A Critical Race Theory Analysis of Bankruptcy's Political Development

Dominant explanations of bankruptcy's political development in the United States emphasize how the relatively concentrated interests of creditors and bankruptcy professionals combined with pro-debtor ideology to support the development of a uniquely liberal and comprehensive bankruptcy system. The dominant explanations elucidate much about bankruptcy's political development, but they do little to explain bankruptcy's racialized history and relationship with present-day racial inequality. In this paper, I use a Critical Race Theory (CRT) approach to expand our understanding of bankruptcy's political development. The analysis underscores the role bankruptcy played in converting dispossessed native land and the bodies and labor of enslaved people into financial assets for White families and how bankruptcy contributes to the racial wealth gap by facilitating predatory inclusion today. The paper concludes by considering contemporary proposals for bankruptcy reform in light of the analysis.