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Why Black Americans Struggle to Obtain Debt Relief

In March 2011, a sheriff arrived at Michael Render’s childhood home in Collier Heights with a summons related to unpaid child support for his two children. This incident marked the beginning of a series of financial challenges that led Michael to file for bankruptcy a few months later. Despite having $2,550 in assets, his debt amounted to $78,008, including significant child support arrears and unpaid income taxes.

Michael, known as the rapper Killer Mike, never publicly delved into the details of his bankruptcy. However, his song “Ju$t” from the 2020 album highlights his financial struggles, stating, “I get broke too many times.” His personal experiences with financial hardship deeply influenced his views on race and money, drawing from his encounters with bankruptcy, underbanking, and low-wage jobs.

Bankruptcy often represents a last resort for those who see no way out of their financial troubles. The system, intended as a form of mercy, shows significant racial disparities. While Black Americans file for bankruptcy at rates proportionate to their population, they are less than half as likely as white Americans to have their debts reorganized or relieved. This discrepancy exacerbates the Black-white wealth gap, particularly for the 19% of Black families with negative wealth compared to 8% of white families.

Michael Render’s bankruptcy case in Fulton County, Georgia, in 2011 exemplifies these challenges. His assets included modest items like a $200 pair of Nike sneakers and a $300 shotgun, and he had no real estate. His debts were substantial, including $47,032 in unpaid taxes and $17,716 for a repossessed vehicle.

Bankruptcy filings require detailed income and expense reports. In 2011, Michael’s income was $2,200 a month from his music manager, with an additional $1,000 from his wife’s unemployment benefits. Their monthly expenses totaled $1,648.45, covering rent, transportation, food, and clothing.

Michael’s financial woes centered around child support. He became a parent at a young age and sought increased custody of his children in 2004. By 2011, he had fallen behind on child support payments. His bankruptcy trustee objected to his repayment plan, questioning omitted obligations and potential future income from voice-over work. The trustee also noted procedural issues, like the absence of Michael’s stage names in the filing. Consequently, the judge dismissed the case without granting any debt relief.

The experience of Black Americans in bankruptcy courts often mirrors Michael’s. Studies show that Black individuals are less likely to successfully navigate the Chapter 13 process, which restructures debt over time. Approximately two-thirds of Chapter 13 filers do not complete their repayment plans, leaving them with their original debts and additional legal fees. Race is a significant factor in these outcomes, with Black filers more likely to have their cases dismissed, especially when assigned to white trustees.

In Michael’s case, the trustee and judge were both white. Research indicates that Black people assigned to white trustees in Chapter 13 bankruptcies face higher dismissal rates. In Atlanta, as of 2023, no Chapter 13 trustees were Black, highlighting a lack of diversity in the system.

Michael likely chose Chapter 13 to manage his child support debt, which cannot be discharged in bankruptcy. The dismissal of his case meant no restructuring of his child support payments, leading to continued financial pressure. Michael criticized the child support system, stating, “I don’t like the way child support is weaponized against any man… and especially Black men.”

Nathaniel Blackmon, Michael’s lawyer and distant cousin, noted the broader implications of racial inequities in the legal system. He emphasized the need for diverse representation among judicial officials to better serve the public and address the Black-white wealth gap. Blackmon’s family history, including inadequate compensation from the Tuskegee syphilis study, underscores long-standing systemic disparities.

The lack of senior Black professionals in the judicial system contributes to ongoing inequities. As Blackmon pointed out, the value assigned to lives in wrongful death cases often reflects historic racial disparities in earnings. His family’s experience with minimal compensation from the Tuskegee study highlights the potential impact of fair restitution on wealth.

The legal system’s design favors those fitting a specific profile, often excluding Black Americans. As Mechele Dickerson, a law professor at the University of Texas at Austin, observed, the system benefits people who are typically not Black. Without significant changes, these disparities will continue to perpetuate the Black-white wealth gap.

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