{"id":4470,"date":"2021-03-04T09:38:27","date_gmt":"2021-03-04T14:38:27","guid":{"rendered":"https:\/\/hedgehogsandfoxes.org\/?p=4470"},"modified":"2021-03-04T09:38:27","modified_gmt":"2021-03-04T14:38:27","slug":"mothers-of-redemption","status":"publish","type":"post","link":"https:\/\/hedgehogsandfoxes.org\/index.php\/2021\/03\/04\/mothers-of-redemption\/","title":{"rendered":"Mothers of Redemption"},"content":{"rendered":"

Jessie Allen, School of Law, University of Pittsburgh<\/a><\/p>\n

Book the Second, Chapter 31: Of Title by Bankruptcy<\/em><\/a><\/p>\n

This chapter<\/a>\u00a0is about how law makes bad things good. Bankruptcy turns bad behavior into personal renewal; unpaid debts become a way to make good on the social promise of security. Law is full of these perverse transmutations \u2013 perhaps symbolized in the way Justice\u2019s blindfold makes a virtue of disability. But alchemizing redemption from transgression turns out to be a tricky business. There\u2019s persistent conflict between creditors\u2019 rightful expectations and borrowers\u2019 relief, and doubts about a debtor\u2019s character cloud the opportunity to become \u201ca clear man again.\u201d II, 484\u00a0 Only individuals of \u201chonest and ingenuous disposition\u201d are entitled to escape their obligations through bankruptcy.\u00a0Id.\u00a0<\/em>\u00a0In Blackstone\u2019s England, separating these deserving folks from ones whose financial problems come from \u201cmisconduct and extravagance\u201d seems to have hardened the borders of a rigid class hierarchy. In the U.S. today it deepens the tectonic rift of race.<\/p>\n

Blackstone\u2019s tale of transformative improvement begins with the law itself.\u00a0 He describes the historical swing of bankruptcy from ancient Rome\u2019s \u201cterrible law\u201d (debtors were chopped to pieces), to the too-lenient system \u201cintroduced by the Christian emperors,\u201d to the current English\u00a0 statutes that \u201cmore wisely, have steered in the middle between both extremes. \u201d II, 473 The moderate English system confers protection \u201cnot only on the creditors, but also on the bankrupt or debtor himself.\u201d II, 472 Thus the law achieves a delicate balance \u201ccalculated for the benefit of trade, and founded on the principles of humanity as well as justice,\u201d II, 473, a compromise position much approved by Blackstone who, after all, self-identified as a \u201cMan of Moderation<\/a>.\u201d<\/p>\n

This Goldilocks version of bankruptcy is the sort of thing that drove Blackstone\u2019s great contemporary critic, Jeremy Bentham, crazy. Bentham trashed Blackstone\u2019s \u201ceverything is as it should be\u201d approach to law as a fairy tale spun to fool credulous English citizens into believing in an irrational legal system that utterly failed to deliver justice. Like Bentham, I\u2019m put off by the\u00a0Commentaries<\/em>\u2019 moderate approval of the moderate common law, but I doubt my distaste has much to do with justice. Blackstone\u2019s moderation reminds me of my mother.<\/p>\n

Like Blackstone, my mother was nothing if not moderate, and tended to accent the positive.\u00a0 When I was young, her self-containment, and her great, but always properly modulated, enjoyment of small things \u2013 a perfectly ordinary piece of crusty bread, the thin lip of a good coffee cup \u2013 used to infuriate me. Even when, near the end of her life, dementia unleashed her pleasures from conventional limits, they never became intense or volatile, but simply spread \u2013 calmly \u2013 across the entire world. \u201cOh, look at that beautiful red,\u201d she\u2019d say, pointing to a traffic light. Bentham saw Blackstone\u2019s moderate, optimistic view of law as a lie, a way to cover up law\u2019s conflicts and biases, or a foolhardy failure to recognize them. But over the course of the last decade or so, I\u2019ve come to think that Bentham missed the moral ambiguity of Blackstone\u2019s work, just as I took my mother\u2019s calm for shallowness and missed the conflict beneath her smooth surface. And I almost think that working my way through Blackstone\u2019s thoughts has helped recalibrate my judgment of my mother. I even wonder if I began reading \u2013 or kept reading \u2014 these off-putting books because something in them reminded me of the mild maternal opacity that so frustrated me. And you know those traffic lights really are a beautiful color.<\/p>\n

