Unable To Pay Off Debts, Black People Make A Hard Choice

Bankruptcy is a process that allows us individuals eliminate their debt or find a way to repay it. It's a complex process that typically requires the services of a lawyer and a court date.

However, the class of bankruptcy filed by most in our community typically has worse outcomes than if they hadn’t filed at all!

While there are six types of bankruptcy in the United States, only two apply to individuals - chapters 7 and 13. Chapter 7 liquidates a person's assets to pay debtors. It provides permanent debt relief in months.

Unfortunately, Black bankruptcy petitioners choose the more complicated option.

ProPublica found that most Black people choose Chapter 13 - which requires a person to make 5-year's worth of payments BEFORE the cancellation of any debt. According to Investopedia, this lowers the odds of successfully discharging one’s debts.

Financial and social systematic inequalities frequently mean that indebted Black people have less income to make consistent payments for these five years. This often leads to cases getting dismissed and getting additional debt piled onto what is already owed.

Financial and social systematic inequalities frequently mean that indebted Black people have less income to make consistent payments for these five years. This often leads to cases getting dismissed and getting additional debt piled onto what is already owed.