Cultural Diversity in Bankruptcy Law
- Cultural diversity often suggests issues of race and ethnicity, but these are not the sole cultural factors that apply to bankruptcy law. Legal culture and how it varies from nation to nation is one important consideration. Bankruptcy laws may also cater to diverse religious cultures or elements that exist in a society.
Significance of Culture
- Different legal cultures protect workers with varying effectiveness. A study by Morgado and Garoupa indicates that civil law systems (like France) do a better job than common law systems (such as the U.S. and U.K.) because the laws are more static. Other legal systems encourage cultural diversity in managing businesses. In cases in Greece and Switzerland, religious influences have provided more bankruptcy-safe enterprises than secular-minded competitors or peers.
- Statistics have shown that cultural minorities suffer worse during bankruptcy than their white counterparts. This is partly based on minorities choosing chapters of bankruptcy that offer less frequent discharges. Even when this is the case, minorities were even "less frequently" awarded bankruptcy status at all. Trends of this sort are particularly prominent among blacks and Hispanics who apply for Chapter 13.