How Does Race Impact Bankruptcy Filings in Ohio?
Racial factors considerably influence bankruptcy results in Ohio. Black residents are more likely to face higher rates of case dismissals, are often guided towards more difficult bankruptcy options, and generally have less wealth preserved post-bankruptcy.
The intersection of race and financial collapse is a complex and often overlooked aspect of economic inequality. In Ohio, systemic factors have created different economic realities for people of different ethnicities. Let’s look at the mechanisms that contribute to unequal outcomes for individuals and families seeking a fresh start.
Racial Disparities and Financial Distress in Ohio's Bankruptcy Filings
In 2024, Ohio experienced over 24,000 bankruptcy filings, marking a 17% increase from the previous year and the highest total since 2020, with the state ranking 27th among all 50 states regarding the financial distress experienced by its residents. [1], [2]
Ohio residents, particularly African Americans and Hispanics, are increasingly struggling with financial instability, manifesting through a significant rise in bankruptcy filings.
A variety of factors contribute to these financial hardships, including inflation and high personal debt levels. Rising housing costs and healthcare expenses further exacerbate this distress, compelling many Ohioans to seek bankruptcy as a last resort for financial relief.
Amidst these economic struggles, racial disparities in financial well-being become evident. Minority communities, particularly African American and Hispanic families, are disproportionately affected by these financial challenges.
In 2022, 59% of Black households, 47% of Hispanic households, and 47% of households led by multiracial individuals fell below Ohio’s ALICE (Asset Limited, Income Constrained, Employed) threshold, contrasting with 36% of White and 28% of Asian households. [3]
The unemployment rates are also notably higher among Black individuals in Ohio. By the close of 2023, the unemployment rate for Black workers stood at 5.8%, nearly three percentage points above that of their white counterparts.
This disparity has grown, with Black worker unemployment reaching 9.1% this year, compared to the state’s overall rate of 4.5%. [4]
Bankruptcy Filings in Ohio: A Focus on Racial Disparities
Bankruptcy Filings in Ohio involve a complex interplay of various factors, with race being one of the significant influences. In Ohio State, racial disparities manifest in economic opportunities, access to financial resources, and overall economic stability, impacting the likelihood of individuals and communities facing financial distress.
What is Bankruptcy?
Bankruptcy is a legal process designed to help individuals and businesses who cannot repay their outstanding debts. It allows them to either eliminate or restructure their debt under the protection of a federal bankruptcy court.
Bankruptcy offers debtors a fresh start and allows creditors to recover some funds. However, it can significantly impact a person’s credit and financial future.
The most common types of personal bankruptcy are Chapter 7 and Chapter 13. A Chapter 7 bankruptcy, often called a liquidation bankruptcy, involves selling certain non-exempt property to pay off creditors. In return, most of the individual’s unsecured debts are discharged, providing a clean slate in a relatively short period of time.
Conversely, a Chapter 13 bankruptcy is a “reorganization.” Instead of liquidating property, the individual proposes multi-year repayment plans to creditors, lasting three to five years. It is often used by people who want to keep secured assets like a house or car and have a regular income to make the payments.
Overview of Ohio's Bankruptcy Filings: Trends, Racial Disparities, and Economic Factors
Recent upticks in bankruptcy filings in Ohio indicate that economic pressures, inflation, and the expiration of relief programs are driving more households toward financial ruin. In 2024, the state reported 18,374 Chapter 7 bankruptcy filings and 6,333 Chapter 13 filings, reflecting a widespread economic strain. [5], [6]
Race and Systemic Financial Vulnerability in Ohio
In the U.S., minority individuals who file for bankruptcy are at a higher risk of having their cases dismissed without obtaining debt relief; this is 12.7% more for Chapter 13 and 2.3% more for Chapter 7 cases. This discrepancy stems in part from racial homophily, where people display a preference for those of their own race. [6]
In Chapter 13 proceedings, which grant trustees greater discretionary power, minority filers are 2.3% more likely to face case dismissal if overseen by a white trustee instead of a minority trustee. Black and Hispanic filers are the most affected by this systemic bias. [7] Ohio follows national trends when it comes to racial disparities in bankruptcy filings.
