Consumer Bankruptcy and Race in Chicago
Are there correlations between personal bankruptcy filings and the race of the individuals who file? On a related note, are there correlations among race, Chapter 7 bankruptcy filings, and Chapter 13 filings? According to a recent report in ProPublica , there is a clear racial disparity when it comes to consumers who are filing for bankruptcy and choosing between Chapter 7 and Chapter 13. Specifically, the report notes that black Americans choose to file under Chapter 13 more often, and fewer complete their repayment plans to have debts forgiven: “[O]nly 39 percent of Chapter 13 cases filed by debtors from majority black zip codes ultimately resulted in a discharge of debts. In contrast, 58 percent of the cases filed by debtor from majority white zip codes were discharged.” This data speaks to bankruptcy trends nationwide, and even when other factors (such as income) are taken into account and controlled for, this disparity remains, according to the report. Where does Chi...