Race Matters in Bankruptcy
52 Pages Posted: 19 Apr 2005
Neither bankruptcy nor critical race scholars have considered whether federal bankruptcy laws are raced. This is perhaps not surprising since - on the surface - bankruptcy laws appear to be race neutral. This Article critically examines bankruptcy laws and suggests that, in designing the type of relief to make available to potential debtors, Congress either consciously or unconsciously exhibited a bias in favor of a specific demographic profile. Specifically, to benefit the most from bankruptcy laws, the Ideal Debtor would be a married, employed homeowner who (1) is the beneficiary of a spendthrift trust or has a large employer-provided retirement account; (2) has high, but reasonable, living expenses; (3) provides financial support only to legal dependents; and (4) has little (or no) student loan, alimony, or child support debt. Because statistical data suggest that white people are more likely to fit the Ideal Debtor profile, race matters in bankruptcy.
The Article argues that as legislators are considering ways to reform the Code or judges are interpreting ambiguous provisions of the Code these entities should consciously consider the racial impact of their decisions. The Article concludes by suggesting that a race-conscious Bankruptcy Code would not just benefit minority debtors, but would, instead, provide fairer and more just benefits to financially strapped Americans of all races.
Suggested Citation: Suggested Citation