Non­profit helps the poor elim­i­nate debt for free by avoid­ing steep le­gal fees

Har­vard grad skips law school to build non­profit that as­sists peo­ple in fil­ing Chap­ter 7 with­out a lawyer

Chicago Sun-Times - - FRONT PAGE - MAUDLYNE IHEJIRIKA,

Ro­han Pavuluri was a sopho­more at Har­vard Univer­sity, with plans to at­tend law school, when he came across “a nag­ging prob­lem in Amer­ica that got me re­ally, re­ally an­gry.”

“It’s when I was ex­posed to the re­al­ity that if you can’t af­ford a lawyer in this coun­try, you don’t have ac­cess to the same le­gal rights as ev­ery­one else,” says the 24-year-old North Sider, founder of Up­solve, a start-up help­ing the poor elim­i­nate debt for free.

“This ap­plied to so many ar­eas of poverty law — if you’re evicted from your home, if you need a re­strain­ing or­der from an abu­sive spouse, if you are sued for debt, if you need to file for bank­ruptcy. In each of th­ese cases, you have no right to a free lawyer,” Pavuluri noted.

“As a re­sult, there are mil­lions of low-in­come and work­ing-class fam­i­lies in Amer­ica that can­not ac­cess the le­gal rights they’re guar­an­teed,” he said. “We’ve de­signed an en­tire le­gal sys­tem on the as­sump­tion ev­ery­body can af­ford a lawyer — which makes no sense in ar­eas of law where if you can af­ford one, you wouldn’t have le­gal prob­lems in the first place.”

With a dual in­ter­est in tech­nol­ogy and law, Pavuluri homed in on the poverty law area he thought ripe for re­form. In­di­vid­ual bank­ruptcy, na­tion­wide, costs an av­er­age of $1,200 to file, and over 90 per­cent of such fil­ings are linked to un­em­ploy­ment/job loss, med­i­cal crises and di­vorce, “prob­lems that could hap­pen to any­one, es­pe­cially at a time when over 50% of this coun­try is liv­ing pay­check to pay­check,” Pavuluri said.

Upon grad­u­at­ing Har­vard with a de­gree in sta­tis­tics, Pavuluri skipped law school to in­stead build what’s be­come the na­tion’s largest non­profit help­ing the poor elim­i­nate debt for free.

Launched in 2018, the web app, very much like Turbo Tax, walks an in­di­vid­ual through the many com­pli­cated forms needed to file a Chap­ter 7 bank­ruptcy on their own.

To date, Up­solve has helped clear over $225 mil­lion in debt for nearly 4,000 low-in­come fam­i­lies na­tion­wide, in­clud­ing, since March, more and more Amer­i­cans who are cit­ing fi­nan­cial hard­ship be­cause of COVID-19 as rea­sons be­hind bank­ruptcy fil­ings.

“I’d be­come very in­ter­ested in find­ing a way to use tech­nol­ogy to help peo­ple solve their own prob­lems, be­cause most tech­nol­ogy com­pa­nies are fo­cused on help­ing rich com­pa­nies get richer and the com­fort­able be­come even more com­fort­able,” said Pavuluri, who in 2018 made Forbes mag­a­zine’s 30 Un­der 30 list of in­no­va­tors in the area of law and pol­icy.

“I didn’t find a whole lot of non­prof­its out there build­ing tech­nol­ogy to help low-in­come and work­ing­class peo­ple im­prove the qual­ity of their lives,” he said. “And in many ways, th­ese are com­mu­ni­ties that have been left out of the tech­no­log­i­cal progress of the last 30 years.”

Fed­eral bank­ruptcy laws of­fer in­di­vid­u­als a Chap­ter 7, which erases debts, or a Chap­ter 13, which re­or­ga­nizes debt into more man­age­able pay­ments over an ex­tended pe­riod.

How­ever, Chap­ter 13 bank­rupt­cies can re­sult in a cy­cle of new crises and pay­ment de­faults by an in­di­vid­ual, fol­lowed by re­in­state­ment of steep ac­crued in­ter­ests, court-yank­ing of bank­ruptcy protection­s and mul­ti­ple Chap­ter 13 fil­ings — par­tic­u­larly for low-in­come per­sons of color — as re­vealed in a block­buster 2017 in­ves­ti­ga­tion by ProPublica.

“Chap­ter 13 has a re­ally high fail­ure rate, which means peo­ple who were hop­ing for relief aren’t able to get it,” Pavuluri said. “Peo­ple are pushed into Chap­ter 13 be­cause it per­mits at­tor­ney fees to be paid af­ter fil­ing, vs. Chap­ter 7, where fees are re­quired up­front.”

The award-win­ning so­cial en­ter­prise, which has 10 em­ploy­ees and of­fices in Chicago and New York, is backed by such en­ti­ties as the fed­er­ally funded Le­gal Ser­vices Corp., The Lawyers Trust Fund of Illi­nois, Grand Vic­to­ria Foun­da­tion and Su­san Crown Ex­change.

“Just like cor­po­rate bank­ruptcy, the per­sonal ver­sion is a tool that al­lows low-in­come and work­ing­class fam­i­lies to also re­cover from un­ex­pected fi­nan­cial shocks. It is a tool that al­lows them to be able to reen­ter our econ­omy,” Pavuluri said.

“And what a cruel irony in Amer­ica, that it costs some­body who is trapped in tens of thou­sands of dol­lars in debt $1,200 to tell the court that they have no money.”

The quickly grow­ing non­profit last year was win­ner of Fast Com­pany’s 2019 World Chang­ing Ideas Awards, in the so­cial jus­tice cat­e­gory. The com­pe­ti­tion draws 2,000 sub­mis­sions in 17 cat­e­gories. This year, it made Fast Com­pany’s “10 Most In­no­va­tive Not-for-Profit Or­ga­ni­za­tions of 2020.”

“To me, this was a civil rights in­jus­tice that peo­ple weren’t re­ally talk­ing about. We must face the re­al­ity that we will never have enough free lawyers for ev­ery­one who wants or needs one,” the mil­len­nial said.

“So that’s the mis­sion of Up­solve, to pro­mote a new civil right in Amer­ica — that ev­ery­one should have the right to safely solve their own le­gal prob­lem. We feel like judges and leg­is­la­tors across this coun­try need to re­design our courts in ar­eas of poverty law around the as­sump­tion that peo­ple can’t af­ford lawyers, and we think this should be a bi­par­ti­san is­sue,” he said. “We be­lieve that we can in­spire institutio­nal change within Amer­ica’s le­gal sys­tem.”

“THERE ARE MIL­LIONS OF LOW-IN­COME AND WORK­ING-CLASS FAM­I­LIES IN AMER­ICA THAT CAN­NOT AC­CESS THE LE­GAL RIGHTS THEY’RE GUAR­AN­TEED.” RO­HAN PAVULURI, 24, founder of start-up Up­solve, Illi­nois’ largest bank­ruptcy non­profit

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