Blackstone\u2019s placid approval of English bankruptcy law gets troubled as he struggles to justify who is eligible for debt relief.\u00a0 In the system he describes, bankruptcy is reserved for tradespeople \u2013 merchants of one kind or another. The mercantile economy is based on \u201cmutual credit on both sides,\u201d so debts are \u201cnot only justifiable, but necessary.\u201d II, 474 Because a trader depends on credit, he is exposed to \u201caccidental calamities,\u201d a ship that goes down in a storm, or, more prosaically, another merchant or customer\u2019s failure to pay. Bankruptcy is compromise that gives back something to the people owed without utterly destroying the tradesman whose inability to pay up comes \u201cthrough misfortune and not his fault.\u201d\u00a0\u00a0Id.<\/em><\/p>\n

Blackstone stresses that bankruptcy is only for \u201cactual\u00a0traders.<\/em>\u201d II, 473 Just because you buy on credit doesn\u2019t mean you can resolve unpaid debts through the bankruptcy process. Farmers, for instance, don\u2019t qualify, even though they have to buy seed and sell what they grow, because buying and selling is only instrumental to their real occupation, which is \u201cto manure and till the ground, and make the best advantage of its produce.\u201d II, 475\u00a0 An innkeeper is likewise out of luck, \u201cthough he may buy corn and victuals to sell again at a profit,\u201d because \u201cthat no more makes him a trader than a schoolmaster or other person is, that keeps a boarding house and makes considerable gains by buying and selling.\u201d II, 476<\/p>\n

Now, hang on, though, wait a minute. Why is it wrong, or undesirable, for someone who is not exclusively a \u201ctrader\u201d to rely on credit?\u00a0 Blackstone\u2019s explanation that \u201ctrade is not their principal, but only a collateral, object\u201d is really no explanation at all. II, 475 They probably do less buying and selling than full-time merchants, but so what?\u00a0 Why should that justify excluding them from bankruptcy relief?\u00a0 Don\u2019t we want them to be able to buy in bulk at good marginal prices in quantities that they might be unable to afford without credit?\u00a0 And if something goes amiss somewhere in this chain of credit, surely it is no more the innkeeper\u2019s or farmer\u2019s fault than the full-time tradesman\u2019s. All this looks even stranger when you consider that in Blackstone\u2019s day, bankruptcy wasn\u2019t a process borrowers could initiate, but something\u00a0done to them<\/em>\u00a0by creditors trying to get back some of what they were owed.\u00a0 From the point of view of a wholesaler or shopkeeper who hasn\u2019t been paid, it hardly matters whether the deadbeat is another merchant or a farmer.<\/p>\n

One possible explanation emerges when Blackstone almost offhandedly adds that letting farmers go bankrupt might allow them to avoid paying overdue rent, depriving landlords \u201cof the security which the law has given them above all others.\u201d\u00a0 II, 475 \u00a0In eighteenth-century England landowning was still the bedrock of social and political power.\u00a0 Any law that disrupted landlords\u2019 control of their tenant farmers threatened to destabilize the class hierarchy.<\/p>\n

But keeping a gentle boot on a tenant\u2019s neck can\u2019t explain why bankruptcy was not available to the landed gentry themselves. And according to Blackstone, they are also to be excluded. In fact, Blackstone reserves his harshest words for members of the upper classes who deal on credit: \u201cIf a gentleman or one in a liberal profession, at the time of contracting his debts has a sufficient fund to pay them, the delay of payment is a species of dishonesty . . . .\u201d II, 474 On the other hand if he incurs debts but \u201chas no sufficient fund\u201d with which to pay them off, \u201cthe dishonesty and injustice is the greater.\u201d\u00a0Id.<\/em>\u00a0A gentleman who gets into trouble borrowing \u201ccannot . . . murmur if he suffers the punishment which he has voluntarily drawn upon himself.\u201d\u00a0Id.<\/em><\/p>\n

Then again, maybe denying upper class people bankruptcy relief does serve to keep the familiar social hierarchy in place, not by benefiting wealthy individuals, but by preserving the apparent naturalness of existing class boundaries.\u00a0 Perhaps some unlucky rich borrowers need to be sacrificed to keep doubt from creeping in about the inevitability and morality of a social structure based on class differences that are ostensibly stable and transparently real.<\/p>\n

There is an anxiety about authenticity here. Using credit to support an upper class lifestyle, and especially borrowing and then being unable to pay, casts doubt on the idea that the folks at the top really are different from the folks at the bottom.\u00a0 A real gentleman has funds to support an extravagant lifestyle or, if he doesn\u2019t, he accepts diminished economic circumstances as a badge of dignity. By declining to pretend that his income is higher than it actually is, he establishes that\u00a0 social status does not depend on shifting external factors. Merchants who borrow are not pretending to be something they are not, they are simply doing what \u201cactual traders\u201d do. But professionals and gentlefolk who borrow to support their lifestyle undermine the integrity of the upper classes. They make it seem like performing a show of wealth is as good as being an actual gentleman, or, worse, that the performance is all there is to it.<\/p>\n

