Can Non-Citizens File Bankruptcy?

The answer is simple: Yes.

The Bankruptcy Code does not limit who may file based on citizenship status. It states, “Only a person that resides or has a domicile, a place of business, or property in the United States . . . may be a debtor . . ..” The “person” is defined to include an “individual” (as well as a “partnership and corporation”). There is no requirement to prove citizenship or legal entry into the country. So everyone, citizen or non-citizens, legal or illegal, can file bankruptcy.

But the person must meet one of the above categories to be a “debtor.”

One commonly used category is to have a “domicile,” meaning being physically present in one location with the intention of making that place one’s home. The longer a person has been in one place and the more he or she has put down roots, such as getting a state drivers license, the easier to show intent to establish a domicile.

Having any meaningful amount of property, such as bank or other financial accounts, or a vehicle, would likely be sufficient to qualify as a debtor.

The bankruptcy filing documents ask for a Social Security number, but there is nothing in the Bankruptcy Code that requires one. If the person filing bankruptcy has a legal Social Security number appropriately issued by the Social Security Administration, it should be used. Otherwise, the person should get an Individual Taxpayer Identification Number (“ITIN”) from the IRS, and use that.

In most places, the bankruptcy filer will also need to show proof of identity at the meeting of creditors to verify that the person answering the questions under oath is the one who filed the bankruptcy documents. This serves to prevent identity scams. Proof of identity generally requires two things: 1) a document showing your SSN or ITIN—such as the original Social Security card or a document from the government or an employer that has the number. 2) Some form of photo identification—such as a driver’s license or passport.

If you meet these conditions, even a non-citizen can file for bankruptcy. But two big questions remain:

1. Would a non-citizen have problems qualifying for any of the benefits of bankruptcy, such as getting a “discharge” (legal write-off) of the debts, or claiming property exemptions in order to keep the property?

2. Does filing the bankruptcy harm a legal non-citizen’s efforts to become a citizen, or does it increase an illegal immigrant’s risk of deportation?

Sorry for keeping you in suspense, but I’ve covered enough for one day and so l’ll have to address these important questions in my next two blogs.

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