ABSTRACT
Structural inequalities in the United States have led to millions of Americans struggling to pay their bills each month. A single emergency – a sick child, an unexpected car tow, or a reduction in hours at work – can force a low-income household to the brink of financial disaster, risking eviction and overindebtedness.
Such inequalities can be traced to a range of historical, economic, legal, and socio-political factors. Meaningful reform efforts are hampered by the power and influence of special interest groups. The adequacy of even limited government assistance is thwarted by a poverty of thinking about effective and efficient system development. The public-benefits infrastructure does not provide what is required by those in need, instead: processes are complex, application instructions are confusing, eligibility requirements are convoluted, and waits are long. Moreover, these programs have no institutionalized mechanisms or fiscal incentive structure to coordinate among themselves. These programs are siloed and have a single-problem focus, which leads to fragmented responses and truncated interventions that fail to recognize and address the interconnectedness of the myriad issues that thwart self-sufficiency and financial stability. The stories and perspectives of the benefit recipients – all of whom lack political and economic power – fail to be credited.
This Article focuses on how the law’s relationship with economic and political systems has dire effects upon communities at the local level. By challenging the ineffectiveness of these existing systems, this Article spotlights the stark inequalities in our society. This Article further recognizes the bankruptcy system’s limitation as a remedy for debt relief and observes that bankruptcy is not a substitute for effective policies and programs that help the poor navigate financial crises.
Lupica, Lois and Neumann, Zach, Thwarting the Inevitability of Over-Indebtedness (October 30, 2023).
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