A large investigation by ProPublica last fall uncovered a shocking fact: debt collectors target minorities; in particular, African Americans. Debt collection lawsuits were revealed to be much more common in minority communities in the large metropolitan areas where the investigation was led. Major metropolitan cities like St. Louis, MO; Chicago, IL, and Newark, NJ all showed a disparity between the numbers of debt collection lawsuits in black vs. white neighborhoods, even when accounting for earnings. The rates of judgement were twice as high in mostly black neighborhoods than mostly white ones. The rates of garnishment were also high among low-income workers; workers earning less than $25,000-$40,000, the average salary range targeted for garnishment, were being targeted nearly as often.
Despite both groups reporting similar levels of debt and repayment rates, African Americans are much more likely to be contacted by debt collection agencies. In 2013, a survey conducted by the NAACP Economic Department and Think Tank Demos found that, despite not being any more likely to be late on making payments or to declare bankruptcy, black debtors are nearly twice as likely to receive calls from bill collectors than white ones. They also have twice as many debt collection lawsuits filed against them by collectors.
These findings suggest a racial bias in the way that collectors try to collect debt. One of the authors of the Think Tank report pointed out that “African-American households are more likely to have been called by bill collectors because they are more likely to have blemishes on their credit history that would send debts to collection agencies.” This is the result of the unfortunate correlation between minorities and low credit scores. Black Americans demonstrate lower credit scores than white Americans, a gap that widened during the financial crisis.
In the past few years, debt collection has become more burdensome to people struggling with debt, as more companies turn to courts to recover negligible amounts. Hundreds of collection suits gather on the desks of local judges every day by companies attempting to garnish wages. This leads to devastating effects on households in predominantly black communities such as Jennings, MO, where the ProPublica investigation was primarily focused.
The average income for a family in Jennings is approximately $28,000/ year. In this community alone, over 1 lawsuit per every 4 residents occurred between 2008 and 2012. At this income level, it becomes tricky to prioritize spending. When garnishment hits the effects snowball into larger and larger debt, especially when emergencies like health complications or job cuts strike. Wage garnishment allows collection agencies to take up to a quarter of a worker’s net income.
Many of these families are the target of abusive debt collectors, who at times attempt to collect debts that are not even legitimate. The Fair Debt Collection Practices Act was created in 1977 to protect consumers from vicious tactics used by debt collectors. If you feel you are being targeted because of your race, or are facing a debt collection lawsuit, or are having your wages garnished without having been notified of a lawsuit, The Law Offices of Jibrael S. Hindi will fight for you. We are a team of attorneys who specialize in consumer law in Fort Lauderdale. In many instances, you can counter-sue the collectors and win damages for the burden they have caused. Put an end to the harassment and get paid! Call 1-844-JIBRAEL or contact us online today for a free consultation.