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Can Bankruptcy Affect Immigration
Status for Me & Relatives?

Vivona Pandurangi, PLC April 22, 2022

You’ve made it to the United States as an immigrant and you have a green card giving you lawful permanent resident (LPR) status. You hope to bring your loved ones still overseas to join you, just as you also hope to become a naturalized citizen. Yet, you have debts growing out of control and you must deal with that crisis at the same time. Is it possible to file for bankruptcy and still retain your LPR status and file to become a citizen?

As far as bankruptcy is concerned, you don’t need to be a citizen to seek protection under its code, and the United States Citizenship and Immigration Services (USCIS) generally won’t use bankruptcy against you as you navigate the immigration system, but there are pitfalls to avoid.

Regardless of your immigrant status, if your debts are overwhelming you in or around Falls Church or Alexandria, Virginia, contact the bankruptcy attorneys at Vivona Pandurangi, PLC to discuss your options. From our two offices, we proudly serve clients in need of financial relief not only in those two cities, but also in Arlington, Fairfax, Manassas, Prince William, and Loudon.

The Bankruptcy Process: Do I Qualify?

You do not need to be a citizen to take advantage of the U.S. bankruptcy code. You just need to reside here, though there are state residency requirements. Generally, you must have resided in your current state for 180 days before filing.

Filing for bankruptcy immediately ceases all collection activities and halts repossession and foreclosure efforts as well, though the latter may only be temporary. Filing in general gives you two choices. One is to create a repayment plan that uses your disposable income – what’s left after paying your living expenses – to satisfy your debts over a three- to five-year period. The other option is to sell off your non-exempt assets to satisfy creditors.

The first option is called “the wage earner’s plan,” as you need to have a monthly income to qualify. The latter is known as the “liquidation plan” since it does involve selling some of your possessions to help pay your debts, though the law allows exemptions for equity in a home or a car. Assets like retirement accounts are also exempt.

Does Bankruptcy Affect My Immigration Status?

The U.S. federal bankruptcy code prevents the government from discriminating against a person for filing for bankruptcy, and this includes any immigration petition you may be filing or contemplating. No section of the bankruptcy petition asks about the petitioner’s immigration status, and the USCIS will not take into account your bankruptcy.

Fortunately, federal immigration law does not consider anyone who files for bankruptcy to be a public charge. This is important because the USCIS has the authority to deny a visa or other immigration petition to someone considered to be a public charge, that is, someone who relies on public benefits such as food stamps.

The USCIS, however, does look to see if an applicant is of “good moral character.” Filing for bankruptcy itself is not considered a strike against one’s moral character, but if you try to cut corners or cheat on the bankruptcy process, that can come back to haunt you.

Say you fail to disclose assets or use an illegally obtained Social Security number (SSN), and you’re discovered by the bankruptcy court. That could definitely show up on an immigration petition you file as a mark against your character.

How a Skilled Bankruptcy Attorney Can Help

You may be able to consolidate your debts or seek relief without resorting to bankruptcy. You should consult with an experienced bankruptcy attorney to weigh all your options, including bankruptcy. Vivona Pandurangi, PLC has offices in Falls Church and Alexandria, Virginia. Contact us immediately if your debts are overwhelming you and you need relief. Let’s start working on your fresh financial start.