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Pro Publica: Extraordinary Struggles of African American Debtors

posted by Jason Kilborn

PoorAAmanI understand what it's like to live in a low-income family. I can only begin to try to understand the extraordinary struggles facing low-income families who also happen to be black. Pro Publica has just released a story and accompanying study that helps a bit to bridge this empathy gap.

Along the way, the story raises a frustrating point about our legal system that impacts all lower-income communities, but black folks in particular: Most legal protections against the kinds of rapacious collections activities described in the Pro Publica story require the debtor to affirmatively invoke the protections. For example, the story notes a collector explaining "if Byrd had filed a claim in court stating that the funds were exempt, the garnishment would have been terminated." Does the tragic irony escape this commentator? Byrd doesn't have enough money to pay the $29 sewer bill--do we really expect her to hire and pay for a lawyer to "file a claim in court stating that the funds were exempt"?! Similarly, the story describes default judgments being entered on time-barred debts because the debtors failed to invoke the statute of limitations--why in the world would a rational system allow time-barred debt to be revived against an impecunious debtor for failure to pay for counsel to raise this defense?! It's a self-fulfilling prophesy. The clever and unscrupulous inevitably prevail in a system where "The law doesn’t require anyone to tell debtors like Winfield of the [head-of-household 10% garnishment] exemption, and the burden is on them to claim it."

The story also cites and links to a study (and comments from study contributor and Slipster, Bob Lawless) on racial disparities in Chapter 13 practice. I've witnessed the emotional fervor that this study can whip up in a crowd of bankruptcy attorneys ... but the Pro Publica story ought to prompt us to return to the provocative question of whether, intentionally or not, directly or indirectly, our debt collection and debt relief systems are disparately impacting our black neighbors. Fixing problems that fall more heavily on these debtors would improve the system for everyone.

Image courtesy of Shutterstock

Comments

Hi there, thanks for this item. Wanted to let you know that 'struggles' is missing an r in your subject line.

Thanks, kris! Corrected.

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  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

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