In Chicago, Black Personal Bankruptcies Skyrocket

In Chicago, Black Personal Bankruptcies Skyrocket

A study details how personal, or Chapter 13, bankruptcies have grown in Black communities and Black women were particularly likely to file.

Published May 13, 2011

The ripple affect of losing one’s job, being under-employed or suffering from long-term unemployment are writ large in Chicago’s Black neighborhoods. One financial aspect is detailed in a new report: Bridging the Gap II: Examining Trends and Patterns of Personal Bankruptcy in Cook County’s Communities of Color prepared by Chicago’s non-profit Woodstock Institute.


The study details how a scythe of the Great Recession, in the form of personal, or Chapter 13 bankruptcies, sliced through Black communities in the nation’s second most populous county. Black women, with some regular income, were particularly likely to file.


The Woodstock Institute is a Chicago research and policy group that focuses on fair lending, wealth creation and financial systems reform.


Between 2008 and 2010, Woodstock reports that personal bankruptcies rose by 59.2 percent in Cook County and those filed in predominately Black communities were up by 27.3 percent. That’s just the tip of the problem. Blacks filed bankruptcy cases at the rate of 5.2 per 100 individual adults, while the general rate for the county was 2.9 cases per 100 adults, and 1.8 filings per 100 adults in white communities.


In many metropolitan areas African-American women have had a somewhat easier time finding, and keeping, employment particularly in traditional pink-collar sectors such as medical, hospitality and food-related services. However in a competitive economy, where high school and college graduates compete for low-pay jobs, these women—often supporting households—have filed for personal bankruptcy to survive economically.


Between 2006 and 2010 in Cook County, 5.1 of 100 adult Black women filed for personal bankruptcy compared to 3.4 of 100 adult Black men. By contrast, in predominantly white communities, the filing rate was 1.2 per 100 adult women and 1.2 per 100 adult men.


In addition, women-headed households “comprised the largest share of bankruptcy filings, filing for 16.7 percent of all cases in Cook County between 2006 and 2010.”


This scenario makes one wonder if it is being replicated in Black communities nationally?


(Photo: Frank May/ Landov)

Written by Frank McCoy


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