What about this new study that shows that, all across the country, relative to everybody else who goes bankrupt, blacks who go bankrupt are more likely to file for the more onerous Chapter 13 bankruptcy than the Chapter 7 bankruptcy? Why this disparate impact discrimination?
Eventually, the article gets around to reporting — but, of course, not explaining — a few informative facts:
Even though the attorneys’ fees for the more labor-intensive Chapter 13 are more than double the charge for a Chapter 7, some truly distressed debtors will pursue a Chapter 13 anyway, several bankruptcy experts said. That is because they can pay the fee over time, unlike in a Chapter 7, which typically requires a payment before the case is filed. If blacks are perceived as less likely to have the resources — or a family with resources — to come up with a lump sum, some lawyers may be inclined to suggest a Chapter 13, these experts suggested.
The mention that attorneys' fees are more than double for Chapter 13 raises the awkward question that never comes up in the article: Are blacks' attorneys more likely to be black? It's like that awkward question about the high rates of defaults by minorities on mortgages: How did the racial makeup of the mortgage brokers who sold mortgages that went belly up to Hispanics differ from the norm?
So, why would lawyers tend to perceive blacks "as less likely to have the resources — of a family with resources — to come up with a lump sum"? How in the world did this stereotype of blacks tending to be poorer than whites get started, anyway?
In general, A) the people who wind up in bankruptcy are poorer decisionmakers. B) Blacks wind up in bankruptcy at a higher rate. Therefore, it's hardly surprising that black bankruptees tend to be worse decisionmakers in bankruptcy than other bankruptees.
The most interesting thing about thisdata is actually that bankrupt Hispanics have the lowest rate of filing Chapter 13. Perhaps Hispanics have more extended family support in coming up with the lump sum, or perhaps the ones who would be likely to file Chapter 13 just take off for South of the Border.