Chapter 7 bankruptcy can be a savior for low-income Americans with few other options.
Jonathan Petts has seen its power firsthand. For years, Petts did pro bono consumer bankruptcy on the side while working as a corporate bankruptcy attorney for a large law firm in New York.
“I was amazed at the impact these cases made,” Petts says. “People’s lives were being changed forever, and they were going on to get better jobs and become productive members of society. Chapter 7 bankruptcy really does change people’s vision of what’s possible in the future.”
But Petts’ experience also taught him that filing for bankruptcy can be a complicated and, unless you get access to the small pool of pro bono lawyers, expensive process.
With those obstacles in mind, Petts set out to simplify the bankruptcy process using technology, eventually partnering with software developers Rohan Pavuluri and Kevin Moore to found Upsolve last year.
Upsolve is a non-profit that walks users through each step of the bankruptcy process, automating as much as possible to save time and headaches with a system Petts describes as “the TurboTax for bankruptcy.”
Upsolve’s platform uses simple cartoons to teach users about bankruptcy and help determine which path makes the most sense for them. Users then take an online survey that auto-populates official bankruptcy forms, which are sent to pro bono lawyers working at legal aid clinics that have partnered with Upsolve.
“We created one web page for users with all of the steps baked in,” Petts says. “Basically it offers seven steps to get a fresh start, and only one of them involves getting a lawyer, so we’re taking all of this information and consolidating it.”
The result is an expedited process for everyone involved. Rather than meeting with a lawyer to complete each step, users can gather documents and enter information on their own terms, while lawyers are presented
with near-complete bankruptcy documents in PDF form to review.
“The bankruptcy process can be amazingly inefficient,” Petts says. “It usually costs around $2,000 to hire a lawyer, and as my clients tell me all the time, ‘If I had that kind of money I wouldn’t be filing for bankruptcy.’”
Petts estimates the company’s service is taking what’s typically a six to ten hour process for attorneys and making it less than two hours.
“Right now legal aid clinics have far more people reaching out to them than they can serve, so our goal is to multiply the number of clients they can serve in the same number of pro bono attorney hours,” Petts says.
Petts also hopes that by making the hours more manageable, more attorneys will volunteer their services.
“Attorneys like to do pro bono work, but they like to do bite-sized projects, not ten hour things,” Petts says. “By shortening this process we’re making it much more attractive for attorneys.”
The company’s creative approach to such an entrenched problem is a reflection of the team’s unique and wide-ranging skillset. Pavuluri, who was majoring in statistics and computer science at Harvard before taking a leave to work at Upsolve, is described by Petts as a “force of nature” when it comes to product development.
Moore, meanwhile, earned his law degree from Washington University and worked as a lawyer for two years before changing careers to become a software developer. Today, Moore is an experienced full stack developer who’s been essential in creating Upsolve’s easy-to-navigate front end.
The company grew out of a research project at Harvard's Access to Justice Lab. The founders also spent time at Harvard's i-lab, and recently won one of the Harvard President's Innovation Challenge grand prizes of $75,000. But, for the first five months, the founders essentially worked for free to bring their vision to life. Then the Robin Hood Foundation, a prominent New York-based charitable organization, gave them funding and space to work in its incubator Blue Ridge Labs.
Robin Hood’s support suddenly gave the company resources and legitimacy (the latter a crucial element as the team looks to partner with legal aid clinics across the country), and the founders developed a prototype to use in a trial with Brooklyn residents.
“One of the most important things we did was test [the software] with low income folks in Brooklyn filing for bankruptcy,” Petts says. “We were meeting with those people everyday, and we realized which questions were too complicated or needed to be changed. In each one of those cases, the beta product got better.”
By the end of the trial, the Upsolve team had helped 40 residents file for bankruptcy and was confident their product was ready to scale.
By October, the company plans to be offering services in more than 20 states, and within a year Petts hopes Upsolve will be operating in all 50 states. Importantly, the founders are being helped along by an impressive advisory board that includes federal bankruptcy judges, law professors and partners from some of the biggest law firms in New York.
The company’s bold plans should sound like music to the ears of overwhelmed legal aid clinics and the thousands of pro bono bankruptcy lawyers across the country, but the biggest beneficiaries of the company’s success will be the people who are using the service to change the trajectory of their lives.
“Our mission is to make a fresh start available to thousands of folks around the country who are buried in this cycle of debt and poverty,” Petts says. “We want to be a tool to bring people out of that cycle so that they can fulfill their potential as human beings.”
Images courtesy of Upsolve.