I came to find out that my wife overstayed her visa while applying for Adj of Status

[hitcher]

It has been a lengthy 10 years since I started my immigration journey and as I was seeing the light, a speedy 16-wheeler truck just hit me in the face. It all started when both my wife and I came here to study for our Master's degree. My wife finished her degree back in 2013 before me and then we decided to switch her to F2 visa as my dependent so she can take care of our new born baby. I went to the international office at my school, spoke to the advisor (newly hired), asked me to fill out two forms and I got the new I-20. That was it. Nothing more. The thing is, no one at the office told us that we need to file I-539. One year went by, I got H1b visa. I filed 539 to change my wife status from the supposedly F2 to H4 after 10 months of Her I-20 expiration date. Her I-539 went through and we received her approval notice of H4 visa with a new I-94. Fast forward two years, I got my I-140 approved through my employer. Ecstatically, I prepared my packet to send out to USCIS when I came to know from the company lawyer that my wife was out of status between her F1 expiration date and H4 and therefore, she is not eligible to adjust her status. More frighteningly, it seems that there is a possibility of a three year bar and with that, it does not seem that counsel processing is an option. The thing is the lawyer himself is not quite sure about this given that she has an approved change of status request after a prior overstay. He thinks that the prior overstay violation shall be pardoned but he is not sure. Even with that, he advises against sending our her application. Counsel processing is overwhelmingly difficult not to mention the risk of denial. Any advice on this topic?

Thanks in advance for pitching in.

[newacct]

First, there is no possibility of a 3-year unlawful presence ban if she leaves, because as she was in F status, she was admitted until "D/S", not a date, on her I-94. One only automatically starts accruing "unlawful presence" if one stays past the date on their I-94; for people who entered on "D/S", they don't automatically start accruing "unlawful presence" no matter how long they stay. ("Unlawful presence" will also start accruing if she applied to USCIS for a benefit and was denied for being out of status, or she was given a final order of removal by an immigration judge; neither of these things happened.) So she has not accrued even 1 day of unlawful presence, let alone 180 days.

Second, an alternative to consular processing is for her to leave and re-enter the US on her H4 visa, and then do Adjustment of Status. There is an exception to the bars to AOS for being out of status for people in employment-based categories (which you guys are), where if she has been out of status for less than 180 days since the last entry (previous stays don't matter), the bars to AOS for being out of status in the past don't apply.