Contemporary Socioeconomic Disparities by Race in Ohio
One factor leading to black families filing bankruptcy includes the persistent income gap. For example, a 2019 analysis found that Midwest employers paid the median black worker just 75% of what they paid the median white worker. [8]
This wage disparity directly impacts a family’s ability to save, invest, and handle unexpected costs. It also leads to a greater reliance on credit to cover basic needs, which can quickly become unmanageable and lead down the path to bankruptcy court.
Racial Patterns in Ohio's Bankruptcy Landscape
Pinpointing the exact relationship between race and bankruptcy filings in Ohio is challenging due to data limitations; however, by combining national research with local demographic information, a clear picture emerges.
In Ohio, significant urban hubs such as Cuyahoga County (Cleveland), with 4,108 filings, and Franklin County (Columbus), with 2,721 filings, consistently report some of the highest numbers of bankruptcy cases in 2024. [9]
These counties also have the state’s largest African American populations. This correlation suggests that the financial distress is disproportionately concentrated in communities of color.
Pathways Towards a More Equitable Financial Future in Ohio
Policymakers in Ohio can work to address the root causes of financial instability. It includes strengthening consumer protections against predatory lending, promoting fair housing policies, and supporting initiatives that address the racial wage gap.
Within the bankruptcy system, exploring ways to reduce the upfront costs of Chapter 7 could provide more equitable access to the most effective form of debt relief for low-income individuals.
Non-profit credit counseling agencies and community-based organizations play a vital role. These groups can provide financial literacy education, help people create sustainable budgets, and offer trusted guidance before they reach a crisis point.
Expanding funding and access to these services, particularly in underserved minority communities, can provide a critical safety net and empower people to regain control of their finances.
If you’re in Ohio facing financial difficulties and considering bankruptcy, reach out to Richard West Law Office. Regardless of your race, we can guide you in filing the most appropriate bankruptcy to help restore your financial stability.
Sources:
[1] McNair, J. (2025, March 14). “Economic challenges” push more consumers and businesses to file for bankruptcy in Ohio. Canton Repository. https://www.cantonrep.com/story/news/local/stark-county/2025/03/14/bankruptcy-filings-increased-in-ohio-in-2024/78215491007/
[2] Perry, A. (2024, July 27). See where Ohio ranks for number of people in financial distress. The Enquirer. https://www.cincinnati.com/story/news/2024/07/23/ohio-money-rank-people-financial-distress/74508657007/
[3] Ohio United Way. (2024). ALICE IN THE CROSSCURRENTS: UPDATE. https://liveunitedcentralohio.org/wp-content/uploads/2025/01/2024-ALICE-Update-OH-FINAL.pdf
[4] Fox, R. (2024, August 28). Despite wage growth, Ohio workers face racial and gender pay disparities, study finds. WOSU Public Media. https://www.wosu.org/2024-08-28/despite-wage-growth-ohio-workers-face-racial-and-gender-pay-disparities-study-finds
UNITED STATESBANKRUPTCYCOURT & SouthernDistrictofOhio. (n.d.). 2024DistrictCaseFilings. In CasefilingdatacollectedthroughtheCourt’sCM/ECFsystem Ispublishedeachmonth. https://www.ohsb.uscourts.gov/pdffiles/statistics/2024%20Filings.pdf
[5] Court statistics | Northern District of Ohio | United States Bankruptcy Court. (n.d.-c). https://www.ohnb.uscourts.gov/court-info/court-stats
[6] Racial disparities and bias in consumer bankruptcy. (2025). [Journal-article]. https://sashaindarte.github.io/research/bk-bias-AIIP.pdf
[7] Hanauer, A. (2025, January 15). Race in the Heartland: Ohio in focus – Policy Matters Ohio. Policy Matters Ohio. https://policymattersohio.org/research/race-in-the-heartland-ohio-in-focus/
[8] McNair, J. (2025b, March 14). “Economic challenges” push more consumers and businesses to file for bankruptcy in Ohio. Canton Repository. https://www.cantonrep.com/story/news/local/stark-county/2025/03/14/bankruptcy-filings-increased-in-ohio-in-2024/78215491007/
