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.