Racial Disparities in Debt Collection

66 Pages Posted: 16 Oct 2019 Last revised: 16 Jun 2023

See all articles by Jessica LaVoice

Jessica LaVoice

University of Pittsburgh - Department of Economics

Domonkos F. Vamossy

University of Pittsburgh

Date Written: September 1, 2019


This paper shows that black and Hispanic borrowers are 39% more likely to experience a debt collection judgment than white borrowers, even after controlling for credit scores and other relevant credit attributes. The racial gap in judgments is more pronounced in areas with a high density of payday lenders, a high share of income-less households, and low levels of tertiary education. State-level measures of racial discrimination cannot explain the judgment gap, nor can neighborhood-level differences in the previous share of contested judgments or cases with attorney representation. A back-of-the-envelope calculation suggests that closing the racial wealth gap could significantly reduce the racial disparity in debt collection judgments.

Keywords: debt collection, racial disparities

JEL Classification: D14, D18, D63, G21, J15

Suggested Citation

LaVoice, Jessica and Vamossy, Domonkos F., Racial Disparities in Debt Collection (September 1, 2019). Available at SSRN: https://ssrn.com/abstract=3465203 or http://dx.doi.org/10.2139/ssrn.3465203

Jessica LaVoice

University of Pittsburgh - Department of Economics ( email )

4901 Wesley Posvar Hall
230 South Bouquet Street
Pittsburgh, PA 15260
United States

Domonkos F. Vamossy (Contact Author)

University of Pittsburgh ( email )

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