"Blacks Face Bias in Bankruptcy"

Sometimes, looking at raw statistics, e.g. rates of bankruptcy across variaous groups, is not enough to tell the full story:

Blacks Face Bias in Bankruptcy, Study Suggests, by Tara Siegel Bernard, NY Times: Blacks are about twice as likely as whites to wind up in the more onerous and costly form of consumer bankruptcy as they try to dig out from their debts, a new study has found.

The disparity persisted even when the researchers adjusted for income, homeownership, assets and education. The evidence suggested that lawyers were disproportionately steering blacks into a process that was not as good for them financially...

The vast majority of debtors file under Chapter 7 of the bankruptcy code, which typically allows them to erase most debts in a matter of months. It tends to have a higher success rate and is less expensive than the alternative, Chapter 13, which requires debtors to dedicate their disposable income to paying back their debts for several years.

The study of racial differences in bankruptcy filings ... found that bankruptcy lawyers were much more likely to steer black debtors into a Chapter 13 than white filers even when they had identical financial situations. ...

“Unfortunately I’m not surprised with these results,” said Neil Ellington, executive vice president of Consumer Education Services, a credit counseling agency in Raleigh, N.C. “The same underlying issues that created the problem in mortgage lending, with minorities paying higher interest rates than their white counterparts having the same loan qualifications, are present in all financial fields.” ...

Chapter 13 is not always an inferior choice. Many distressed borrowers go that route because they may be able to save their homes from foreclosure. But even that does not explain away the difference: among blacks who did not own their homes, the rate of filing for Chapter 13 was still twice as high...

If a debtor chooses an inappropriate chapter, there can be serious implications. ...

Republicans want you to beleive that the government's support of programs to promote home ownership among low-income households caused the crisis. The claim doesn't withstand an examination of the actual evidence, but it goes along with the ideology that the government is too large due to spending on social programs for the undeserving "others." It also resonates politically in certain circles, so it has been pushed pretty hard by those supporting conservative ideology. However, it's becoming more and more clear -- crystal clear -- that these groups were the victims of the crisis rather than its cause. Addressing the true causes of the crisis, e.g. an unregulated shadow banking sector, will cause traditional Republican constituencies to lose the freedom to exploit whomever they want/can to make a few more bucks, and that's the truth Republican operatives are trying to hide with this relatively successful attempt to blame the crisis on government help for the poor.