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Study Shows Black People Face Bias in Bankruptcy


A recent study of bankruptcy filings throughout the country show that black people are twice as more likely than white people to file for Chapter 13 bankruptcy, rather than Chapter 7 bankruptcy.

It is well known to bankruptcy professionals that Chapter 13 bankruptcies are much more difficult and costly to complete, compared to Chapter 7 bankruptcies. However, this study has shown black people filing for bankruptcy are overrepresented as far as Chapter 13 filings.

The study does not suggest any specific reasoning behind this phenomenon. It is unknown whether this is being caused by bankruptcy attorneys, trustees or even judges. Some suggest that unscrupulous attorneys are driving black clients towards Chapter 13 as to increase attorneys' fees. Others suggest that blacks have a higher desire to preserve their assets, which a Chapter 13 allows for them to do.

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