Can Non-Citizens File Bankruptcy?

There is a lot of discussion now about whether people from foreign countries who live and work in the United States without seeking citizenship should be entitled to the same rights as citizens. Since these non-citizens are consumers who almost certainly will accumulate debt, they may wonder if they can seek relief from their debts under the bankruptcy laws, or whether that right is specifically limited to people who are citizens. Here, we will examine the question, can non-citizens file bankruptcy?

Can Non-Citizens File Bankruptcy?

Actually, the bankruptcy laws allow non-citizens to file. The Bankruptcy Code defines “a debtor” as “a person that resides or has a domicile, place of business, or property in the United States,” without requiring that person be a citizen. Therefore, the right to seek relief under the bankruptcy laws is available to both citizens and non-citizens, so long as they can prove they make their home here.

A person is “domiciled” when he can prove that he has a physical presence in one location and considers it to be his primary home.   Any person, citizen or not, must be able to show that he/she has resided (been domiciled) for one hundred eighty days before filing at a specific address located in the area served by the particular court he files in. If challenged, evidence of domicile may be established by owning real estate, having a driver’s license, having a bank account or other financial account, or having children enrolled in a local school.

The Bankruptcy Code itself does not require a debtor to have a social security number. However, the bankruptcy forms themselves ask for it. Further, when the debtor appears at the required meeting of creditors, the trustee will request to see it as proof of identity to verify that the person who answers the trustee’s questions under oath is the same person who prepared and filed the bankruptcy papers. If the non-citizen filing bankruptcy has a legal Social Security number issued by the Social Security Administration, he should definitely use it. If not, the person should get an Individual Taxpayer Identification Number (“ITIN”) from the IRS. He will also need a photo ID, so if he does not have a driver’s license, he should apply for a state identification card (in Ohio, it’s issued by the Department of Motor Vehicles for non-drivers). It is essential that the debtor bring his identification cards to the meeting with the trustee so that it can be matched with the information on the bankruptcy papers.

A debtor also is required to provide his tax returns for the three years preceding his bankruptcy filing, or to attest under oath that he is not obligated to file a return for an acceptable reason. Failure of a non-citizen to file tax returns can impede his ability to file bankruptcy, as well as his immigration status.

Up to this point, I have been talking about requirements for all people, citizens or not, wishing to file bankruptcy. However, there are a couple issues that apply to non-citizens in particular, such as whether the non-citizen debtor gets the full benefits of filing a bankruptcy.

There are two reasons why any debtor files a bankruptcy:

  1. To protect the debtor’s assets from his creditors through exemptions, and
  2. To receive a discharge, or wiping out, of his indebtedness to his existing creditors.


Exemptions are amounts allowed under either state or federal law, protecting a debtor’s assets from the reach of creditors. Some states follow federal exemption laws, while others, such as Ohio, have “opted out of” the federal exemptions and use state law to determine the amount of protection it affords its debtors. Exemptions protect up to a monetary limit the debtor’s right to possess various types of personal and real property. If the value of the property owned by the debtor exceeds the amount of protection offered under state law, then that portion is subject to the reach of the trustee on behalf of the creditors.

The problem for non-citizen bankruptcy filers arises when the bankruptcy court is interpreting a state’s exemption statutes in a way that could disqualify them, such as Florida’s homestead exemption. Florida has a very generous homestead exemption, but in order to qualify for it, a debtor must be able to show that he is a permanent resident of the state with the intent to make the real estate his permanent domicile. In order to show that he is a permanent Florida resident, the bankruptcy court has determined that a non-citizen debtor must have received permanent residence status, i.e., a “green card”, before he files the bankruptcy. If he has not been granted permanent status at the time he files, he cannot use the homestead exemption, and the equity in his house can be claimed by the trustee to be distributed to his creditors.

While the Ohio exemption statute does not have a permanent residency requirement like Florida does, there have been instances where non-citizens have purchased real estate using a citizen’s name in order to qualify for a mortgage loan. Therefore, the non-citizen is residing in a home and paying a mortgage although another person is named as the “official” owner. The problem would arise if the other person files a bankruptcy. That other person cannot truthfully claim the house as his residence, and therefore cannot take the rather generous Ohio exemption. The house would then become an asset of the bankruptcy estate, and the non-citizen residing in it would lose any rights to it.


The problem here arises if the non-citizen has debts that he incurred in another country. The issue is whether a discharge in a U.S. bankruptcy court would be effective to discharge them.

It is fairly safe to say that so long as the debtor can prove that the creditor in the foreign country received proper notice of the bankruptcy filing, the creditor will no longer be able to try to collect on that debt in the United States when the debtor gets his discharge.

However, the bigger problem is that under the law of the foreign country, a debt incurred there is not necessarily discharged by the actions of a U.S. bankruptcy court. If that is the case, then the foreign creditor can continue to try to collect the debt under the laws of that country, probably against any assets, such as real estate or financial accounts, that the debtor may still have there, and perhaps even in other countries outside the United States. It would depend upon whether the U.S. and that foreign country have an agreement to enforce each other’s laws, including those in the area of personal bankruptcies. This is a subject that a non-citizen potential bankruptcy filer needs to discuss in detail with his U.S. bankruptcy attorney.

One more important issue for the non-citizen filer is whether a bankruptcy could affect a citizenship application, or even cause the non-citizen to be deported. In writing this section of the Blog, I am admitting that I am not and never have been an immigration attorney, and that I am bringing up this subject to advise non-citizens who may be thinking about bankruptcy that it would be in their best interest to consult with someone who specializes an immigration law before filing.

There are no laws that make it a deportable offense to file bankruptcy. Bankruptcy is a legally acceptable way for dealing with your debts. However, bear in mind that bankruptcy filings are public records. A bankruptcy filing could bring you to the attention of immigration authorities. While you cannot be deported for filing a bankruptcy, you could hurt your immigration status if you are using a fake social security number, or if you have failed to file a required federal, state, or local tax return. And certainly, if you disclose in your bankruptcy paperwork that you committed a crime of “moral turpitude”, like writing bad checks, making fraudulent transfers of assets, or providing false information to the federal government, you could find yourself on the wrong side of immigration law.

Therefore, while a non-citizen has every right to file and get protection from his creditors, keep in mind that there are a few precautions you must consider before you do so. Certainly, consult with a competent bankruptcy attorney as well as an immigration attorney to make sure you won’t be making your problems worse.