Who may be a debtor and eligible to file bankruptcy? According to 11 USC §109(a), “. . . only a person that resides or has a domicile, a place of business, or property in the United States, . . . may be a debtor under this title.” There is no requirement that you be a U.S. citizen or legal resident (e.g. green card holder) to file for bankruptcy. As long as you have lived in the U.S. for at least 6 months, have a business in the U.S. or own property in the U.S., you are eligible.
The bankruptcy petitioner, however, will be required to prove their identity through a valid or current government issued i.d. (such as a driver’s license), and proof of their social security numbers (“SSN”) or Individual Taxpayer Identification Number (“ITIN”). If the debtor does not have a SSN or is not eligible for one, then they may apply for an ITIN with the Internal Revenue Service, which does not ask for the immigration status of the applicant.
Will filing bankruptcy affect my immigration status? According to Bankruptcy Code §525(a) [11 USC §525], the government cannot discriminate against anyone, including non-citizens, filing for bankruptcy protection. Bankruptcy Code §525(a) states the following:
“a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associated, solely because such bankrupt or debtor is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of the case under this title, or during the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.”
This means that the government cannot reject or deny approval of the immigration petition of a non-citizen based solely on them filing for bankruptcy protection.
A major requirement to become a U.S. citizen or legal resident requires the applicant to have “good moral character.” The United States Citizenship and Immigration Services (“USCIS”) office wants to make sure that the person who is coming into the United States is an upstanding person who follows the laws, is honest, is not applying for legal status with fraudulent intent and will not be a charge on the State. Good moral character is amorphous, not clear-cut and determined on a fact-by-fact basis.
Filing bankruptcy may be evidence of bad moral character if just before filing bankruptcy, the applicant ran up a huge party bill or purchased expensive and lavish items, which he never intended to pay back or was unable to pay back, or purposely avoided paying back debts owed to creditors even though he had sufficient funds to do so. These facts indicate fraudulent intent and will seriously affect the applicant’s immigration status, as well as the bankruptcy petition. On the other hand, bankruptcies that will not affect the immigration petition/status would include instances where the applicant, for example, had an unexpected large emergency room/medical bill or he was terminated from employment due to company downsizing and, as such, unable to make ends meet. In other words, bankruptcy petitioners that are honest, but have fallen on hard times, will be eligible to file bankruptcy, which simultaneously will not affect their immigration status when doing so.
In essence, immigration applicants who are filing bankruptcy should have no problem or issues with their bankruptcy petition or their immigration status so long as they are honest, do not lie under oath, do not provide false information, do not hide material facts and/or do not hide assets from creditors.
Please feel free to contact Ananian Law Group and speak to one of our professionals should you have additional questions or concerns regarding bankruptcy or if you would like to begin the process of filing for bankruptcy protection.
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