If you entered and were inspected and there are no fraud and other inadmissibility issues, you would be eligible to adjust based on marriage to a USC. However, the fact that you entered illegally and stayed a year and then left would trigger the 10 year bar and would be a problem for you if it came to light.
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Your overstay won't present any problems but your prior unlawful entry may. You definitely need to work with an immigration attorney. My firm handles these types of cases.
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Legal disclaimer: The statement above is general in nature, as not all the facts are known. You should retain an attorney to review all the facts specific to your case in order to receive advise specific to your case. The statement above does not create an attorney/client relationship.
I am unclear if you were inspected and admitted lawfully both times. If you were, then there should be no problem in adjusting your status. However, if you crossed illegally at some point, you would face a charge of inadmissibility and would likely require a waiver. I suggest you have an in-depth dicussion with an experienced immigration attorney before filing anything with USCIS. Good luck!
Yes, you will be denied citizenship if you apply solely based on the marriage, as you must first be a legal permanent resident for a number of years before applying for citizenship.
Your spouse can petition you for legal permanent residency, and you can apply for adjustment of status if you can prove a legal entry to the US, and that your spouse is a US citizen.
J Charles Ferrari Eng & Nishimura 213.622.2255 The statement above is general in nature and does not constitute legal advice, as not all the facts are known. You should retain an attorney to review all the facts specific to your case in order to receive advise specific to your case. The statement above does not create an attorney/client relationship. Answers on Avvo can only be general ones, as specific answers would require knowledge of all the facts. As such, they may or may not apply to the question.