Posted on April 5, 2021

Black Women Are Filing Bankruptcy Amid the Pandemic at Alarming Rates

Aarthi Swaminathan, Yahoo, March 30, 2021

The pandemic-induced recession has led to a notable amount of Black women to declare bankruptcy, according to a report by nonprofit bankruptcy startup Upsolve.

The report came from a bankruptcy questionnaire of 17,000 low-income users over the past year and found that COVID-19 has pushed many to seek bankruptcy protection.

“Upsolve is exactly right… Black people are overrepresented in bankruptcy, and also Black women are especially overrepresented in bankruptcy,” Robert Lawless, a consumer bankruptcy expert and a professor at the University of Illinois, told Yahoo Finance.


There are a couple of reasons for the uptick in filings.

Firstly, many Black workers are in jobs that don’t allow for remote work, consequently putting them at risk if they were to continue in-person employment amid the pandemic.


Additionally, unemployment for Black workers also increased sharply in April last year and continues to see only modest recovery, as seen in the chart below.

Most of the Black users on Upsolve were struggling financially across the board. A survey of 7,100 users found that the average amount in Black users’ checking accounts was $257, as compared to White users with $343. And they only had on average $205 in their savings account.

But the issues also run deeper than their labor situation, said Lawless.

“First of all, there’s structural racism in society … and in bankruptcy court,” he explained. “The income gaps, the wealth gaps, those problems cause people to end up in bankruptcy court.”