How could a past business bankruptcy affect my EB-5 application?

They should not be a factor if you can establish your funding was earned with lawfully sourced funds.

A past business bankruptcy can affect your EB-5 application, but the impact will depend on several factors.

1. Lawful Source of Funds (LSF) Requirement
The EB-5 program requires that all investment funds come from a lawful source. While past bankruptcies are not disqualifying in themselves, they can raise questions about the legitimacy of the capital you're using for your investment. It’s important to demonstrate clearly that your current funds were obtained legally and are not tied to any financial issues from the past.

2. Disclosure and Documentation
If you have had previous bankruptcies, you will likely need to disclose and provide documentation regarding those bankruptcies. The immigration authorities typically require full transparency on financial and legal matters involving the investor, including documentation of court proceedings and any judgments related to your bankruptcies. This documentation is necessary to show that your current funds are unconnected to those financial issues.

3. Potential for Increased Scrutiny
Although bankruptcy doesn't automatically lead to a denial, it can result in more scrutiny. The authorities might issue requests for more evidence if they have concerns or if there are gaps in your explanation of how your funds were acquired. In such cases, you'll need to clearly explain the circumstances of the bankruptcies and how your current funds are separate from any prior financial difficulties.

4. Focus on Ongoing Businesses
If your current business is financially stable and you can demonstrate that the funds for your EB-5 investment come from this ongoing business, past bankruptcies may be considered minor. However, if any of the funds come from the sale of assets from bankrupt businesses, you will need to provide clear documentation showing the lawful source of those funds, including relevant court and tax records.

5. Roadblock or Bump in the Road?
A past bankruptcy, by itself, may not block your application. However, it could lead to delays or additional scrutiny if it impacts your ability to prove the lawful source of your funds. If you can provide clear, documented evidence showing your investment funds are unrelated to the bankruptcy, it might only be a minor hurdle.

6. Filing Information on All Bankrupt Businesses
You will likely need to disclose information about all bankruptcies, especially if any of the businesses were involved in generating the funds for your EB-5 investment. However, if your current business is thriving and the funds for the investment come from that business, the focus will be on your present financial situation, though past bankruptcies may still be reviewed for transparency.

In summary, while past bankruptcies can lead to increased scrutiny and require more documentation, they do not necessarily disqualify you from the EB-5 program. The key is to provide complete and clear documentation about your lawful source of funds and explain any past financial issues in a transparent manner.

The question of your bankruptcy’s, provided no fraud or other such concerns, should not be an issue if you can show your money is lawfully earned.