Abstract

Excerpted From: Jerron R. Wheeler, Breaking Bias: A Singular Chapter Solution for Racial Equity in Consumer Bankruptcy, 21 UC Law Journal of Race and Economic Justice 239 (June, 2024) (74 Footnotes) (Full Document)

The COVID-19 pandemic exacerbated racial inequities in the American healthcare system. In the early months of the pandemic, Black Americans were twice as likely as White Americans to die from COVID-19. Even today, four years since the pandemic began, Black Americans continue to face disproportionate risks of hospitalization and death. Disparate health outcomes, coupled with disproportionate job losses, make Black Americans more vulnerable than ever. In the context of longstanding wealth inequities, the aftermath of the pandemic has only further spotlighted the storm of financial disarray that many have long suffered from. Cascading circumstances have made it extremely difficult for Black families to maintain employment, housing, and other necessities linked to financial stability. The result--a medical debt crisis coming off the heels of a national and global debt crisis.

Financial setback is not the only problem associated with skyrocketing medical debt. High amounts of medical debt have been linked to health problems. The burdens associated with increased expenses cause people to delay necessary medical care, resulting in increased health complications. Therefore, the inability to repay medical debts has forced families to resort to bankruptcy for relief. In fact, medical debts contribute to approximately 60% of all personal bankruptcy filings, outpacing those for credit card bills and home mortgages.

This article seeks to: (1) highlight racial disparities and attorney bias in consumer bankruptcy; (2) examine possible solutions on a systemic level; and, (3) advocate for consolidating consumer bankruptcy's two-chapter system into one, single chapter as the best way to eliminate racial bias within the bankruptcy system going forward. This article focuses on systemic level changes rather than on individual actors as the most effective means to significantly reduce the influence of individual bias on bankruptcy filer outcomes.

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In conclusion, this article emphasizes the urgency of addressing racial bias in the bankruptcy system, particularly in the wake of the COVID-19 pandemic. As pandemic aid has waned, returning many Americans back under immense financial pressure, bankruptcy filings have correspondingly ticked back up. Black Americans, in particular, are experiencing the adverse effects of mounting medical debt, coupled with disparate treatment within the bankruptcy system. This difference in treatment further undermines overall wealth protection, exacerbating widened gaps in economic inequality.

The Bankruptcy Code has simply not evolved to meet the needs of today's consumers. However, pursuing meaningful change is a multifaceted challenge. Any viable solution will require collaboration between legal professionals, policymakers, and other stakeholders. Success would depend on the nature of implemented reforms, ongoing monitoring, regular trainings for attorneys, and continuous efforts to ensure fairness and equal treatment for all individuals. For the actors in the bankruptcy system, the broader goal should be to create a bankruptcy system that is fair, equitable, and accessible to individuals of all racial backgrounds. Congress can take the first step by revisiting the CBRA or passing similar legislation. In doing so, debt relief would be less elusive, especially for Black Americans, who bear the brunt of the financial challenges wrought by the Covid-19 pandemic.

Jerron Wheeler is a Staff Attorney at Florida Health Justice Project, a legal non-profit organization that through litigation, advocacy, and public education seeks to increase health equity and expand healthcare access to underserved populations in Florida.