Group Sues N.Y. to Allow Non-Lawyer Volunteers to Represent Consumers in Collection Suits

A company that helps consumers file for bankruptcy protection has filed a lawsuit against the state of New York, alleging that the state is violating the First Amendment of the Constitution by requiring consumers to have a licensed lawyer represent them when defending themselves against debt collection lawsuits.

The suit seeks to pave the way for the company — Upsolve — to be able to train volunteers like social workers and community organizers to help consumers who are sued for unpaid debts.

“Despite this need for legal assistance, the vast majority of debt collection defendants in New York lack legal representation and many face default judgments as a result,” according to the complaint. “Many low-income debt collection defendants cannot afford to pay for a lawyer to represent them in their case. And free lawyers are in too short supply to meet the immediate needs of many individuals in low-income communities.”

A copy of the complaint can be accessed by clicking here.

In New York, about 95% of consumers who are sued for unpaid debts are not represented by an attorney, and 88% of consumers did not respond to the suit, often resulting in a default judgment against them. “What we have isn’t legal rights under the law,” said Rohan Pavuluri, the founder of Upsolve, in a published report. “What we have is legal rights if you can afford a lawyer.”

Upsolve has created a “justice advocate training guide” that would be used to help volunteers walk consumers who are being sued for unpaid debts. Individuals who attempt to practice law without a license could be charged with a criminal misdemeanor. Upsolve’s suit seeks to carve out an exemption for its program rather than overturn the rule. Non-lawyers who pass an exam are currently allowed to work with individuals filing claims for workers’ compensation, the suit notes.

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