You might think the old English law\u2019s restrictions on eligibility and Blackstone\u2019s anxious attempt to police those social boundaries distinguish the bankruptcy process he describes from the system we have in the U.S. today. But on closer view, there are some haunting similarities.<\/p>\n

Unlike the system Blackstone describes, bankruptcy in the U.S. today is not formally restricted to any particular social group. But individual bankruptcy relief in the U.S. follows two quite different procedural tracks under two different statutes known as \u201cChapter 7\u201d and \u201cChapter 13,\u201d often with very different results.\u00a0\u00a0Chapter 7<\/a>, or \u201cliquidation\u201d bankruptcy is a relatively simple, fast-moving process in which debtors hand over their property (with some exemptions, e.g., an inexpensive car and retirement accounts). The property is sold, and the proceeds are distributed among the registered creditors. In practice, the process usually is made even simpler by the reality that most families who file under Chapter 7 have no significant assets to turn over. The result is that a few months after filing about 96% of Chapter 7 debtors emerge from bankruptcy with all their unpaid medical bills and unsecured consumer debt discharged. Pro Publica<\/p>\n

In contrast,\u00a0Chapter 13\u00a0<\/a>bankruptcy enrolls petitioning borrowers in a three- to five-year court supervised payment regimen. I know little to nothing about bankruptcy law, but one thing that comes through clearly from people who do is that the difference between the Chapter 7 and Chapter 13 is stark. Bankruptcy is never going to be pleasant, but Chapter 13 is far more disruptive to people\u2019s lives and requires much greater submission to public process.\u00a0 As one\u00a0bankruptcy judge explains<\/a>, \u201cChapter 13 is no walk in the park. It requires public disclosure of every aspect of your life, examinations under oath by a trustee and creditors, allowing creditors to haul you into court on any objection, and relinquishment of control of your financial life for up to five years. If you falter, your case will be dismissed and you will lose the entire benefit of the bankruptcy law.\u201d A pair of social scientists puts it more succinctly:\u00a0 \u201cChapter 13 filing is substantially more costly, more time consuming, and less likely to discharge debts than a Chapter 7 filing.\u201d\u00a0(Morrison, Pang and Uettwiller at 270<\/a>).<\/p>\n

Here\u2019s the main thing you need to know about Chapter 13 bankruptcy relief:\u00a0 Most of the time it doesn\u2019t work.\u00a0 About two thirds of Chapter 13 filers never manage to complete the process. They wind up still saddled with the debt that drove them into bankruptcy in the first place.\u00a0Id.<\/em><\/p>\n

Theoretically anyone with an income higher than the state median must use Chapter 13. That rule is the result of legislative reforms in 2005 that were driven by an attempt to tighten what was seen as Chapter 7\u2019s too easy-going process. As Senator Chuck Grassley declared at the time, Chapter 7 allowed \u201canyone to get free debt cancelation . . . with no questions asked, even if they have the means to pay off their debts.\u201d (Cong. Rec., Lawless 356)\u00a0 But, despite the new means test, perhaps because of exemptions for necessary expenses, bankruptcy filers under Chapter 7 and Chapter 13 are still mostly in the same general income bracket. There is, however, another salient difference. Black Americans who file for bankruptcy are much more likely to use Chapter 13 than Americans of other races. Around 55% of African American bankruptcy debtors file their cases under Chapter 13, compared with only about 27% of other filers.\u00a0\u00a0ABI Commission on Consumer Bankruptcy Report at 159<\/a>.<\/p>\n

On the face of it, African Americans\u2019 overrepresentation in Chapter 13 makes no sense.\u00a0 The legal factor forcing bankruptcy filers into Chapter 13 is higher income, and White Americans typically have higher incomes than Blacks ($76,057 v. $45,438 median annual household income in\u00a02019)<\/a>.\u00a0 Theoretically, Chapter 13 allows debtors to preserve valuable assets.\u00a0 Again, though, that would seem to favor White debtors on average, because the disparity in assets between White and Black Americans is even greater than the income gap.\u00a0 (Typical Black household wealth in\u00a02019\u00a0<\/a>was about one-eighth that of Whites.)<\/p>\n

