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After being laid off from her job at a hospital last year, Roxie King found herself facing bankruptcy. This is her story.

“The high concentrations of bankruptcy filings in African-American communities, particularly among women-headed households, is an indicator of the overwhelming debt burdens and precarious economic situations facing these communities,” says Geoff Smith, Senior Vice President of Woodstock Institute. “These findings also raise concerns that bankruptcy filers in African American communities are not getting the economic benefits of the process and are, in fact, being set further behind.”

The report, Bridging the Gap II: Examining Trends and Patterns of Personal Bankruptcy in Cook County’s Communities of Color, examined geographical, gender-related, and chapter choice trends in data from federal bankruptcy courts in Cook County. It found that:


Women make up a larger share of individual bankruptcy filers in all communities, and a dramatically larger share in African American communities, than men do.

In Cook County, 2.6 per 100 adult women filed for bankruptcy compared to 2 filers per 100 adult men between 2006 and 2010.

In contrast, 5.1 per 100 adult women filed for bankruptcy in Cook County’s African-American communities compared to 3.4 per 100 adult men over the same time period.

Of all bankruptcy cases in Cook County between 2006 and 2010, 45.9 percent were filed by women-headed households, while 31.8 percent were filed by male-headed households.

Households headed by women in African-American communities comprised the largest share of bankruptcy filings, filing for 16.7 percent of all cases in Cook County between 2006 and 2010.


Bankruptcy filers in African-American communities are more than twice as likely as filers in predominantly white communities to choose Chapter 13 bankruptcy.

Of all personal bankruptcy cases in Cook County from 2006-2010, 32.8 percent were Chapter 13 cases.

In contrast, 47.9 percent of all personal bankruptcy filings in Cook County’s African-American communities were Chapter 13, while 22.5 percent of personal bankruptcy filings in predominantly white communities were Chapter 13.


Chapter 13 bankruptcy, in many ways, produces less advantageous outcomes than Chapter 7 bankruptcy. In Chapter 7 bankruptcy, which is often faster and less expensive, an individual pays off debt by liquidating his or her assets, except for those exempted by state law. In Chapter 13 bankruptcy, which usually incurs higher fees, an individual pays back a portion of his or her debt through a three- to five-year repayment plan, after which all remaining debts are discharged. A high percentage of individuals in Chapter 13 bankruptcy do not complete their repayment plans, achieving no long-term debt relief.


The report also found:

Personal bankruptcy activity in Cook County increased dramatically over the course of the recession. Between 2008 and 2010, non-business bankruptcy activity increased by 59.2 percent in Cook County. The largest increases in bankruptcy activity were observed in Latino and predominately white communities. Over this same period, the number of bankruptcy filings in predominately African American communities increased by 27.3 percent.

Personal bankruptcy filings are almost three times more concentrated in African-American communities than in predominantly white communities in Cook County. Between 2006 and 2010, 5.2 bankruptcy cases were filed per 100 adults in African-American communities. White communities had 1.8 bankruptcy filings per 100 individuals over the age of 18.


Some recommendations to improve economic opportunity for individuals in African-American communities included in the report are:

Support targeted financial planning, debt management, credit building, and legal resources for individuals in debt-burdened communities of color.

Promote regulation to protect economically vulnerable individuals from potentially abusive financial products and practices.


For more information, please contact Senior Vice President Geoff Smith at 312-368-0310 or

A companion piece to this report was produced by the Chicago Reporter, who investigated bankruptcy filings in their May 2 issue. Special thanks to the Illinois Asset Building Group and Partners In Community Building, Inc (PICB) for their assistance.

Don’t miss it: Senior Vice President Geoff Smith will be guest-blogging about bankruptcy, debt, and consumer credit at Credit Slips this week.


About the series

Bridging the Gap is a series of reports focused on raising awareness of gaps in wealth and economic opportunity between the Chicago region’s communities of color and white communities and informing policy solutions to help close those gaps. The wealth gap between African American and Latino and white communities has been well documented, and there are concerns that the effects of the ongoing foreclosure and economic crisis will further widen this chasm. The first report in the series was Bridging the Gap: Credit Scores and Economic Opportunity in Illinois Communities of Color.