Race Disparity in Bankruptcy Chapter Choice and the Role of Debtors’ Attorneys

Abstract:     
In “Race, Attorney Influence, and Bankruptcy Chapter Choice,” which appeared in the Journal of Empirical Legal Studies, we reported on two studies. The first study used real-world bankruptcy data and documented a large racial disparity in bankruptcy chapter choice. Even after controlling for numerous factors, African Americans in bankruptcy used chapter 13 at rates that were approximately twice as great as the rates at which other races chose chapter 13. In the second study, attorneys were more likely to recommend chapter 13 bankruptcy to a couple named “Reggie & Latisha” as compared to a couple named “Todd & Allison.”

The American Bankruptcy Institute and the St. John’s University School of Law sponsored a symposium entitled “Bankruptcy and Race: Is There a Relation” that explored our earlier studies. We prepared this paper for that symposium and summarize our earlier findings in a more traditional law-review format.

Number of Pages in PDF File: 13

Keywords: bankruptcy, Chapter 13, local legal culture, race

JEL Classification: K49

Accepted Paper Series