So what is going on?\u00a0 One possibility is that exactly because wealth is less common among African Americans they are willing to do more to hold onto hard earned assets, and choose Chapter 13 in order to do so.\u00a0 But there\u2019s no evidence to back up this speculative just-so story.\u00a0 A recent empirical study of bankruptcy filings in Chicago offers a different explanation, finding that African Americans are more likely to need some specialized relief that Chapter 13 offers. Chapter 13 filers not only keep valuable property, they can force the return of some assets that have been seized, notably cars and driver licenses. The study authors conclude that, in the Chicago area, the racial disparity in Chapter 13 filers is due at least in part to the fact that \u201cAfrican Americans are more likely, on average, to experience debt enforcement actions, including seizure of a car or driver\u2019s license,\u201d and to live farther from their workplaces and so to have a greater need for a car and license in order to get to work.\u00a0Morrison et al. 272<\/a><\/p>\n

Some would attribute the higher rates of traffic and parking tickets among Black Americans to discriminatory law enforcement and explain longer commutes as the lingering effect of housing segregation due to the historic, and, in many cases lingering, exclusion of African Americans from many neighborhoods.\u00a0 See\u00a0Richard Rothstein<\/a>.\u00a0 Doubtless others would view the car study as confirming racial stereotypes, assuming that Blacks are more likely to commit traffic and parking offenses and to fall behind on car payments, in other words, to engage in the sort of selfish, irresponsible behavior that should not be exonerated by bankruptcy relief. Meanwhile, another study has turned up evidence that these sorts of stereotypical assumptions and discriminatory attitudes play a much more direct role in Chapter 13\u2019s racial imbalance.<\/p>\n

Three social scientists surveyed over 250 bankruptcy attorneys across the U.S., telling them, truthfully, that the researchers were studying \u201cattorneys\u2019 perspectives on bankruptcy and chapter choice.\u201d\u00a0Braucher, Cohen, Lawless.<\/a>\u00a0 What the lawyers were not told was that racial differences in chapter choice were the specific target. All the study participants received the same basic case file about a fictional couple with background facts that might reasonably lead a lawyer to recommend either Chapter 7 or Chapter 13. \u00a0But in some of the surveys the prospective clients were named Reggie and Latisha and went to Bethel AME church, while in others their names were Todd and Allison and they attended the First United Methodist Church.\u00a0 (A control group couple was identified only by initials and said to attend \u201cchurch.\u201d)\u00a0 The one other variation was that in some of the surveys the couple expressed a specific preference for either Chapter 7 or Chapter 13.<\/p>\n

The racial differences in the survey results were stark.\u00a0 Attorneys recommended Chapter 13 to Reggie and Latisha 47% of the time but only 32% of time for Todd and Allison.\u00a0Braucher et al. 22<\/a>.\u00a0 In fact, the bias toward recommending Chapter 13 for African Americans was strong enough that, based on otherwise identical facts, the attorneys actually recommended chapter 13 to the African American clients who expressed a preference for chapter 7 at a rate slightly higher than the rate for Whites who came in preferring chapter 13!\u00a0 There\u2019s more.\u00a0 The survey turned up striking differences in the attorneys\u2019 attitudes about Black and White clients\u2019 personal responsibility for their financial troubles.<\/p>\n

Attorney participants were asked to rate whether the couple seeking their advice had \u201cgood values.\u201d When hypothetical African\u2010American clients or clients with no distinguishing racial information expressed a preference for Chapter 7, the attorneys tended to rate them as having worse values than a couple who expressed no preference or a preference for Chapter 13.\u00a0 As the study authors note, \u201cPresumably, the couple\u2019s expressed preference for chapter 7 makes it more likely that attorneys will see them as illegitimately trying to escape paying off their debts.\u201d But for White clients, the results were reversed.\u00a0 Whites who preferred Chapter 7 were typically seen as having better values. Apparently, as the study authors observe, \u201ca white couple expressing a preference for chapter 7 does not raise as much suspicion of the couple\u2019s values,\u201d as it does for nonwhite couples.<\/p>\n

The idea that Black Americans\u2019 motives and values are always suspect is tragically familiar.\u00a0 It seems odd, though, that in Whites a preference for Chapter 7\u2019s quick relief was perceived as indicating better values as against other White couples who chose the harder, longer Chapter 13 process, which would ultimately pay back more of what they owed. It\u2019s as if Whiteness confers a positive entitlement to a \u201cfresh start\u201d that is not only deserved but somehow required for the good of others.\u00a0 Braucher et al. 27 In this view, deserving (White) debtors who find themselves in financial trouble not only could, but should, take advantage of a legal method that will quickly free them from their obligations. Talk about making bad things good!<\/p>\n

