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Immigrants And Bankruptcyby Kathleen Lord-BlackHave you ever had an immigration client, with a very good case, who suddenly informs you he or she has decided to abandon the case and return to his or her home country? Clients such as these may not want to discuss the reasons behind their decision to give up and leave, but the chances are that the turn-down in the economy, and culturally-driven feelings of shame and disgrace, may be at the root of the client’s decision to throw away the chance to remain in the U.S., become a U.S. citizen, and to sponsor family members. The concepts of insolvency and bankruptcy have been known for many centuries, and in almost all the world’s cultures. Bankruptcy systems around the globe reflect the legal, historical, political, and cultural values of the countries that have developed them; and are themselves reflected in the attitudes and actions of immigrants who find they can no longer pay their bills. While many countries and regions have developed bankruptcy laws that more or less mirror those of the United States, nearly all foreign countries have far less forgiving cultural views toward debt and debt forgiveness than does the United States. In some parts of the world, declaring bankruptcy is the ultimate disgrace, and can lead to public humiliation and even incarceration. In other parts of the world, there simply is no personal bankruptcy system, and little in the way of business reorganization, either. To the Chinese, for instance, it is a shameful thing not pay one’s debts, a disgrace that would follow one for the rest of his or her life. Culturally, like the Japanese, the Chinese are taught to value relationships over money and self-promotion. In Hong Kong, however, filing for bankruptcy does not carry the stigma it does in many other Asian countries, in part because Hong Kong’s community is internationally-oriented and transient. But among the traditional Chinese people who live in Hong Kong and other countries, the stigma is still present. As such, bankruptcies from Chinese owned business in the U.S. are rare. In general, both mainland Chinese and Hong Kong Chinese immigrants would rather avoid courts, preferring to work things out on their own, than to make public their shame. In Japan, the stigma of bankruptcy is more deeply-rooted than in virtually anywhere else in the world. Executives of failed companies in Japan consider financial failure to be the ultimate societal disgrace, for which suicide is a common way out. As consumer debt levels rise in Japan, the insolvency rate (and suicide rate) also increase. Immigration attorneys representing clients from Japan sometimes become nervous about the wellbeing of the Japanese clients they suspect are having financial troubles, especially when they have not heard from them in a long time. Immigration counsel may take a proactive approach in dealing with clients they suspect of insolvency. Counsel may want to provide basic information about the American bankruptcy system, emphasizing that it is not punitive or personal. Before a bankruptcy case can be filed, the immigrant client must decide whether bankruptcy is, in fact, the best vehicle for dealing with the problems that he or she faces. Because immigration counsel already has an established relationship with the immigrant client, counsel can informally discuss possible avenues of handling financial problems, other than bankruptcy, with the client. Because few immigration attorneys feel competent to give legal advice on areas of law other than immigration, the discussion should lead to a referral to competent counsel in the areas of law brought up in the informal discussion. It is never possible to decide how to counsel or refer the client without a thorough knowledge of the relevant facts. The immigrant client must understand that keeping important information from counsel may worsen his or her financial position. For instance, a client who keeps secret essential information regarding his or property runs the risk that property such as a tax refund may be lost in bankruptcy, major debts will not be discharged, and real property might be incorrectly valued and, as a result, lost to creditors. As immigrants build their lives in the U.S., they are exposed to more and more credit, easy to get but laden with penalties and fees they do not expect. (One of my Middle-Eastern clients had been paying his mortgage with cash advances on his credit card.) Long-held and negative cultural views of bankruptcy and insolvency may make your client reluctant to discuss financial issues with you or with bankruptcy counsel, but a proactive discussion regarding the relevant facts may save both the client’s immigration case and preserve his or her financial freedom.
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