January 24, 2012 | 9:10 AM | By

The Racial Bias of Bankruptcy

African Americans have been hit harder by the recession and the foreclosure crisis. And now a new study published in The Journal of Empirical Legal Studies shows disparities persist even when they want to resolve debts. Blacks filing for bankruptcy are more likely to end up in a costlier and more time-consuming process than whites. Such a bias exists even when controlling for factors such as income, education and assets.

The study’s authors didn’t find that overt discrimination by lawyers was the cause of the disparity. “But when you have a complex system,” Robert M. Lawless, one of the authors, told the New York Times, “these biases can play out and the people within the system don’t see the pattern because nobody is in charge of looking at these big issues.”


The vast majority of debtors file under Chapter 7 of the bankruptcy code, which typically allows them to erase most debts in a matter of months. It tends to have a higher success rate and is less expensive than the alternative, Chapter 13, which requires debtors to dedicate their disposable income to paying back their debts for several years.

… A survey conducted as part of their research found that bankruptcy lawyers were much more likely to steer black debtors into a Chapter 13 than white filers even when they had identical financial situations. The lawyers, the survey found, were also more likely to view blacks as having “good values” when they expressed a preference for Chapter 13.

Read more at: www.nytimes.com

  • Kbreads

    I forget the term for – blaming others for ones own problems – the great martin luther king stated, judge me by content of my character not the color of my skin. – poor money management, not very good prioritys, to much child support is character, not colort