Hi, it is possible to regain German citizenship.
See § 13 StAG.
You can ask for it at the German embassy, too. You should declare that you are planning to go back to Germany and would leave U.S. citizenship. This would make things easier.
This is the form you will have to fill out:
The process will need several months up to a year, because it is a so called "Ermessenseinbürgerung".
The authorities have dicretion to decide whether to give you the German citizenship. So they may collect a lot of extra data about your life and economic background. This all takes time.
You should state your connections to family in Germany, that you are able to maintain yourself or who will maintain you.
The issue of medical insurance should be resolved...
In your case I think it will probably be possible to regain the citizenship, but it will take its time.
Will I be able to begin working without german citizenship, and if so, what kind of forms need to be filled out and steps need to be taken? I am a licensed psychotherapist and licensed alcohol and drug counselor here in the US. With that I assume I should get "highly qualified status" and I hope this will make it easier to obtain Arbeitserlaubnis.
It is possible to get a residence permit (Aufenthaltserlaubnis) and this gives you the right to work in Germany, see § 38 II AufenthG.
However, the authority can decide whether to give it to you. You should especially prove your German skills and economic background.
See also § 5 AufenthG.
As a US citizen you do not necessarily do the paper work via the German embassy in the States (although recommended). can also enter as a tourist to Germany and ask for the permit at the local Ausländerbehörde at your place of residence.
Will a statement from my parents that they will financially support me until I find work be necessary?
Not necessarily but may make things easier...
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