My new empirical legal studies article is up on SSRN papers.ssrn.com/sol3/papers.... and submitted to law reviews on Scholastica: Disparate Debt reports findings of racially disparate impacts in case filing rates, debt cases filed by subprime lenders, and case outcomes when controlling for income.
![[Abstract of article] Debt collection lawsuits increasingly dominate civil dockets in state courts, with default judgments frequently entered against consumer defendants. Analysis of case filing rates and metrics shows debt collection lawsuits and entries of default judgment disproportionately impact Black and Hispanic/Latino borrowers in California in comparison to their white neighbors when controlling for median household income. In the years following the pandemic, the configuration of the business of debt collection is changing, as more lawsuits are filed by originating lenders in an industry previously dominated by third-party purchasers of defaulted debt portfolios. An increasing number of cases are filed by subprime lending market-share leaders Capital One and Discover Bank, as well as subprime installment and auto lenders. When controlling for income, findings show disparate impacts demonstrating that non-white borrowers are more likely to be sued by lenders with large profiles of subprime debt. In debt collection lawsuits in state courts, ostensibly neutral procedural rules impose barriers to access to justice for unrepresented defendants, resulting in inequitable substantive outcomes that disproportionately burden Black and Hispanic/Latino defendants. This Article pairs a legal consciousness frame with an evaluation of the role that subprime non-mortgage consumer debt and racially discriminatory lending policies have historically played in contributing to financial instability to link disparate access to affordable credit with racially disparate filing rates and outcomes in consumer debt cases. Normative recommendations consider three policy approaches. The Article addresses the futility of disparate impact-based federal enforcement and rulemaking under White House Executive Order 14281, discusses debt abolition theory, and evaluates the value of partnerships among legal service providers, courts, and non-profit community-based organizations.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:zovdudy4wjqxrcnh5mjbs5pm/bafkreigochiawfvsbybvyt5orwvweoppmhmab7wrhw3zkmkqluha3xdc3u)
