship or permanent residency are unlikely to cause trouble. A very large majority of men and women who file for bankruptcy did not indiscriminately run up debt. Instead, they encountered some difficulty along the way that made it impossible to pay their obligations as agreed on. Often, the problem involves high medical bills or a job loss.

The Importance of an Attorney

Having an attorney complete and file the paperwork makes sure that the filing is done correctly and no information is omitted or falsified. How do I hire a bankruptcy lawyer? That may be the next question, along with how much a lawyer charges for this service. Bankruptcy attorneys typically offer free consultations, during which the individual can ask any questions he or she has about the process.


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