echnically, citizenship, immigration status, lack of documentation, or even the lack of a social security number does not determine a person’s eligibility to file personal bankruptcy, or for them to seek bankruptcy protection for their company. The Bankruptcy Code specifically defines who can file bankruptcy, i.e., who can be a “debtor.” Section 109(a) of the Bankruptcy Code does not prohibit a person without a social security number, or without proper documentation of citizenship or legal status, from being a “debtor.” See, 11 U.S.C. § 109(a). (“[O]nly a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under [the Bankruptcy Code].”). See, also, In re Merlo, 265 B.R. 502, 503 (Bankr. S.D. Fla. 2001) (“The Bankruptcy Code does not exclude debtors from bankruptcy protection simply because they have no social security number. Section 109 of the Bankruptcy Code does not require a social security number as a condition of being a debtor.”). To this point, Bankruptcy Official Form 121, “Statement About Your Social Security Numbers,” even includes an option for debtors who do not have a social security number.
However, while persons with concerns about the status of their citizenship, immigration, documentation, and/or their social security number can file a bankruptcy, there are a number of important issues that should be carefully considered with the assistance of counsel before actually filing bankruptcy. This is especially true in the current political climate where non-citizens are under increased scrutiny in many aspects of their lives, as that increased scrutiny should be considered to extend to the scrutiny of their bankruptcy cases.
The first consideration concerns their individual social security number: (a) has that person used a social security number that was “invented” or “borrowed” from another person; and, if so (b) has that social security number been used to incur debt that will be administered through bankruptcy. These questions must be carefully considered because any social security number used by the potential debtor must be disclosed in Bankruptcy Official Form 101, as failure to make that disclosure may lead to serious charges. See, United States v. Grant, 850 F.3d 209 (5th Cir. 2017) (“Defendant convicted of bankruptcy fraud under counts of indictment charging her with falsely representing on Bankruptcy Form that she had only one Social Security number.”). See, also, In re Perez, 411 B.R. 386 (D. Colo. 2009) (Reversing and remanding Bankruptcy Court Order declining to approve stipulation of dismissal, based upon lack of merit after extensive discovery, between Chapter 7 debtor and the United States Trustee of United States Trustee’s adversary complaint seeking denial of discharge based on the debtor’s use of a false social security number in incurring pre-petition debts). Further, it is unclear what other issues, beyond bankruptcy law, may arise related to that person’s use of a social security number or tax identification number that was not issued to them, including identity fraud. See, Flores-Figueroa v. United States, 556 U.S. 646 (2009) (Holding that in order to convict the defendant of aggravated identity theft, the government must prove that defendant knew that “means of identification” he or she unlawfully transferred, possessed, or used did, in fact, belong to another person). If a person has, in fact, used either an “invented” or a “borrowed” social security number from another person, an affected creditor can certainly commence an adversary proceeding in that person’s bankruptcy case alleging misrepresentation by that person in connection with the debt in question. While defenses to such allegations may exist, an adversary proceeding would greatly increase the cost of the bankruptcy case and exposure of the debtor to official scrutiny.
The next consideration should be whether the person has had any prior contact with immigration or law enforcement authorities regarding their documentation or citizenship. While filing for protection under the Bankruptcy Code does not necessarily impact a person’s application for citizenship (a person’s overall financial condition, i.e., the totality of the circumstances, can certainly impact their application), relevant authorities may be monitoring bankruptcy filings in addition to other public records of civil or criminal actions. In the context of bankruptcy, the Office of the United States Trustee, which is an arm of the United States Department of Justice, has an obligation to investigate and possibly make a referral to the United States Attorney of any issues are raised regarding a debtor’s citizenship, immigration status, lack of documentation.
The next consideration is documentation. Routinely debtors must provide documentation deemed sufficient for their bankruptcy case to proceed, and persons considering bankruptcy should be aware that documentation or lack thereof can become an impediment to completion of their bankruptcy case. A person may have documentation that evidences a short-term business or visitor’s visa, or deeming that person a Legal Permanent Resident (LPR), or have no documentation at all. In any instance, proof of residency must at the very least be available to the person in advance of filing a bankruptcy case. Further, a person who is not eligible to receive a social security number may obtain an individual taxpayer identification number (“ITIN”) from the Internal Revenue Service without regard to immigration status. Obtaining documentation of an ITIN may make the bankruptcy process more streamlined rather than the person proceeding without any social security number or ITIN. Further, while the Bankruptcy Code does not explicitly require government-issued photo identification to proceed through a bankruptcy case, it is the policy of the Office of the United States Trustee for debtors to provide acceptable identification, and any person filing a bankruptcy petition should be aware that some proof of identification will likely be required of them at some point in the bankruptcy process, specifically at the 341(s) meeting of creditors. Other documentation issues could affect that person, including insufficient financial documents, such as proof of income, proof of title to the property in their home company, proof of insurance, and other documentation routinely requested of debtors in bankruptcy.
The next consideration is bankruptcy exemptions, which are generally available to debtors under state law and federal law. Certain state law exemptions may not be available to persons who are not citizens. However, debtors should be able to claim federal exemptions even if their state law exemptions are denied. Prior to filing a bankruptcy case, the availability of exemptions, or potential lack thereof, should be factored into the person’s overall consideration of the potential risks and benefits of filing bankruptcy.
In summary, persons with concerns about the status of their citizenship, immigration, documentation, and/or their social security or tax identification numbers should carefully consult with both an experienced bankruptcy attorney and an experienced immigration attorney before making a decision to file bankruptcy, or to take any other action to address financial issues.
About Middlebrooks Shapiro
New Jersey Attorney Melinda D. Middlebrooks and Attorney Joseph M. Shapiro have over 30 years of bankruptcy law experience. From our office in Springfield, NJ, we help clients with the most basic or complex personal and business bankruptcy cases by leading them through the legal process of numerous practice areas.
Call 973-218-6877 to speak with the experienced bankruptcy attorneys at Middlebrooks Shapiro. We’ll ensure you get the perspective you need to understand the full picture and the right guidance to have a successful bankruptcy, rebuild your credit, and move forward with your new debt-free life.