Undocumented Immigrants Can File For Bankruptcy If They’re Careful
Bankruptcy is for everybody, and anybody can find themselves in financial trouble. But what about undocumented or illegal immigrants? Can they file for bankruptcy? Or is bankruptcy only reserved for citizens, or those who are in the country legally, and with proper documentation?
Undocumented Immigrants Can File
The good news is that the laws do not restrict bankruptcy only to U.S. citizens. The definition of a debtor as written in the bankruptcy code says nothing about any requirement to be a citizen. Undocumented immigrants can, and do, file for bankruptcy all the time, and no trustee or judge can deny a discharge to you, solely on the basis of your status in this country.
That said, there are some practical hurdles to overcome if you are an undocumented immigrant trying to file for bankruptcy.
The first is the residency requirement, which applies to everyone, citizen or not.
The law requires that you live in any US state for at least 90 days before you file for bankruptcy. Additionally, you must have owned or lived in property in the US for those 90 days. You will have to show some sort of proof of residency when you file your case.
The other practical problem is identification. If you have a Social Security number, you should be fine, although many undocumented immigrants don’t have a Social Security number. Alternatively, you can show an ITIN, which is an individual taxpayer number that is issued by the IRS.
The other problem is your exemptions. Many exemptions may require that you have a green card, or that you be a resident of a certain state for a given amount of time, to get the benefit of those exemptions.
That means you could lose more property than you would if you were not undocumented—but your bankruptcy attorney can give you a better idea of whether you need the exemptions, and what you stand to lose if you can’t use those exemptions.
Many immigrants will worry about being deported. Most trustees could care less about reporting anybody to immigration. However, bankruptcy is a public record, so you should always check with a qualified immigration attorney and have him or her work with your bankruptcy attorney.
Additionally, if you are accused of bankruptcy fraud, you could have immigration problems, as many immigration applications require showings of good moral character (even though many fraud accusations come from innocent mistakes made by bankruptcy debtors).
So long as you are forthright with your bankruptcy attorney, and honest with your finances, you shouldn’t have a problem here, but your bankruptcy attorney should take special care to make sure there’s nothing in your background that could give rise to a fraud claim.