Document Type

Article

Publication Date

1-2020

Publication Citation

98 North Carolina Law Review 419 (January 2019)

Abstract

When faced with mounting civil or criminal court fines, fees, and interest-"court debt," as broadly defined-people may consider turning to the bankruptcy system to deal with that debt. Every year, about a million people file bankruptcy, seeking to discharge most of their debts. Although most court debt is categorically nondischargeable, bankruptcy's discharge may provide people struggling with court debt a way to wipe the slate somewhat clean so they have a better chance of paying such debt. Also, people who file bankruptcy under chapter 13--one of the two most common chapters filed by consumers are entitled to a so-called "superdischarge" that provides for the discharge of a few categories of debt that are not dischargeable in chapter 7.These categories include certain debts that fall under a broad definition of court debt.

Thus, for some people, filing bankruptcy may help them avoid incarceration because of their inability to pay court debt. Failure to pay court debt may also result in driver's license suspension, which can lead to job loss, further exacerbating people's debt problems. Bankruptcy law likewise may require that license suspensions be lifted. The threat of incarceration, license suspension, and job loss is particularly acute for racial minorities and economically vulnerable individuals-the very people at high risk of plunging into "socially undesirable debt spirals" that may lead them to consider bankruptcy.

In addition to whether bankruptcy will relieve them of their pressing debts, people who think about filing as an option to deal with their court debt face another, less obvious concern about filing bankruptcy. The consumer bankruptcy system itself is part of the court-debt machine and may perpetuate the inequalities that lead people to need to turn to it for help.

Every year, the number of bankruptcy cases filed is twice the number of other cases filed in federal courts. For example, in 2017, debtors filed about 790,000 bankruptcy petitions; in comparison, about 395,000 cases were filed in federal district courts and courts of appeal." The vast majority of these bankruptcy petitions are filed by consumer debtors, meaning that filing and other fees paid by the people who file bankruptcy are an important source of funds for the federal judiciary.

Of perhaps more concern, filing bankruptcy is so difficult that to succeed, the vast majority of people need to retain an attorney." But bankruptcy attorneys are expensive. Related to this expense and attorneys' crucial role in facilitating people's access to consumer bankruptcy, research shows that the system itself replicates economic and racial inequalities in society." Although filing bankruptcy on balance may help people deal with court debt and other debts, as detailed in Part I, the barriers that people face to filing, discussed in Part II, raise questions about the accessibility of civil courts and suggest that the consumer bankruptcy system itself is yet another place in which race (and to a lesser extent, economic class) matters in accessing the law's benefits.

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