Initial data indicates that the wealth gap between Blacks and whites is widening, and a new study from Wharton shows how racism plays a key role in keeping minorities from reaching financial equality.
How Bankruptcy Bias Contributes to the Racial Wealth Gap
Originally posted by Wharton finance professor Sasha Indarte on September 20, 2021
Wharton finance professor Sasha Indarte is part of a team of researchers looking at bias in bankruptcy, which is a significant source of debt relief for Americans. In their study, Indarte and her co-authors found that Black bankruptcy filers are far more likely than whites to have Chapter 7 and Chapter 13 cases dismissed by the court.
“When a case is dismissed, this means someone goes through all the hassle of trying to file for bankruptcy, but they don’t actually get the debt relief by the end of the process,” Indarte said during an interview with Wharton Business Daily on SiriusXM. (Listen to the podcast above.) “When we see that Black filers are much more likely to get their cases dismissed, that means they’re getting access to debt relief at a much lower rate.”