Any legal resident of the United States may file for bankruptcy.
There is no requirement that you be a U.S. citizen, or even have a green card—anyone who is living in America legally can file for bankruptcy in this country.
In addition, there are no laws that indicate filing for bankruptcy will prevent the United States Citizenship and Immigration Services (USCIS) from approving your green card, visa or application for citizenship. This does not mean that filing for bankruptcy cannot affect your immigration status at all, however.
The standard of ‘good moral character’
To become a legal, permanent resident or citizen of the United States, you must prove that you have “good moral character,” even though there is no clear rule as to what constitutes good moral character for the purposes of a citizenship application. The vague nature of this requirement allows case workers to look at the overall picture of a potential immigrant’s life and use their own judgment as to whether that person could cause trouble in the United States.
There is a chance that a bankruptcy could be used as evidence of “bad character,” if you found yourself in dire financial straits because you purposefully racked up thousands of dollars in debt before filing for bankruptcy. Common examples of major expenses include destination weddings, manipulating bankruptcy laws to avoid paying alimony (despite having sufficient income) and generally funding an overly lavish lifestyle.
However, bankruptcy that was filed for most other reasons is not likely to reflect poorly on your immigration status and will usually not be taken into consideration on your citizenship application. Few bankruptcies, after all, are the result of bad moral character or deliberate overspending. Rather, they tend to arise due to medical bills, job loss or other circumstances outside an individual’s control.
Bankruptcy crimes could affect your immigration status
Typically, if a person’s immigration case is harmed due to bankruptcy, it is because he or she has committed some form of bankruptcy crime, such as:
Providing false financial information and statements to the bankruptcy court
Lying under oath about financial matters
Omitting important assets or information from your bankruptcy documents
Bankruptcy crimes are rare, and if you file with the assistance of an experienced bankruptcy attorney, you will not commit one. There is no crime in simply filing for bankruptcy because you are overburdened with debt, which means that will not lead to a denial of an immigration petition.
Occasionally, courts perform bankruptcy audits to determine the legitimacy of the filing, but these audits only affect about one in every 250 people who file.