By Alma Rojas | Manager of Service Delivery | The Financial Clinic
The ending of Deferred Action for Childhood Arrivals (DACA), and the uptick in deportation of undocumented immigrants, has resulted in many individuals and families with immigrant backgrounds (regardless of status) experiencing a lot of uncertainty and stress which can take a toll on a person’s physical and mental health, as well as their long term financial well-being.
Through the Clinic’s experience working with individuals and families in vulnerable situations, we have learned that creating an action plan in advance helps alleviate some of that stress because it empowers customers to make their own choices within circumstances that are not entirely in their control. Pre-crisis financial planning can also lessen the economic instability that may result from worst case scenarios like being detained or deported.
It may be helpful to think about the financial plan in three stages – prep, maintenance, and implementation. Although every plan should be tailored to an individual’s and/or family’s specific situation, there are some common components.
At this point it is important to organize and secure important household, financial, and emergency contact information. These documents can help you provide legal proof of identity and ownership, as well as a history of financial activity. Good record-keeping can also help you plan next steps. For example, you may have to obtain clear and legible copies of recent documents, decide where to store your information; who to share your information with; assign authorized users, joint-account holders or beneficiaries to accounts; or draw up paperwork to grant power of attorney, etc. You will also want to make sure that others understand what to do if you are detained or deported.
Take this time to track your household’s monthly expenses. This can help you determine how much you can set aside to save for potential legal expenses and for the costs of passports and/or moving expenses, etc. In families where the primary breadwinner is at high risk of deportation/detention, this step can help determine how much to save in order to weather the loss of income.
The prep stage is also a good time to reevaluate current financial products, like bank accounts and credit cards, to make sure they are the most convenient and low-cost product available. Consider opening an account that has no or low-cost international fees in case you need to withdraw money or access credit while in another country. Also consider setting up automatic bill-pay for the most urgent bills (like utilities or cell phones), but be mindful of any low-balance and/or overdraft fees. You may also want to set up a separate savings account with auto-deposit or auto-transfers to save for emergency or legal expenses.
While the prep stage is the most extensive, the maintenance stage is just as critical. In the maintenance stage, it is important to keep all contact (school, doctor, lawyer, etc) and account information obtained in the prep stage up to date. It’s also important to keep saving for the goals you created in the prep stage, and to build and maintain a good credit score that will give you access to loan products that you may need in the future. If you are working, you should also make sure that when you file taxes you get all the applicable credits you are eligible for, this will allow you to use part of your refund to fund your emergency savings and other goals.
In the case you are detained, the financial emergency plans you created can help you take steps to secure and protect your assets quickly, thereby giving you one less thing to worry about. You will want to contact family members and immigration lawyers first. You may also want to contact your employer and/or creditors to explain your situation (giving only as much information as you are comfortable and/or is advised by your legal counsel). If your action plan calls for the closing of accounts, you will want to do that before you are charged late fees for non-payments. If you have a joint or authorized user, and you want to keep the account open, they should be notified to start making payments. You will also want to make sure that your family has access to your assets, which if you gave them access as a joint account holder, authorized user, or if you granted them power of attorney, they should.
In the case that you are deported, you should still be able to access your assets from outside of the country. The money you have saved in your bank accounts remains yours, but you will need to determine if you would like to keep the account open or if you would like to transfer the money into a new account. You will also need to switch or close any open accounts with balances (like credit cards or loans) or recurring payments (like cell phones, rent, utilities, etc). Any debts you have will remain your obligation, regardless of whether you are in the country or not. You want to prevent the debts from being turned into collection accounts, especially if there are joint account holders that could have their assets frozen or garnished. If your joint-account holder gets harassed by debt collectors, remind them they have rights.
If you have family and you are deported, you will also need to decide if your family will move out of the country or stay in the United States. If they will relocate too, the savings you have will hopefully lower the financial burden of moving internationally.
Creating a financial emergency plan can be daunting, but in many cases, it is more stressful to not have one. As the AppleSeed network notes, “deportation can be a cataclysm for families and communities, destroying decades of hard-earned assets and rupturing family development. But with advanced planning, immigrant families can prevent an enormous amount of this damage.”
We hope that you found this post helpful and that it gave you some brainstorming ideas. For help in creating a financial emergency plan, you can also reach out to a financial coach or an organization that offers resources and supports to immigrants.
To see examples of emergency plans, please see:
- ILRC Family Preparedness Plan
- Mission Asset Fund’s Financial Emergency Action Plan for Immigrants
- APPLESEED Network’s Protecting Assets and Child Custody in the Face of Deportation: A Guide for Practitioners Assisting Immigrant Families
You can also use the following Change Machine tools to help you brainstorm and create your own plan:
- Monthly Income and Expenses
- Undocumented? File Taxes Without Fear
- 7 Healthy Things To Do With Your Tax Refund
- Best Practices for Building Credit Without a Social Security Number
- Record Keeping
- Action Plan
- Get Banked In America
- Mapping Options
- Know Your Rights When Debt Collectors Call
- 5 Steps To My Goal
Disclosure: Please note that this information is provided for informational purposes. This information is not intended as legal advice. Please seek the assistance of an attorney for questions and concerns regarding your specific case and before making any decisions.
Did you know?:
- “In 2015, immigrants accounted for 13.9% of the overall U.S. population”
- “About a quarter of immigrants held undocumented status”
- “During March 2018, court records showed that 43% of immigrants in cases brought by the Department of Homeland Security had arrived in the U.S two or more years ago”
- Families of deportees, particularly those who are low-income and single breadwinner households, experience a drastic drop in income (up to 90% in some cases), which results in housing, food, and other types of instability”