Two recent studies suggest that the answer to this question is yes. The studies conclude that minority individuals are more likely to opt for bankruptcy under Chapter 13, as opposed to another form of debt relief. The study found specifically that black bankruptcy filers disproportionately chose Chapter 13 protection as compared with white bankruptcy filers. This was true even if they had the same income and lived in the same geographic location.

The studies unfortunately do not come to any conclusion as to why African-Americans were more likely to file for bankruptcy under Chapter 13. The study does suggest that racial discrimination may be at the heart of why they are opting for this form of bankruptcy and why minority filers may be the target of a pitch for Chapter 13.

Under Chapter 13 bankruptcy a payment plan is implemented over a period of three to five years. At the end of the bankruptcy, a portion of the debts will be discharged if the payments are made under the payment plan. Chapter 13 is a more complicated option than other forms of debt relief and requires more knowledge and effort. As a result, Chapter 13 actually tends to cost more money than other options.

Chapter 7 bankruptcy is another option for many low-income bankruptcy filers. In this scenario, assets are liquidated and debts are discharged. Chapter 7 generally costs less, and the end result is an elimination of all debt and a clean slate, without a payment plan. However, Chaper 7 bankruptcy is not always more advantageous for individuals with few assets.

The following are several legitimate reasons why someone might choose Chapter 13 over Chapter 7, regardless of their race:

· Not everyone qualifies for Chapter 7 protection.

· Past due mortgage payments can be added to a payment plan under Chapter 13 allowing mortgage debt to be discharged.

· Debts are partially repaid under Chapter 13, which may be more morally acceptable to some individuals.

People who are struggling financially have many options available to them that can help alleviate the burden of carrying substantial debt, including bankruptcy under Chapter 7 or Chapter 13. However, bankruptcy law is complex. One form of bankruptcy is not necessarily the answer for one group of filers. Determining what form of debt relief is most appropriate depends on the circumstances of each individual case.

Source: The Wall Street Journal, "Studies Find Racial Discrepancy in Chapter 13 Filings," Eric Morath, 12 May 2011