Woman Calculating Her Debt

Will Bankruptcy Affect My Immigration Status?

The Orantes Law Firm May 8, 2023

When facing financial adversity, bankruptcy is among the promising solutions to remedy your financial situation. Essentially, anyone living in the United States is legally eligible to file for bankruptcy. However, various issues may arise when a non- U.S. citizen or green card holder who previously filed for bankruptcy applies for citizenship. 

Additionally, having "good moral character" is one of the requirements for U.S. citizenship. Although, this is a vague requirement with no clear rule regarding what entails good moral character for citizenship purposes. Unfortunately, the reason for your financial hardship before filing your bankruptcy petition – if intentional – might be considered and used as evidence of "bad character," thus affecting your U.S. citizenship application. 

At The Orantes Law Firm, we're dedicated to offering knowledgeable guidance and advocacy to clients in bankruptcy and immigration-related matters. Our experienced California bankruptcy attorney is available to discuss your unique circumstances and enlighten you about how bankruptcy might affect your immigration status or that of a relative. We're proud to serve clients across Los Angeles County, Orange County, Irvine, and Los Angeles, California. 

Do I Have to Be a U.S. Citizen to File for Bankruptcy? 

No, you don't have to be a U.S. citizen to file for bankruptcy. Although, bankruptcy courts often require proper documentation from consumers seeking bankruptcy, including a tax identification number and social security number. Thus, if you live in the United States and you have the necessary documentation, you legally qualify to file for bankruptcy. 

Understanding the "Good Moral Character" Requirement 

When applying for U.S. citizenship, one vital requirement is "good moral character" (GMC). This requires you to show that you have been – and will continue to be – someone of good moral character during the three years or five years of permanent residency preceding your citizenship application. In order to be considered a person of GMC you must show that: 

  • You don’t habitually abuse alcohol. 

  • You aren't involved in any crime. 

  • You've been a responsible member of your family, workplace, and community. 

In some cases, your behavior or conduct before the three or five-year period might also be taken into consideration to determine whether to grant or reject of citizenship application. In a situation involving bankruptcy, the USCIS may consider what put you into financial distress before filing for bankruptcy.   

For instance, if you're unable to pay bills or settle your debts because your employment was terminated due to the economy or as a result of a medical emergency, this may not be considered as bad character. Conversely, if you deliberately racked up debts or lived a lavish lifestyle before filing for bankruptcy, this might be used as evidence of bad character against you. 

Filing for Bankruptcy  

To be legally eligible to file for bankruptcy in the United States, you must have any of the following documents: 

  • Social Security Number (SSN) 

  • Individual Tax Identification Number (ITIN) 

  • Employer Identification Number (EIN) 

  • Tax Identification Number (TIN) 

An experienced attorney can explore your available bankruptcy options, determine whether you qualify, help file your bankruptcy petition, or enlighten you about your other debt relief alternatives.  

Debt Relief Alternatives 

If you’re concerned about the impact bankruptcy may have on your immigration matters, consider the alternatives that can help you achieve debt relief: 

  • Make lifestyle changes that allow you to spend less and save more. This will help you put more money into repaying your debts. 

  • Settle your debts for less than the actual amount owed by offering a huge lump-sum payment to your creditor. You can achieve this by going through a debt settlement company. 

  • Consolidate your debts. This involves combining several loans, liabilities, credit card debts, and other bills into one larger debt. You will need to take out a new loan to pay back your debts. 

  • Credit counseling could also work to your benefit. This involves seeking help from an approved credit counselor. They will help review your income, expenses, and debts and craft a budget. They can also help negotiate with your creditor and organize a debt management plan for you to settle your debts. 

  • If you own substantial assets, like real estate properties, expensive pieces of art, or any high-priced automobiles, you can sell these to help pay off your debts. 

No matter your circumstances, a trusted bankruptcy lawyer can enlighten you about the benefits and drawbacks of each debt relief alternative and help determine the right one for your personal situation. 

Practical & Purposeful Legal Guidance  

Filing for bankruptcy is a massive decision that requires proper consideration. Especially when you're a non-U.S. citizen or green card holder, you may be concerned about how your bankruptcy filing might affect your immigration status or citizenship application. Therefore, consulting with a knowledgeable bankruptcy attorney is crucial for experienced legal guidance and to help you make informed decisions. 

With more than 20 years of experience, we can help determine whether bankruptcy is right for you and how it may affect your immigration status. If not, we can help you explore your other debt relief alternatives.  

Contact us at The Orantes Law Firm today to schedule a simple case assessment with a reliable bankruptcy lawyer. Our trusted attorney can offer you the comprehensive and dedicated guidance you need in your bankruptcy matters. We're proud to serve clients across Los Angeles County, Orange County, Irvine, and Los Angeles, California.