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Black people out of all bankruptcy filers are twice as likely on average to file for a more costly type of personal bankruptcy than debtors of other races, The Wall Street Journal reported. Several studies focused on racial disparities in the consumer bankruptcy system also found that Black people make up a higher percentage of debtors across the bankruptcy system compared with the total population, said law Prof. Robert Lawless at ABI’s Consumer Bankruptcy Forum. The number of Black people who file for chapter 13 also is significantly higher than among white people and those of other races. The disparities highlight the role unconscious bias and systemic racism may play in the bankruptcy system. Black people who have filed for chapter 13 also are less likely to obtain a discharge of their debt, according to a report from the ABI Commission on Consumer Bankruptcy. The results raise concerns about creating a situation where Black people end up paying more for bankruptcy, yet are less likely to get relief from the process. The racial disparity between chapter 13 filers remains even after controlling for factors, such as a prior bankruptcy history, assets, income and debt, said Prof. Lawless, a professor at the University of Illinois College of Law. Another possible reason Black people are more likely to file for chapter 13 protection than chapter 7 is because they are steered to do so by lawyers. 

President-Elect Joe Biden has made several ambitious proposals for student loan forgiveness that may be stymied by legislator opposition, according to an analysis from Forbes. Nevertheless, there may be a few ways he can implement at least part of his student loan forgiveness agenda. Student loan debt has grown to record levels, spurring calls for loan forgiveness. According to the Federal Reserve Board’s G.19 report, there’s a total of $1.7 trillion in student loan debt outstanding as of September 30, 2020. This includes both federal and private student loans. During the campaign, Biden made several proposals for student loan forgiveness, such as forgive $10,000 in federal student loan debt per borrower; forgive all tuition-related undergraduate federal student loan debt for borrowers who attended public colleges and universities; switch Public Service Loan Forgiveness (PSLF) from a back-end loan forgiveness program to an up-front loan forgiveness program; and restore bankruptcy rights to student loans, thereby allowing borrowers in extreme financial distress to discharge their student loans in bankruptcy. These proposals are expensive, but not as expensive as calls to forgive all student loan debt because the proposals are more narrowly targeted.