Law Review: Cohen, Lawless and Shin- Opposite of Correct: Inverted Insider Perceptions of Race and Bankruptcy


Previous data collected during the 2007 meltdown of the subprime mortgage market showed that African Americans were approximately twice as likely to file chapter 13 bankruptcy than persons of other races, a significant policy issue given the generally less generous rules in chapter 13. We first update and replicate these findings with new data collected during 2013 2014 as the housing market recovered. Results of the original study were not specific to the subprime crisis as the new data showed the same 2:1 racial disparity as the older data, suggesting that this disparity may be a relatively enduring part of the U.S. bankruptcy system.

To see if insiders were aware of this disparity, we sent surveys to a national random sample of consumer bankruptcy attorneys. They seemed to believe there was a racial disparity in bankruptcy, but they had the disparity exactly backwards. A majority (about 60%) believed that whites were twice as likely to file chapter 13 when it is actually African Americans who are twice as likely to do so. We also report on a convenience sample of respondents from Amazon Mechanical Turk. These respondents have little or no knowledge of the U.S. bankruptcy system but likely hold common American stereotypes about which groups tend to be responsible or irresponsible. Their responses were largely similar to those of bankruptcy professionals. Overall, Mechanical Turk respondents were slightly more accurate than bankruptcy professionals. The likely reason is that Mechanical Turk respondents stuck more closely to the national base rate.

Across all studies, it seems that those inside the bankruptcy system have little knowledge of the racial disparities that exist within it. Instead, they rely on common American stereotypes about who are responsible or irresponsible citizens.


This is a very hard topic for consumer bankruptcy attorneys, but one which we must all grapple, both in their individual practices and more generally as a legal community. It is towards that end that the National Association of Consumer Bankruptcy Attorneys (NACBA) is including “Implicit Racial Bias and Consumer Bankruptcy” as a centerpiece panel discussion at its upcoming 2018 Conference in Denver, with a focus on both learning to be aware of these often unconscious decisions and how lawyers can work to counter them.

It is interesting that the authors of this paper sent similar surveys to Chapter 13 Trustees, but that the response rate was substantially lower, likely because, as the authors note, “the trustees had communicated among themselves about the survey.” This indicates that the value of these studies may be wearing thin, as this active refusal to participate by Chapter 13 Trustees shows a defensiveness that may leave at least that segment of the consumer bankruptcy community unwilling and uninterested in engaging with this issue.

Perhaps the subjects of this paper would more readily work to come to terms with the troubling findings in these studies if the authors of this paper had expressed even a modicum of respect, let alone admiration, for the hard work and dedication that the vast majority of consumer bankruptcy attorneys provide day in and day out for their otherwise under-served clients.

For a copy of the paper, please see:

Opposite of Correct: Inverted Insider Perceptions of Race and Bankruptcy


1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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