New Yorkers sued by debt collectors can now get legal advice from non-lawyers

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New Yorkers facing debt collection claims are willing to get some extra help following a federal court ruling, and some observers say it could be a victory for consumers around the world. country that have basic legal issues but cannot afford a lawyer.

Upsolve, a non-profit organization that allows people to file for bankruptcy on their own for free, wanted to create a program that would allow non-lawyers to give basic advice to New Yorkers facing debt collection actions. third party debt lenders and buyers.

The board would include tips on how to fill out a one-page response form so that borrowers who are represented can avoid default lawsuits as a result of failure to respond to a lawsuit. Default lawsuits can lead to foreclosure wages, unpleasant credit reporting issues, and potentially bankruptcy. According to court documents, the volunteers would offer counseling after the training.

These cases may make up a quarter of the case load in New York, and many are answered, Upsolve said in court documents.

But in keeping with New York State’s rules against unauthorized law enforcement – and specifically the prohibition on non-lawyers from offering legal advice – Upsolve sued to prevent the state from enforcing them against the organization. and any trained volunteers. He also sued a Rev. Bronx who wanted to give advice on debt collection lawsuits to community members.

New York District Judge Paul Crotty on Tuesday granted a preliminary precautionary measure that prevented the New York Attorney General’s Office from enforcing rules, for the time being, on unauthorized legal practice against plaintiffs or its volunteers when it came to legal advice on debt. collection context.

Crotty said the plaintiffs had a protected right to free speech to give advice, and state rules on unauthorized legal practice were not sufficiently limited. In addition, the judge added, the program “would help alleviate an avalanche of unanswered debt collection cases, while mitigating the risk of ethical harm or consumption.”

Crotty stressed that his protections would not apply if volunteers deviated outside the confines of his training. The attorney general’s office has not announced any plans to sue the program, Crotty said. The office did not immediately respond to a request for comment.

While people are guaranteed the right to a defense attorney in criminal cases, regardless of the size of their portfolio, there is no such guarantee for civil lawsuits, including those related to debt collection, and attorneys’ fees. lawyers can be prohibitive.

“If you’re poor and can’t afford a lawyer, you live in a different legal system than everyone else,” Rohan Pavuluri, CEO of Upsolve, told MarketWatch. The verdict was “a big step” for the concept of equal justice, Pavuluri said, but declined to comment on any broader application.

Concerns about “unintended consequences”

Between the filing of the January lawsuit and this week’s decision, the case drew attention and reports from friends of law professors, advocacy groups, and legal service providers. Many supported Upsolve’s bid, but some opposed it.

“We are disappointed with the decision and remain concerned about the unintended consequences of relegating low-income New Yorkers and black New Yorkers to an out-of-the-ordinary legal counsel model without outside control or liability,” said attorney Matthew Brinckerhoff. , which represents organizations such as Legal Services NYC.

“A better solution would be to crack down once and for all on predatory debt collection practices, such as the sewer service, which turn our courts into debt collection factories,” he said.

Groups supporting Upsolve’s bid said cash-strapped litigants needed help, and state rules on occupational licensing were set in motion, as they were in other states. .

Robert McNamara, a senior lawyer at the Institute for Justice, a nonprofit libertarian law firm, said the ruling strengthened arguments in pending cases in other courts to challenge the licenses of dietitians, counselors and veterinarians.

“The government cannot silence people just because it is abstractly concerned that something bad will happen if people listen to them,” he said.

Of course, a faulty attorney, faulty legal documents, and unscrupulous representation can seriously harm people.

But McNamara said the sentence did not allow such a thing and that legal licenses were not in jeopardy. The profession involves drafting legal documents, court arguments and other duties beyond offering advice, he noted.

In addition, McNamara added, people without legal licenses offer their two legal cents all the time. “It’s only offered to rich people, and the person giving the advice is a business director or a financial consultant,” he said.

Another organization that supported Upsolve’s motion was Fordham Law School’s National Center for Access to Justice.

“The Upsolve case makes it clear that in virtually every state in the country, the judiciary and the legal profession should quickly consider the possibility of repealing the old laws that still make it a crime, to this day, for people to talk to each other. about the law. ”David Udell, the organization’s chief executive, told MarketWatch.

“Just as we are all free in this country to give us basic medical advice on whether to choose between Advil and Tylenol, Upsolve’s decision holds that we are also free to give ourselves basic legal advice, e.g. “Tell the landlord to return a security deposit, ask an employer to pay overtime, or appear in court on a certain day,” Udell added.

Of course, some New York-based legal services organizations had doubts about Upsolve’s efforts. The legal system could certainly use more services for low-income people, but there was not necessarily a “shortage” of services, court documents said. Organizations seldom, if ever, turned down people in need of help in responding to debt collection demands, they added.

People without a law degree help with the job, including paralegals and law students who are trained and supervised, they said.

Other states, such as Arizona and Utah, allowed very limited cases in which non-lawyers could help a person in a legal bond, Upsolve’s lawyers said.

The big difference, the opposing organizations said, was that “Upsolve’s proposed model clearly contrasts with these non-advocacy regimes, which are subject to oversight and regulation aimed at ensuring standards and protecting the public.”

Pavuluri doesn’t see it that way. “There is no way to achieve equal rights under the law if we do not expand the supply” of people who can help, he said.

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