Can I File For Bankruptcy If I Am a Sponsor For an Immigrant?
I had an interesting case the other day. He is a sponsor for someone in immigration, and he also needs to file for bankruptcy. The gentleman was concerned the immigration proceeding was going to hurt the bankruptcy, or the bankruptcy would hurt the immigration process.
When you sponsor someone in their immigration process and you submit form I-864 you are saying your income will be counted to make sure the person in the immigration process does not become a public charge. If you sign that form the United States government can consider your income as available for the support of the intending immigrant.
When you file for bankruptcy you are saying your debts are more than your income and you do not have the ability to pay all of your debts. You either file a Chapter 7 bankruptcy which states you have little or no ability to pay your debts, or you file a Chapter 13 bankruptcy which says you do have the ability to pay some of your debts.
Regardless of which chapter of the bankruptcy code you file under, Chapter 7 or Chapter 13, there is no inherent conflict between Immigration form I-864 and the filing of a bankruptcy petition. The standard on Immigration form I-864 is a gross income standard. That means the immigration authorities look at your income before anything comes out of your check for payroll taxes, social security, or any other payroll deductions. But when you file for bankruptcy you file a schedule of average monthly income and a schedule of average monthly expenses. As far as which Chapter of the bankruptcy code you file under, it matters whether you have $50 left at the end of the month or $550 left at the end of the month, for example. But that is a disposable income standard.
The takeaway is the Immigration form I-864 standard is a gross income standard whereas the bankruptcy schedules of income and expenses are more of a disposable income standard. So really the two processes are measuring two different things. But you still want to make sure if you say you will assist an immigrant financially you have the ability to render assistance if called upon to do so. And you want to make sure the actual assistance you render to the immigrant is listed in your bankruptcy on your schedule of income and schedule of expenses.
The above information is a general overview and is not intended to be used as legal advice. If you are considering filing for bankruptcy, the best thing to do is call our office at 248-557-3645 and schedule a free consultation so you can receive advice which is tailored to your specific circumstances.
By: Michael Benkstein, Esq.
Managing Attorney, Bankruptcy Department
The Law Offices of Joumana Kayrouz, PLLC
1000 Town Center
Southfield, MI 48075