Pro Publica - Our analysis of five years of [debt collection] 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.
Despite their prevalence, these suits remain remarkably hidden, even to people in the communities most burdened by them. Jennings, a suburb in north St. Louis County, has shifted since the 1960s from almost entirely white to 90 percent black.
In the city of St. Louis and surrounding St. Louis County, where Jennings lies, 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.