Bankruptcy

Debt Slavery? Correlation of Slavery with Chapter 13 Filing Patterns

By Adam Levitin

Looking at Bob's posting of chapter 7 and 13 filing rates, I couldn't help but notice the correlation between high chapter 13 filing rates and states in which slavery was legal until 1863 (the "South" broadly speaking). The 11 jurisdictions with the highest rate of chapter 13 filings (and all of those with over half the filings being 13s) were slave states. The top 9 (and but for Lincoln imposing martial law in Maryland, the top 11) states were all part of the Confederacy. With a few of exceptions, all former slave states were in the top 15.

What are we to make of this this correlation?

Correlation, of course, is not causation, but this correlation certainly raises some interesting questions (and perhaps eyebrows). Local legal culture is certainly an important factor in variation in 7/13 filing rates, but this is more than local variation. There appears to be a distinct regional pattern. (There also appears to be another pattern of low chapter 13 rates in the upper great plains.)

Despite this post's title, I do not believe that high chapter 13 rates in the South have any causal relationship with slavery (or sharecropping for that matter). For starters, we do not know the racial breakdown of the 7/13 rates by state. It's also hard to see how that causal link would work--court supervised use of income for 3-5 year is totally different from plantation slavery. Instead, I suspect that they may both relate to other factors endemic in the South, perhaps distinct cultural attitudes about debt. (David Hackett Fischer's classic Albion's Seed: Four British Folkways in America, shows very convincingly just what distinct regional cultures exist in America and how old their roots are.)

To be sure, chapter 13 (or XIII) originated in the Northern District of Alabama in the early 1930s before finding its way into the 1938 Chandler Act. But that's just one district, and it seems unlikely that the popularity of 13 in Northern Alabama would spread throughout the entire South, including DC, Maryland, and Delaware (heck, if it is popular in Northern Alabama, that should almost guarantee that it will be unpopular in Lower Alabama).

I'm curious what readers' thoughts are on this. How do we explain the correlation of high chapter 13 rates and the South?

Full post as published by Credit Slips on January 02, 2008 (boomark / email).