They Need Legal Advice on Debts. Should it come from a lawyer?

Bishop John Udo-Okon, a Pentecostal minister in the Bronx, has a lot of parishioners sued by debt collectors and doesn’t know what to do.

Like most of the millions of Americans who get sued for consumer debt each year, Pastor Udo-Okon congregations often can’t retain attorneys. When they fail to respond to the lawsuit, they default to losing the case.

“They don’t know how to fight back; they just give up, only they find out that their credit has been destroyed,” said Pastor Udo-Okon.

Pastor Udo-Okon wants to become a volunteer counselor and help people defend themselves against these lawsuits by participating in a training program run by Upsolve, a nonprofit for financial and civic education. right to create. The program will teach him how to guide people through the first steps of opposing a consumer debt lawsuit.

But there’s a trick: Giving advice on how to combat a suit can be illegal. Rules in New York, as in most states, forbid the practice of law without a license, and giving individual advice on how to deal with lawsuits is generally considered practice. lawyer.

On Tuesday, Upsolve took a step toward undoing the catch: File a lawsuit against the state attorney general’s office in federal court in Manhattan, arguing that barring attorneys who were not legally authorized to give the kind of basic advice Upsolve taught them to give would violate the First Amendment. Pastor Udo-Okon is a co-plaintiff.

Upsolve says a ruling in its favor would clear the way for thousands of lay professionals — social workers, clergy members, community organizers and the like — to help correct the massive imbalance. in the legal playing field.

According to a Report Pew Charity Foundation 2020At least four million Americans each year are sued for consumer debt. Fewer than 10 percent retain attorneys, and more than 70 percent of cases end in default judgments against the defendant.

In 2018 and 2019, a total of 265,000 consumer debt collection lawsuits were filed in the city and county civil courts in New York State. More than 95% of defendants are not represented by an attorney, and of those, 88% have not responded to the lawsuit, according to data from the state court system.

Upsolve’s co-founder, Rohan Pavuluri, calls the situation a “fundamental civil rights injustice.”

“What we have is not a legal right,” he said. “What we have is the legal right if you can afford to hire a lawyer.”

The office of New York’s attorney general, Letitia James, did not immediately respond Tuesday morning to a request for comment on the lawsuit and a question about whether the assistance Upsolve wants to offer violates rules on practice law without a license or not. The New York State Bar Association, which represents the attorneys, said it would not comment on pending litigation.

In the US, consumers are served with allegations of non-payment of all kinds, whether it’s phone bills or aquariums. The most common objects of debt collection kits include medical bills, credit card balances, and auto loans.

According to consumer advocates, Americans are not legally indebted to most of the debt they are sued for. ONE Legal Aid Association 2010 Report found that in more than a third of the collection cases reviewed, the debt was paid either through identity confusion or identity theft; the statute of limitations for debt collection has expired; or the debt has gone bankrupt. ACA International, a trade group for debt collectors, did not immediately respond on Tuesday to a request for comment on the Legal Aid Association report.

Marshal Coleman, a veteran consumer attorney in Manhattan, says that most consumer debt lawsuits involve several thousand dollars. “Typically, if such a client goes to a lawyer,” he said, “an attorney will not be able to help them because the fees will exceed the value of the debt.”

There are legal aid organizations that provide free representation to low-income people, but they tend to focus their very limited resources on other issues, like domestic violence protection orders. family, eviction and foreclosure. Legal Services NYC, the city’s largest provider of free civil legal services, has 450 attorneys on staff. Only one person focuses on consumer debt.

Faced with the daunting prospect of having to fight a suit on their own, many people simply ignore it and hope it goes away.

ONE New York State Law request a summons notice of a lawsuit that includes a sentence with no less than 14 exclamation marks: “THIS COURT PAPER – ONE SUMMER! DON’T MISS IT!! ” it shouted. It then continued, “IF YOU CANNOT PAY FOR YOUR OWN AGENT, BRING THIS DOCUMENTS TO THIS COURT. CLERK (PERSONAL APPEARANCE) WILL HELP YOU!! ”

The summons does not include information about a multiple choice forms that you can fill out with 24 defensive abilities. Some, like “I dispute the debt”, are simple. Others are more legalistic and contain terms like “unreasonable” and “deceptive”. The application form is available in English only.

This is where Upsolve hopes to come. Non-profit organization created a 18 pages of “a guide to training advocates of justice” for volunteer advisors. The instructions include a script that explains each box on the state form in plain language and instructions to help the respondent fill it out.

New York’s judicial rules turn it into misdemeanor to a person other than a registered and licensed attorney to practice law. Upsolve’s lawsuit argues that jointly providing and receiving free legal advice is a form of First Amendment speech and association.

The suit does not seek to overturn the rules. Instead, it asked the court to review Upsolve’s volunteer mentoring program and provide a defense for it. The lawsuit notes that New York allows attorneys who pass the exam to represent workers’ compensation claimants.

Upsolve also argues that applying unauthorized practice rules to its volunteer consultants would “hinder the very good” the rules are meant to promote: protecting consumers from fraud lie and protect the integrity of the justice system.

Laurence Tribe, liberal legal icon who heads the access to justice initiative in President Barack Obama’s Justice Department, said in an interview that asking for a law degree to help someone fill out a simple form, largely to protect attorneys from competition. He said of Upsolve’s lawsuit, “If you want a test case that brings sanity as well as constitutional validity to a process where the legal profession has surpassed both, this is it.”

Upsolve’s suit contains affidavits from people who say they would greatly benefit from free legal aid.

Liz Jurado of Bay Shore, NY, received a notice in 2019 from the Suffolk County sheriff’s office regarding the epidural bill she was given during labor over a decade ago. .

Ms. Jurado, 45, who works at DoorDash, said she was never sued, but the notice said there had been a default judgment against her and that she owed an anesthesiologist more than $12,000.

When she gave birth, the doctors “didn’t give me a choice and said, ‘Oh, by the way, this isn’t covered’ – there was no talk of insurance,” she said.

The debt forced Ms. Jurado into bankruptcy. She said that even if she had known about the lawsuit before the default judgment was made, she couldn’t have had the thousands of dollars a lawyer had charged her to help her fight it.

“If I could afford the attorney fees, I would just have to pay the bill,” she said.

Christopher Lepre, 48, a technician at a Long Island power plant, sent “several emails to multiple attorneys” seeking help after receiving a default judgment requiring a loan of nearly $16,000 for a used, warrantied SUV he bought.

No one called back, he said.

His salary has been cut by more than $1,000 a month since the beginning of last year for the SUV, which was decommissioned 3 months after he bought it.

“In a few months, that money will be paid off, but I have not paid it all yet,” Mr. Lepre said. “I’ll never get it back.”