New Books in Economics
Melissa B. Jacoby, "Unjust Debts: How Our Bankruptcy System Makes America More Unequal" (New Press, 2024)
Dec 13, 2024
Melissa B. Jacoby, Graham Kenan Professor of Law, dives into the complexities of America's bankruptcy system. She explains how it serves the wealthy while leaving marginalized communities more vulnerable. The discussion reveals how racial disparities in bankruptcy impact Black Americans and exacerbate economic inequality. Jacoby also highlights the preferential treatment corporations receive and the need for reforms to ensure fairness. Her insights illuminate the connections between bankruptcy and broader social justice issues, making a compelling case for systemic change.
49:23
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Quick takeaways
- The bankruptcy system disproportionately burdens Black individuals, often relegating them to less beneficial repayment plans rather than debt cancellation options.
- Corporate bankruptcies benefit from lenient treatment, allowing for greater debt cancellations while shielding executives from personal liability in contrast to individual filers.
Deep dives
Understanding Bankruptcy Basics
Bankruptcy serves as a mechanism for individuals and entities that cannot meet their financial obligations. It exists to manage the claims of multiple creditors while offering a fresh start to honest debtors. The process typically involves the filing of a petition where various types of debts may be addressed, with common practices including Chapter 7 and Chapter 13 filings for individuals. These chapters allow for the liquidation of assets or the creation of repayment plans, respectively, although they come with various challenges, especially in terms of costs and requirements for legal representation.
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