Race and Responsibility Stereotypes in Consumer Bankruptcies

Are harmful stereotypes about race and responsibility impacting certain consumers who file for bankruptcy? In other words, can racial stereotypes affect the bankruptcy process and American bankruptcy statistics more generally?
Interdisciplinary Research into Race, Racism, and American Bankruptcy
A recent interdisciplinary study from the University of Illinois acknowledges how “prior research has established that society appears to accord less forgiveness to African-Americans when they arrive in bankruptcy court,” which means that “proceedings take longer, cost more, and typically lead to lower levels of debt relief.” According to the new research, “practitioners inside the bankruptcy system have little knowledge of the racial disparities that exist, relying instead on common stereotypes about race, responsibility, and debt.” In other words, without acknowledging structural racial and socioeconomic disparities, assumptions get made about non-white consumers who file for bankruptcy in the country.
The recent study was conducted by researchers in psychology and in legal studies to present an interdisciplinary approach to the problem. According to Robert M. Lawless, a co-author of the study who is Max L. Rowe Professor of Law at the University of Illinois, this ways in which racial stereotypes not only persist in consumer bankruptcy matters but actually could affect how bankruptcy procedures work “should be a major policy concern.”
He highlights how African Americans are overrepresented in Chapter 13 bankruptcy filings. Moreover, according to Lawless, the lack of attention to such statistics is only worsened when there is no attention to the ways that these disparities have arisen. Lawless is co-director of the University of Illinois College of Law’s Program on Law, Behavior, and Social Science.
Perceptions of Lawyers Highlighted in Recent Study
The researchers involved in the new study previously conducted research into stereotypes and the consumer bankruptcy system back in 2012. As they worked on this new research, their focus shifted more closely to lawyers’ perceptions in the bankruptcy system with regard to race and racial stereotypes.
What did they conclude? There are many consumer advocates who do not always take into account the power of racial stereotypes—how they affect lawyers assisting clients, as well as how they affect bankruptcy judges making decisions about discharges. In Lawless’s research, he found evidence to suggest that “about 60 percent of consumer bankruptcy attorneys believed that whites were twice as likely to file Chapter 13 bankruptcy, when in reality it is actually blacks who are twice as likely to do so.”
To be clear, Lawless and Faith Shin, a researcher in the University of Illinois psychology department, concluded that “their perceptions of racial disparity and the actual racial disparities were completely inverted.” Shin went onto explain how “the pattern that emerges is one that hews to the well-worn American stereotypes about which race will own up to their debts and which won’t.”
Most importantly, perhaps, the researchers emphasize that their study underscores persisting problems of believing racial stereotypes—both in consumer bankruptcy law and in other areas.
Contact an Oak Park Bankruptcy Attorney
If you have questions about filing for Chapter 13 bankruptcy, you should discuss your questions with an Oak Park bankruptcy lawyer. An advocate at the Emerson Law Firm can speak with you today. Contact us for more information.
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