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Is there a racial component to Chapter 7 Bankruptcy?

Financial strain can happen to any Tennessee resident, regardless of race, gender, age or other classification. According to researchers, however, some consumers may be treated differently than others when it comes to seeking Chapter 7 bankruptcy or other bankruptcy protections. Understanding these issues can help consumers find the right resources to guide them through the process. 

Studies show that African-Americans file for Chapter 13 bankruptcy at twice the rate of whites. However, when bankruptcy attorneys were asked to predict the filing choice of people from different races, they overwhelmingly believed that whites were more likely to file for Chapter 13. Researchers believe that these results indicate the presence of deeply held concepts regarding how people of different races approach their financial obligations. 

Stereotypes are common, and often guide the way that people behave in their daily lives. That is true in interpersonal relationships, and also in the workplace. Even professionals who have advanced degrees and are well respected can fall into stereotypical ways of thinking. Research like the study mentioned here can help create more accurate training among legal professionals, and can open the door to discussion about how clients are approached. 

This information should be of note not only to Tennessee consumers, but also to the attorneys who represent them in Chapter 13 or Chapter 7 bankruptcy cases. The first step in altering one's misconceptions is learning how they may be flawed. For consumers, the research underscores the important of finding a bankruptcy attorney who approaches serving clients with a blind eye toward racial identity. 

Source:, "Stereotypes about race and responsibility persist in bankruptcy system", Phil Ciciora, Nov. 29, 2017

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