They need legal debt advice. Should it come from lawyers?

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Reverend John Udo-Okon, a Pentecostal minister from the Bronx, has a lot of followers who are being chased by debt collectors and don’t know what to do.

Like most of the millions of Americans sued each year for consumer debt, followers of Pastor Udo-Okon generally cannot retain the services of an attorney. When they don’t respond to the lawsuit, they lose the case by default.

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

Pastor Udo-Okon would like to become a volunteer counselor and help people defend themselves against these lawsuits by participating in a training program created by Upsolve, a nonprofit financial education and civil rights organization. The program would teach him how to guide people through the first steps of fighting a consumer debt lawsuit.

But there’s a catch: offering advice on how to fight a suit would probably be illegal. New York rules, like most states, prohibit the practice of law without a license, and giving personalized advice on how to respond to litigation is generally considered the practice of law.

On Tuesday, Upsolve took a step to undo the trap: it filed a complaint against the state attorney general’s office in Manhattan federal court, arguing that preventing non-lawyers from giving the kind of basic advice Upsolve would teach them to offer would violate the First Amendment. Pastor Udo-Okon is a co-applicant.

Upsolve says a ruling in its favor would pave the way for thousands of lay professionals — social workers, clergy, community organizers, and more. – to help correct a gigantic imbalance in the legal field.

According to a Pew Charitable Trusts 2020 Report, at least four million Americans are sued each year for consumer debt. Less than 10% use lawyers and more than 70% of cases end in default judgments against the defendant.

In 2018 and 2019, a total of 265,000 consumer debt lawsuits were filed in New York City and District civil courts. More than 95% of the defendants were unrepresented by an attorney, and of those, 88% did not respond to the complaint, according to figures from the state court system.

Upsolve co-founder Rohan Pavuluri called the situation a “fundamental civil rights injustice”.

“What we have are not legal rights under the law,” he said. “What we have are legal rights if you can afford a lawyer.”

New York Attorney General Letitia James’ office did not immediately respond Tuesday morning to a request for comment on the lawsuit and a question about whether the aid Upsolve wants to offer would violate rules on the practice not authorized by law. The New York State Bar Association, which represents attorneys, said it would not comment on pending litigation.

In America, consumers are served with lawsuits alleging non-payment of all kinds, whether for phone bills or aquariums. The most common subjects of debt collection lawsuits include medical bills, credit card balances, and auto loans.

Americans don’t rightfully owe most of the debt they’re being sued for, consumer advocates say. A Legal Aid Society 2010 Report found that in more than a third of the debt collection cases examined, the debt had already been paid or was the result of mistaken identity or identity theft; the limitation period for the collection of the debt had expired; or the debt had been remitted into bankruptcy. ACA International, a trade group for debt collectors, did not immediately respond Tuesday to a request for comment on the report from the Legal Aid Society.

Marshal Coleman, a seasoned Manhattan consumer attorney, said most consumer debt lawsuits are for cases of a few thousand dollars. “Generally, if a client like this comes to see a lawyer,” he said, “a lawyer will not be able to help him because the fees will exceed the value of the debt.”

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

Faced with the daunting prospect of battling a suit on their own, many people just ignore it and hope it goes away.

A New York State Law demands that a subpoena announcing legal action include a statement containing no less than 14 exclamation points: DON’T THROW IT OUT!!” it screams. He later continues, “IF YOU CAN’T PAY YOUR OWN LAWYER, BRING THESE PAPERS TO THIS COURT IMMEDIATELY. THE CLERK (PERSONAL APPEARANCE) WILL HELP YOU!!”

The invitation does not contain any information on a multiple choice form that you can fill out with 24 possible defenses. Some, like “I dispute the amount of the debt”, are simple. Others are more legalistic and contain terms such as “unreasonable” and “cowards”. The form is only available in English.

This is where Upsolve hopes to step in. The non-profit organization has produced a 18-page “Justice Advocate Training Guide” for volunteer advisors. The guide includes a script that explains each of the boxes on the status form in plain language and instructions to help the respondent complete it.

the New York one court rules make one criminal offense for someone who is not a registered attorney licensed to practice law. Upsolve’s lawsuit argues that coming together to provide and receive free legal advice is a form of speech and association covered by the First Amendment.

The prosecution does not seek to overturn the rules. Instead, he’s asking the court to assess Upsolve’s volunteer advisor program and grant it protection. The lawsuit notes that New York allows non-lawyers who pass an exam to represent workers’ compensation claimants.

Upsolve also argues that applying the rules on the unauthorized practice of law to its volunteer advisers would “harm the very interests” the rules are meant to promote: protecting consumers from fraud and preserving the integrity of the justice system.

Laurence Tribe, the liberal legal icon who led an access to justice initiative at President Barack Obama’s Justice Department, said in an interview that requiring a law degree to help someone complete a simple form is largely used to protect lawyers from competition. He said of the Upsolve lawsuit, “If you want a test case to bring reason as well as constitutional values ​​to a process in which the legal profession has outstripped both, that’s it.”

The Upsolve lawsuit contains affidavits from people who say they would have benefited greatly from free legal help.

Liz Jurado of Bay Shore, NY, received notice in 2019 from the Suffolk County Sheriff’s Office regarding a bill for an epidural she had received while in labor more than a decade prior.

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

When she gave birth, the doctors “gave me no choice and said, ‘Oh, by the way, it’s not covered’ – there was no mention of insurance,” he said. she stated.

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

“If I could have afforded the attorney’s fees, I would have just paid the bill,” she said.

Christopher Lepre, 48, a technician at a Long Island power plant, sent ‘several emails to numerous attorneys’ asking for help after he received a default judgment demanding nearly $16,000 for a loan for a Used and guaranteed SUV that he had bought.

No one called back, he said.

His salary has been garnished by more than $1,000 a month since the start of last year for the SUV, which stopped working three months after it was purchased.

“In a few months it will be paid off, but I still have all that money left,” Mr Lepre said. “I will never get it back.”

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