When an H‑1B employer goes bankrupt, your right to stay and work in the United States 🇺🇸 depends on two things: whether you are still actually employed and whether your H‑1B petition was approved. Bankruptcy by itself does not cancel your status, but job loss or company shutdown does.
If the company keeps operating under Chapter 11 and still pays you, you can usually keep working. If it shuts down or stops paying you, your H‑1B status is no longer valid and a short clock starts for you to act.
According to analysis by VisaVerge.com, many workers wrongly think the H‑1B ends the day a company files for bankruptcy. In reality, the key issue is continued, paid employment in your H‑1B role, not the financial health of the company on paper.
The steps below walk through what happens at each stage, how much time you likely have, and what actions you should take.
Step 1: Confirm your real employment situation
Your first task is to find out if you are still employed in a real, legal sense. Ask HR or the bankruptcy contact:
- Is the company still operating or is it being dissolved?
- Are you still on payroll, with wages actually being paid?
- Has your position been eliminated or are you “on the list” to be laid off?
If your approved H‑1B petition is active and you are still working and getting paid, you are normally still in valid H‑1B status, even if the employer is under Chapter 11. Keep these documents handy:
- Recent pay stubs
- Bank statements showing salary deposits
- Your H‑1B approval notice (Form I‑797)
If the company stops operations, stops paying you, or officially lays you off, your H‑1B status ends with that employment. From that day, you move into a limited grace period.
If your H‑1B petition was never filed (for example, you were selected in the lottery but the employer never sent in the paperwork), the process simply ends. A selection or registration alone does not give you any status. You cannot “transfer” that H‑1B registration to another company; a new employer must try again in a future lottery.
Step 2: Work out your 60‑day grace period
When you lose your H‑1B job because the employer goes bankrupt or closes, U.S. rules normally give up to 60 days or until the end date on your latest I‑94, whichever is shorter. During this time, you may stay in the United States while you take action.
During the grace period, you should:
- Look for a new employer ready to file a new H‑1B petition
- Decide if you want to change to another status, such as student
- Prepare to leave the country if no option works
Important points:
- You do not keep working for the old company once they stop paying you, even if you are still inside the 60 days.
- Working without pay, or “volunteering” in your old H‑1B job, is not allowed.
USCIS explains the grace period and H‑1B rules on its official H‑1B page:
https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations
Step 3: Transfer your H‑1B to a new employer
If you can find a new job offer quickly, a new company may file a new H‑1B petition for you. This is often called an “H‑1B transfer,” although legally it is a new petition that uses your existing H‑1B status.
The new employer must:
- File a Labor Condition Application (LCA) with the Department of Labor.
- File Form I‑129, Petition for a Nonimmigrant Worker, with USCIS, listing you as the H‑1B worker. You can see the official form and instructions on the USCIS Form I‑129 page: https://www.uscis.gov/i-129
Key points in this stage:
- You keep the benefit of having been counted against the H‑1B cap before; the new employer does not need to win the lottery again.
- The petition should reach USCIS within the 60‑day grace period to give you the strongest position.
- In many cases, you may start working for the new employer as soon as USCIS receives the new H‑1B petition (known as portability), but confirm timing with a lawyer based on your dates and history.
If the new employer files after the grace period ends, USCIS may treat you as out of status, which can create problems. Acting early greatly improves your chances.
Step 4: Change to another status if needed
If no new H‑1B job is available, you may consider a change of status inside the United States, if you qualify. Common options include:
- F‑1 student status to study at a U.S. school
- O‑1 for workers with strong records in their field
- L‑1 for transfers within multinational companies, if you worked for a related company abroad
A change of status is generally requested on Form I‑539, Application to Extend/Change Nonimmigrant Status. See the form here: https://www.uscis.gov/i-539
Timing and rules:
- The I‑539 application should reach USCIS before the end of your 60 days or I‑94 date.
- While the I‑539 is pending, you can usually stay in the country, but you must stop working once your H‑1B job ends unless another work‑authorized status is approved.
Step 5: Plan for departure if no options work
If you cannot find a new employer to file an H‑1B petition and no change of status is filed in time, you should plan to leave the United States before your grace period ends.
Risks of staying past the grace period:
- Accruing unlawful presence, which can cause 3‑year or 10‑year bars on returning in the future
- Problems getting new visas or green cards later
- Extra questions at consulates and border checks
Keep records of your departure, such as airline tickets and passport stamps, to prove your timeline in future visa interviews.
If you lose your H‑1B job, leaving on time and keeping clear documentation can prevent long-term immigration consequences.
Documents to keep and show
Throughout this process, keep a clean file of:
- H‑1B approval notices (all Form I‑797 notices)
- Copies of all H‑1B petitions filed for you
- LCAs related to your jobs
- At least the last 6–12 months of pay stubs
- Bank records showing salary deposits
- Any layoff notice or letter about the company being bankrupt or closing
These documents help new employers’ lawyers prepare a strong H‑1B petition and help you explain your history to USCIS or a consular officer.
How long each stage usually takes
While times vary, a realistic outline looks like this:
| Timeframe | Typical actions |
|---|---|
| Days 1–7 | Confirm payroll status, gather documents, contact potential new employers or schools. |
| Days 7–30 | New employer prepares and files the LCA and H‑1B petition, or you work with a school to get an I‑20 and file Form I‑539. |
| Days 30–60 | USCIS receives your H‑1B petition or change‑of‑status request. You remain in the U.S. based on the grace period and, once filed, on your pending case. |
Processing notes:
- Regular USCIS processing can take several months.
- Premium processing may shorten employer-side adjudication to about two weeks, but it adds cost for the employer.
When to get legal help
Bankruptcy cases can be messy. You may not get clear answers from HR, and your exact dates and pay history matter a lot. Speaking with an experienced immigration lawyer early can help you:
- Count your 60‑day period correctly
- Decide if a new H‑1B petition or a change of status is more realistic
- Avoid actions that could cause unlawful presence
Because each worker’s facts are different, personal legal advice is especially helpful when an H‑1B employer goes bankrupt or shuts down unexpectedly.
If an H‑1B employer goes bankrupt, status depends on continued, paid employment and whether the petition was approved. If you remain on payroll under Chapter 11, your H‑1B can stay valid. If the employer stops paying or closes, your H‑1B ends and a typical 60‑day grace period begins. During that time you should seek a new H‑1B sponsor, file a change of status, or plan departure. Keep pay records, I‑797 notices, and consult an immigration lawyer promptly.
