Will Bankruptcy Hurt My Immigration Status?

Here is a post by my friend and fellow blogger, Jay Fleischman, on his blog about filing for bankruptcy and the impact on your immigration status.  I like his common sense advice.

When a potential client is sitting in front of me and contemplates filing for bankruptcy, they often ask about the impact of the proceeding on their immigration status.  If you’re a permanent resident of the U.S. or a visa holder, you need to know how filing for bankruptcy will impact you – and what you need to discuss with your immigration lawyer.

Many permanent residents and those on visas are deep in debt and considering either Chapter 7 or Chapter 13.  Thankfully, there’s nothing in the immigration or bankruptcy laws that make life difficult for those who have filed for bankruptcy.  Your naturalization papers don’t ask if you’ve filed for bankruptcy, nor do your bankruptcy papers ask you about your immigration status.

The only thing that may impact your immigration is your moral character.  There was a time when being in debt may have been evidence of living outside of the general standards of the community, but with over 1 million people filing for bankruptcy each year any such argument would be unlikely.  In fact, there’s a pretty good chance that your immigration hearing officer or someone close to them has experienced bill problems of their own.

In fact, there’s some evidence that being in debt and letting it stew without taking any action may negatively impact your immigration status.  When you file for citizenship there’s a question that asks about whether you owe any federal, state or local income tax debts.  If you do then you’re going to have some explaining to do before you take the oath.

In addition, willfully failing or refusing to pay child support may be considered evidence of poor moral character under 8 C.F.R. § 316.10(b)(3).  That, too, will stand in the way of your ability to become a U.S. citizen.  By filing for bankruptcy under Chapter 13, however, you may be able to reorganize and repay those child support debts and show you’ve mended your ways.

The upshot is this – it’s better to be out of debt than in debt.  The U.S. government recognizes this, and doesn’t want to stand in your way.  If you’re an honest person and in debt, filing for bankruptcy will leave you in a better financial situation.  That, in turn, will make you more likely to be a productive member of society and less likely to need to rely on the government for financial assistance in the future.

For more information and legal advice, please seek an immigration law specialist.  Kansas attorneys who specialize in immigration law are Michael and Rekha Sharma-Crawford and Angela Ferguson.

Jay Fleischman and Jill Michaux blog on Bankruptcy Law Network and Money Health Central.

I Feel So Guilty Filing Bankruptcy

People seeking debt relief often feel guilty about filing for bankruptcy.  We are raised to pay our debts and conditioned to feel bad when we can’t.  In fact,  people will go to extreme measures, such as depleting the retirement account, to avoid bankruptcy.

When you can’t pay your bills because your credit card lenders have raised interest to 30%, it is time to stop feeling guilty.  Stop feeling bad about bills you can’t afford to pay.

It may not be your fault.  It may be that someone in your family has gotten sick or injured and you are facing huge medical expenses.  It may be that you have lost your job on main street because of greedy acts on Wall Street.  It may be that your marriage ended.  Most Americans are one injury, illness, job loss or divorce away from bankruptcy.

Bankruptcy is a legal way to resolve your debts.   It is for honest debtors who play by the rules.  Get the fresh start you deserve and get on with your life in peace.  Call today to see if bankruptcy is the right solution for your financial problems.

Bankruptcy-It Could Happen to Anyone

What Happens to Divorce Debts in Bankruptcy?

Debts in the nature of support of child or former spouse are not discharged in either chapter 7 or 13 bankruptcy.

What about property settlement debts?  If the divorce decree contains a hold harmless obligation that makes one spouse indemnify the other spouse, then the hold harmess oglibation is a separate debt to the spouse and is not dischargeable in chapter 7 bankruptcy 523(a)(5) or 523(a)(15).

The hold harmless obligations can be discharged in chapter 13 bankruptcy as long as the debt to the former spouse not a Domestic Support Obligation (DSO).  This is possible because property settlement debts under 523(a)(15) are not excepted from discharge in chapter 13 cases.  See Schuett v. Finkey, 2008 Bankr. Lexis 1555 (Bankr. D. Neb. May 21, 2008).

What are Bankruptcy Avoidance Powers?

Avoidance powers: Rights given to the bankruptcy trustee (or the debtor in possession in a Chapter 11) to recover certain transfers of property such as preferences or fraudulent transfers or to void liens created before the commencement of a bankruptcy case. More on preferences.

What is Bankruptcy Lien Avoidance?

Avoidance: The Bankruptcy Code permits the debtor to eliminate (avoid) some kinds of liens that interfere with (or impair) an exemption claimed in the bankruptcy. Most judgment liens that have attached to the debtor’s home can be avoided if the total of the liens (mortgages, judgment liens and statutory liens) is greater than the value of the property in which the exemption is claimed. This is sometimes called “lien stripping.” For more, see Lien Avoidance and Lien Stripping.

Do You Owe What I Owe? Peace, Fresh Start Waiting for You New Year's Night

My blogging colleague, Wendell Sherk of St. Louis, MO, wrote this bankruptcy riff on an old Christmas carol:

Do You Owe What I Owe?

(To the tune of “Do You Hear What I Hear?”)

Said the neighbor to the young man,
“Do you owe what I owe?
Bills up to the sky, young man,
Do you see what I see?
A choice, a choice, waiting in the night
A new start to end the year alright,
A fresh start for a New Year’s Night.”

Said the collector to the young man,
“I know what you owe…
Bills up to the sky, little debtor man,
Do you hear what I say?
Pay what you can’t pay, little debtor man!”
With a voice as big as the sea,
With a voice as big as the sea.

Said the young man to the lawyer kind,
“Do you know what I owe?
In your palace warm, lawyer man,
Do you know what I owe?
An arm, a leg, I’ll be out in the cold–
Help me save a little silver, or gold,
Help me save a little silver, or gold.”

Said the judge to the people everywhere,
“Listen to what I say!
Be at peace, people, everywhere,
Listen to what I say!
A fresh start, a new start, waiting in the night
To bring you peace and goodness,
To bring you quiet in the night.”

With apologies to Noel Regney & Gloria Shayne Baker

A sample of the original (better) song can be found here.

What is the Automatic Stay?

Automatic stay: The injunction issued automatically upon the filing of a bankruptcy case which prohibits collection actions against the debtor, the debtor’s property or the property of the estate. See Relief from Stay on terminating the injunction.

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