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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.
Despite their prevalence, these suits remain remarkably hidden, even to people in the communities most burdened by them. 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.
April Kuehnhoff, an attorney at the National Consumer Law Center, said that the analysis raised “crucial questions about how racial disparities are entering the debt collection system and what we can do to eliminate these disparities.” The findings, she said, should spur lawmakers to reform overly punitive federal and state collections laws..
Collection suits - typically over smaller amounts like credit card debt - fly across the desks of local judges, sometimes hundreds in a single day. Defendants usually don’t make it to court, and when they do, rarely have an attorney. For those who do show up, the outcome isn’t all that different. In Missouri, most judgments resulted in the plaintiff attempting garnishment, whether the defendant appeared in court or not, according to ProPublica’s analysis.
In Jennings, which since the 1960s has shifted from almost entirely white to 90 percent black, the suits are unrelentingly common. Between 2008 and 2012, there was more than one lawsuit for every four residents. And yet, this fact astounded residents when they heard it, because it is a facet of life that most keep private. Parents hide it from their children, and neighbors never think to discuss it.
The typical household income in Jennings is about $28,000, an income level at which families spend, on average, all of their income on basic necessities, federal survey data shows. Each paycheck must be carefully apportioned with the most vital costs - mortgage or rent, food and utilities - prioritized.
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