Free Legal Aid For Bankruptcy Filers

A non-profit firm called Upsolve enables many bankruptcy filers to pay nothing in legal fees.

Here’s the background: Chapter 7 bankruptcy attorneys usually require their clients to pay in full before filing the case. You cannot blame them…if a lawyer does not collect their fees up front, their bill could later be discharged along with the rest of the client’s debts.

This creates a big barrier for low-asset, low-income bankruptcy filers. They must come up with $2000 or more in cash before filing Chapter 7.

But now there is good news.

Upsolve was born in 2018 with seed funding from Harvard University, the Robin Hood Foundation, and the federal government through the Legal Services Corporation,

Upsolve has become the largest nonprofit in America for bankruptcy, with thousands of cases filed and over 2 million website visitors. Their software allows the client to fill out all the necessary forms.

Here are the best candidates for Chapter 7 assistance from Upsolve:

• They have more than $10,000 of dischargeable debt .
• Their credit score is already low (below 600).
• They are already facing wage garnishment or a debt collection lawsuit.
• They pass the means test because they earn under the median income in your state.
• They don’t see a way of being able to pay back their debt over the next five years.

Keep in mind: there are some individuals that Upsolve generally will not help, i.e.:

1. They own a home….Whether it involves catching up or modifying a mortgage,,Upsolve does not want to take any chances with people’s homes.

2. They earn above the median income for their state……  A sophisticated and in-depth means test analysis is then necessary to determine whether you qualify for Chapter 7 relief. This requires legal analysis and knowledge of highly localized norms and procedures that Upsolve cannot provide.

3.They have a pending personal injury lawsuit….If they have a possible recovery in a personal injury lawsuit when they file, the trustee may step in and settle the lawsuit, and then distribute some or all of the proceeds to the creditors.

In any event, here is what Upsolve will help you do without a lawyer:

1. Collect your documents

2. Take the required credit counseling course

3. Complete the required bankruptcy forms

4. Get your filing fee ready or fill out a fee waiver request

5. Print your completed bankruptcy forms

6. Go to the court to file your forms

7. Mail required documents to your trustee

8. Take the second required bankruptcy course on financial management

9. Attend the 341 meeting with your trustee

10. Deal with your car loan if you have one.

Next Step: Assistance in Fighting Lawsuits

Upsolve also wants to aid low‐​income individuals who are sued for unpaid debts.

Each year, 4 million Americans are sued over debts—but the vast majority can’t afford legal representation. As a result, at least 70% of them lose by default, without the court even considering the facts of the case.

In response, Upsolve has trained a group of non-lawyers to provide free legal advice on whether and how to respond to a debt collection lawsuit.

The barrier here involves state laws – which typically forbid anyone who is not a licensed lawyer from providing legal advice, no matter how straightforward and simple. That the advice is correct and desperately needed is not a defense under the law.

That’s where a recent lawsuit comes in. A  federal judge  blocked New York from enforcing its unpaid-legal-advice laws against Upsolve’s volunteers.

Judge Paul Crotty noted that Upsolve volunteers did not want to “file pleadings, represent clients in court, or handle client funds,” all activities that can more plausibly be described as a mixture of speech and conduct. Instead, Upsolve volunteers will only give advice outside a courtroom setting.”

Upsolve’s co-founder Rohan Pavuluri points out that there is ample precedent. In medicine, nurse practitioners and community health workers offer care in cases where a doctor isn’t needed. In emergencies, volunteer firefighters and EMTs train hard to help their fellow citizens in circumstances where every moment counts. Like these professionals, Pavuluri assures that Justice Advocates will be well-trained and held to high standards.

“The bottom line is that we will never have enough free lawyers to meet the demand. We don’t have nearly enough pro bono and legal aid lawyers — we don’t even have close to enough,” says Pavuluri. “The only way that we can ever achieve equal rights under the law is if we dramatically expand the supply of free legal assistance.”