Considering what’s at stake, if you are either a legal or illegal immigrant and are thinking about filing bankruptcy, this is definitely an area where you need the advice of both a bankruptcy attorney and an immigration attorney. It’s my job to give my clients advice, but sometimes the most important thing is to tell them that they need the help of another professional. This is one of those situations.
When you go to meet with each attorney, here are some general principles that can guide your discussions with them:
1) Just as the bankruptcy documents don’t ask you anything about your citizenship status, your naturalization application will not directly ask anything about filing bankruptcy. Bankruptcy is a legally accepted method for dealing with your debts. In fact it may even help you avoid dealing with your debts in more desperate ways which could hurt your citizenship application.
2) To become a lawful permanent resident or citizen, you must establish that you are of “good moral character.” It is not likely that your bankruptcy filing will be seen as an issue of moral character. Immigration applications are considered on a case-by-case basis, so you need to talk with an immigration attorney who is thoroughly up-to-date on current practices.
3) If you have been convicted of a crime, or if you disclose on your bankruptcy paperwork that you committed a crime, your immigration application could be denied. Certain crimes could even result in your being deported. Examples include crimes of “moral turpitude” like using other people’s credit cards, writing fraudulent checks, tax evasion, fraudulent transfers of assets, or providing false information to the federal government (for example, in bankruptcy paperwork!).
4) Your citizenship application will ask if “you have ever failed to file a required federal, state or local tax return,” and whether you owe any overdue taxes. Bankruptcy can legally discharge some taxes, but it may hurt your immigration application. This can be a real problem if you have been getting paid “under the table,” without having taxes withheld.
5) If you’re not legally in the U.S., you are exposing yourself to the legal system by filing for bankruptcy. False social security numbers—either on the bankruptcy documents or even on old credit applications—will probably lead to huge problems. In some parts of the country, U.S. Attorneys appear at the Meeting of Creditors to ask about these and other immigration-related matters. You will be under oath and may find yourself in a very sensitive and risky situation.