Can Non-Citizens, “Undocumented Workers,” and “Illegal Aliens” File ...


Immigration 300w, 768w, 640w, 40w, 80w, 160w, 320w" sizes="(max-width: 150px) 100vw, 150px" />Quite obviously, both immigration and the status of “undocumented” or “illegal” aliens currently in the United States is a hot topic now, and surely will be for a long time.   One issue that shows up in Bankruptcy Courts, albeit rarely, is whether non-citizens, whatever their official status, have access to Bankruptcy Courts in the United States.  The first place to start is Section 109 of the Bankruptcy Code (11 U.S.C. §109), aptly titled “Who May Be a Debtor.”  In short, there is no requirement in §109 that an individual be a citizen, or even lawfully in this country.  For obvious reasons, people who are in this country unlawfully are not likely to file Bankruptcy petitions.  However, it is not uncommon for green card holders to file for Bankruptcy protection.  As with any debtor in Bankruptcy, the person will have to provide the appropriate identification and meet all other requirements of the Bankruptcy Code.

However, another important issue has arisen in some cases – exemptions.  The availability of exemptions pursuant to 11 U.S.C. §522 is generally based on residency.  Courts in Florida have addressed this issue in cases involving non-citizens.  For example, in In re Fodor, 339 B.R. 519 (Bankr. M.D. Fla. 2006), the Court stated:

In order to qualify for the Florida homestead exemption, a debtor must be a permanent resident of the state and intend to make the property in question his permanent residence. An alien can satisfy this residency requirement only if he has obtained permanent resident status or a “green card” as of the petition date.

Because the debtor in that case did not yet have a green card when his case was filed (he would receive it three months later), he could not satisfy the residency requirement to claim a homestead exemption under Florida law.   In another Florida case, In re Levy, 221 B.R. 559 (Bankr. S.D. Fla. 1998), the Trustee objected to exemptions based on the debtor’s residency status.

The Debtor’s immigration status is relevant to determine eligibility for the claimed exemptions. As previously stated, the Debtor and his wife are Canadian citizens and were Canadian citizens when the Debtor filed his bankruptcy petition.  At all relevant times, the Debtor’s wife’s status in the United States is that of an undocumented alien…

Thus, the question remains whether the Debtor may avail himself of bankruptcy relief without having to subject his most valuable asset to the claims of all his creditors. Or, as Chief Judge Cristol framed the issue, “May a Debtor eat smorgasbord or must the Debtor coming to the bankruptcy table eat the entire meal.” In re Planas, 199 B.R. 211, 212 (Bankr.S.D.Fla.1996)

The Court finds it unnecessary to probe the depths of the tenancy by the entireties issue in this case for one simple reason: the Debtor may not use any state exemptions afforded by Florida law because at all relevant time periods the Debtor resided in the United States pursuant to a temporary visa. This fact prevents the Debtor from establishing domicile within the state which in turn precludes the Debtor from availing himself of the state exemptions.

These are just two examples from a state that has a relatively high percentage of non-citizen residents and extremely favorable exemptions, but they do illustrate issues that arise in these cases.  Bankruptcy lawyers will carefully review the facts, state laws, and Court decisions in the district and circuit before filing these cases.

Scott Riddle’s practice focuses on bankruptcy and litigation. Scott has represented Chapter 7 and 11 debtors, creditors, creditor committees, trustees, court-appointed receivers and other interested parties in bankruptcy cases and bankruptcy litigation.  For more information, click here