As with many of the legalities of life this question is one which requires an in-depth explanation in an effort to provide a complete answer. Simply put, the answer to whether or not bankruptcy can affect your immigration status: The answer is a resounding No.
The bankruptcy process of the United States was created to give people a second chance. It allows for the fact that each of us is human, and we make mistakes. Sometimes those mistakes are financial in nature, but under US bankruptcy law you’re still entitled to a second chance. An important note here is that immigrants to the United States are entitled to the exact same rights and protection offered by bankruptcy as enjoyed by a citizen of the United States.
The Law
Contrary to what you might believe there is no law which states you can’t apply for a visa, Green Card, or apply for citizenship of the United States if you’ve been forced to declare bankruptcy. This is because bankruptcy can happen to anyone at any stage of their life, both US citizens and non-citizens alike. The fact does remain that declaring bankruptcy may not provide you with additional challenges in becoming a resident or citizen of the United States.
Character Assessment
When your application is reviewed by the United States Citizenship and Immigration Services (USCIS), one of the key factors they examine is whether or not you are of a “good moral character”. Although this might sound somewhat vague, it is a requirement for you to be granted residency or citizenship. What it means in plain English is whether or not you’re a risk i.e. you have a criminal background, and you’re likely to commit further crimes in the United States. Most bankruptcies are filed because of reckless spending and poor financial management. Other less scrupulous people have used the bankruptcy process to avoid paying debts, such as alimony. If you had filed for bankruptcy does not mean that you will have a negative character assessment. It will not create an impediment when you file for bankruptcy.
Being Deported
As an immigrant to the United States the last thing you want is to be deported back to your home country. You came here to start a new life, and to enjoy the same freedoms that all American citizens enjoy. Deportation is only a risk if you have committed financial fraud as part of your bankruptcy filing. This includes filing false documents, bribery, concealing assets, or filing multiple times in different states of the union. Being found guilty of bankruptcy fraud can result in you being deported several years after you became a US citizen. There have been several high-profile examples of this in the last few years alone.
If you are deported from the United States for bankruptcy fraud, or similar financial crimes, you can be barred from reentering the country for several years. In cases of major criminal activity, you will be prevented from reentering the United States for the rest of your life. Deportations are the exception rather than the rule, but we wanted to provide you with complete information.
Financial Crimes
There are other financial crimes which can cause your application for citizenship, or residency, to be declined. These include crimes which are categorized as “moral turpitude”, which is a fancy term to cover everything from using stolen credit cards, bouncing checks, to tax fraud, or other crimes which demonstrate you have an established pattern of criminal behavior.
Sponsorship
In the same way that declaring bankruptcy shouldn’t impact your ability to become a citizen or resident of the United States, it also doesn’t prevent you from sponsoring a family member in their efforts to live here.
If you have further concerns, please seek the guidance of a trained immigration attorney, but in the vast majority of cases declaring bankruptcy will have absolutely no impact on your immigration status.