The answer is simple: Yes.
The Bankruptcy Code does not limit who may file based on citizenship status. It states that “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 simply defined to include an “individual” (as well as a “partnership and corporation”). The point is that there is no requirement about needing to be a citizen, or even to being legally in the country. So everyone, citizen or non-citizens, legal or illegal, can file bankruptcy.
But the person must meet one of the above categories of who may be a “debtor.”
One often used category is to have a “domicile,” meaning simply being physically present in one location with the intention of making that place the person’s present home. Generally the longer the 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 itself likely be sufficient to qualify as a debtor.
Any other requirements? The bankruptcy filing documents ask for a Social Security number, but there is nothing in the Bankruptcy Code which requires that. 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. The “IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs.”
Anything else? In most places, the bankruptcy filer will also need to show proof of identity at the so-called Meeting of Creditors, to allow the bankruptcy to verify that the person present there answering the questions under oath is a real person and the one who filed the bankruptcy documents. This aims 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 it that’s available, or some other paper received from the government or from an employer showing the number; plus 2) some form of photo identification—such as a driver’s license or passport.
So is that it? Well, yes, with these conditions met the non-citizen can file for bankruptcy. But two big questions remain that just can’t get swept under the rug—
1. Would a non-citizen potentially 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 address have to these important questions in my next two blogs.