Black Women Going Bankrupt at Alarming Rates

Black Women Going Bankrupt at Alarming Rates

As evidence that the financial gap between blacks and whites is widening, not narrowing, we need only look at U.S. Department of Education research which shows that black women are filing for bankruptcy, and defaulting for student loans, at increased rates.

Black Women Going Bankrupt at Alarming Rates

By itself, this research is not necessarily compelling, but Kulture Kritic previously reported that the median wealth for black single women is only $100: The Insight Center for Community Economic Development issued a report on the gender gap to mark International Women’s Day, according to Democracy Now. The report found nearly half of all single black and Hispanic women have zero or negative wealth, meaning their debts exceed all of their assets.

The median wealth for single black women is only $100; for single Hispanic women, $120. This compares to just over $41,000 for single white women. When you marry this previous data with the new bankruptcy numbers, it becomes apparent that black women are sinking in this recession.

Another study found that many African-Americans are withdrawing retirement savings for emergency expenses, and that 50% of African Americans carried a loan balance into 2011 compared to 22% of Asians and 26% of whites. Loan sharks, such as payday lenders, are also making more money from blacks because blacks are less likely to receive traditional loans.

Most disturbing of all is that when blacks do file bankruptcy, they face bias there as well. Your Black World reports: A new study finds that blacks are more likely to be steered into filing a more harsh form of bankruptcy than their white counterparts.

Most bankruptcy filers file under Chapter 7 of the bankruptcy code because it allows them wipe out their debts within a year. For that reason, Chapter 7 tends to have a higher success rate than Chapter 13, which requires filers to use their income to pay back their debts over several years.

The evidence suggests that bankruptcy attorneys were steering blacks into a filing arrangement that was not beneficial for them because of bias.

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