Unlawful or illegal immigrant or no status - whichever you prefer
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"No immigration status" would be the best "politically correct" way of putting it in 2013's America.
No, husband's immigration status ( or lack thereof) will not affect sister's N-400 in any way, shape or form.
Behar Intl. Counsel 619.234.5962 Kindly be advised that the answer above is only general in nature cannot be construed as legal advice, given that not enough facts are known. It is your responsibility to retain a lawyer to analyze the facts specific to your particular situation in order to give you specific advice. Specific answers will require cognizance of all pertinent facts about your case. Any answers offered on Avvo are of a general nature only, and are not meant to create an attorney-client relationship.
I agree with my colleagues. His status, or lack thereof, will not affect your sisters application.
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