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Poverty Solutions at the University of Michigan

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Systems and structures of poverty – the profit of debt

Household debt has been on the rise in the U.S. for the past three decades. These debts accrue in a variety of ways from attempting to climb the ladder of opportunity (student loans), seeking stability for one’s family (housing), making ends meet when money is tight (credit cards), getting sick or injured (healthcare), traveling to work (auto loans), or simply trying to keep the lights on (utilities). The growth of household debt is well studied, but what happens with that debt is far murkier and vital for understanding the contingent outcomes of indebted households and low-income communities.

How are debt collection strategies driving neighborhood instability for low-income residents? This question requires a systematic approach to understanding three particular areas:

  1. The relationship between the use of civil courts for collections, wage garnishments, and federal bankruptcy filing;
  2. The relationship between debt buyers and creditors; and
  3. The impact of debt on neighborhood stability pre- and post-bankruptcy.

By combining this data we will be able to generate the first systematic look at the ways in which
debt impacts low- and moderate-income housing markets in Detroit. This makes it possible to identify gaps in current policies where the full impact of debt collection strategies, legal remedies, and their impacts on low-income residents may not be fully considered.

Joshua Akers, University of Michigan – Dearborn
Eric Seymour, Rutgers University