*  Text taken directly from Paul Kiel and Annie Waldman's The Color of Debt: How Collection Suits Squeeze Black Neighborhoods, ProPublica

​

"Debt buyers are a common presence in local courtrooms.  The companies buy debts for pennies on the dollar and then try to recover what they can from debtors.  The industry began filing suits in large numbers in the early 2000s, and in all three of the cities ProPublica (an independent, nonprofit newsroom that produces investigative journalism) studied, debt buyers filed the most suits of any type of plaintiffs between 2008 and 2012.  In the Newark (New Jersey) area, more than half of the 66,000 court judgments won against residents of mostly Black neighborhoods stemmed from debt buyer lawsuits.  Debt buyers primarily buy defaulted credit card accounts, but the data shows that they routinely sue over smaller balances than banks do.  In the Chicago and Newark areas, debt buyers filed suits with an average balance about 30 percent smaller than the average suit by a major bank.  Perhaps as a result, debt buyer lawsuits were far more numerous in Black communities, ProPublica found.  In Newark, for example, the rate of judgments was about twice as high among middle-income, mostly Black neighborhoods than among the middle-income, mostly White ones."

​

"When ProPublica attempted to measure, for the first time, the prevalence of judgments stemming from (debt collection lawsuits), a clear pattern emerged: they were massed in Black neighborhoods.  The disparity was not merely because Black families earn less than White families.  The analysis of five years of court judgments from three metropolitan areas – St. Louis, Chicago and Newark – showed that even accounting for income, the rate of judgments was twice as high in mostly Black neighborhoods as it was in mostly White ones.  These findings could suggest racial bias by lenders or collectors.  But we found that there is another explanation:  That generations of discrimination have left Black families with grossly fewer resources to draw on when they come under financial pressure.

​

Over the past year, ProPublica has investigated a little-known but pervasive shift in the way debt is collected in America:  Companies now routinely use the courts to pursue millions of people over even small consumer debts.  With the power granted by a court judgment, collectors can seize a chunk of a debtor’s pay. The highest rates of garnishment are among workers who earn between $25,000 and $40,000, but the numbers are nearly as high for those who earn even less.

​

In the city of St. Louis and surrounding St. Louis County, where Jennings lives, only about a quarter of the population lives in neighborhoods where most residents are black.  But over half of court judgments were concentrated in these neighborhoods.  Armed with these judgments, plaintiffs – typically debt buyers, banks, hospitals, utilities, and auto and high-cost lenders – have seized at least $34 million from residents of St. Louis’ mostly Black neighborhoods through suits filed between 2008 and 2012, ProPublica’s analysis found."

​

​

 

​

​

​

Evidence:

​

Paul Kiel and Annie Waldman.  "The Color of Debt: How Collection Suits Squeeze Black Neighborhoods."  ProPublica.  8 Oct 2015