It strikes me that we may be seeing here the re-emergence of bankruptcy law as a device for shoring up shaky social boundaries. In eighteenth-century England, concerns for the resilience of a hereditary class structure show up in Blackstone\u2019s worries about gentlemen acting like tradesmen, perhaps triggered by what historian Wilf Prest describes as that society\u2019s \u201ccomplex web of overlapping interactions between commercial, landed, and professional worlds.\u201d\u00a0Wlliam Blackstone Law and Letters in the Eighteenth Century\u00a0<\/a>17 In the U.S. today, almost everyone would insist that we devoutly wish to put an end to racial inequity.\u00a0 But undeniably, the bi-polar division of African-Americans and Whites continues to be one of the most basic ways in which our social world is ordered, and one of the deepest, and most fraught, social fault lines. Perhaps it should be no surprise, then, that bankruptcy would be called upon \u2013 along with practically every other legal structure \u2013 to police that racial line.<\/p>\n

If this structuralist account captures some similarities in the otherwise quite different eighteenth-century English and current U.S. bankruptcy regimes, Blackstone\u2019s concerns about bankruptcy\u2019s class limits and my focus on its racial effects may have something else in common. Oddly, it\u2019s our relationships with our mothers.\u00a0 My own interest in racial equity is undoubtedly traceable both to the horrifically racist world where I grew up on Chicago\u2019s South Side, and to the influence of my mother, whose belief and participation in civil rights, like everything else about her, was quiet, careful, and utterly consistent and unyielding.\u00a0 Likewise Blackstone\u2019s insistence that authentic gentility required paying all one\u2019s debts may be traceable to his mother\u2019s example.<\/p>\n

Blackstone\u2019s father, who died before Blackstone was born, was a silk merchant, who Blackstone described as \u201ca London tradesman, not of great affluence.\u201d\u00a0 Prest 14\u00a0 His mother, came from \u201ca family of minor landed gentry,\u201d who had recently purchased, rather than inherited, their estate. Prest 16.\u00a0 Blackstone\u2019s father had a shop that besides trading in silk, sold some retail goods, such as \u201cbelts, sashes, cord, gloves and lace.\u201d Prest 15 When he died, Blackstone\u2019s mother took over a business with debts that greatly exceeded its assets. Apparently, she was up to the task. She acquired a partner, printed up business cards (\u201cMary Blackstone and William Hay: At the Blew Boar near the Conduit\u201d), and managed to turn things around. At her death\u2014sadly, when Blackstone was only eleven\u2013she left a thousand pounds to be divided amongst her late husband\u2019s creditors, explaining that she was not \u201cintirely satisfied how strictly justly I might proceed by quite excluding\u201d them from the estate. Prest 20\u00a0 It is easy to imagine the eleven-year-old Blackstone attributing this gift (from funds that otherwise would have been partly his) to his mother\u2019s noble character. \u00a0Prest comments that Blackstone\u2019s own \u201csense of personal responsibility\u201d may have been \u201cpart of his mother\u2019s legacy.\u201d\u00a0 21<\/p>\n

It\u2019s also possible that Blackstone saw his mother\u2019s insistence on paying her debts as evidence of authentic nobility on one side of his family tree, a notion that may have made it easier for him to imagine himself worthy of the much elevated status he eventually attained. Blackstone climbed the social ladder through a combination of luck, extraordinary literary ability, hard work, and enormous drive.\u00a0 Doubtless he reveled in his personal success and celebrity.\u00a0 But no matter how much one longs to be recognized for one\u2019s unique talents and accomplishments, in the end most of us also want to see ourselves enmeshed in social and familial networks that connect our achievements to others, that make us, among other things, our mothers\u2019 children.<\/p>\n

Originally Published on February 15, 2021.<\/a><\/p>\n\n

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Jessie Allen, School of Law, University of Pittsburgh Book the Second, Chapter 31: Of Title by Bankruptcy This chapter\u00a0is about how law makes bad things good. Bankruptcy turns bad behavior into personal renewal; unpaid...<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[268,255,79,492],"tags":[490,489,132,200],"class_list":["post-4470","post","type-post","status-publish","format-standard","hentry","category-jurisprudence","category-law-and-philosophy","category-news","category-william-blackstone","tag-jurisprudence","tag-law-and-philosophy","tag-news","tag-william-blackstone"],"jetpack_shortlink":"https:\/\/wp.me\/pasVL2-1a6","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/posts\/4470","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/comments?post=4470"}],"version-history":[{"count":1,"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/posts\/4470\/revisions"}],"predecessor-version":[{"id":4471,"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/posts\/4470\/revisions\/4471"}],"wp:attachment":[{"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/media?parent=4470"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/categories?post=4470"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgehogsandfoxes.org\/index.php\/wp-json\/wp\/v2\/tags?post=4470"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}