Upsolve is Automating Bankruptcy for Debtors But Does it Work?

Upsolve is Automating Bankruptcy for Debtors But Does it Work?

Upsolve is a technology-based 501(c)(3) legal aid nonprofit organization founded in 2016.  The company was formed to help low-income people with burdensome debt get a “fresh start” at no cost by creating a software platform that allows them to file for Chapter 7 bankruptcy.  Users are prompted through a series of questions regarding their financial situation, debts, and assets.  This information is then automated onto bankruptcy forms which are reviewed by either pro-bono attorneys at legal aid organizations or Upsolve attorneys. Upsolve partners with legal aid organizations with the goal of increasing the number of low-income clients the organizations can assist by automating and streamlining the bankruptcy process. 

Traditionally, most pro-bono attorneys from legal aid organizations meet with clients to assess their financial situations, and if bankruptcy is the best course of action, provide them with questionnaires to fill out and instructions on how to take the credit counseling course.  Once the clients have completed the questionnaires, they are scheduled for one-on-one forms clinics where volunteer attorneys review the completed questionnaires and relevant documents and prepare the bankruptcy petition and schedules using a software such as Best Case. The attorneys then review the completed petitions and schedules with the clients for accuracy and completeness and obtain the required signatures.  Clients are then given instructions on how to file the bankruptcy petitions with their local bankruptcy court and provided information about the 341 hearing, also known as the Meeting of Creditors.  

Upsolve automates this process, which, in theory, allows legal aid organizations to increase the number of clients they are able to assist.  First, users answer a series of questions to determine whether they are a good fit for Upsolve.  Some of these questions include a user’s ease with technology, the amount of their debt, whether they have filed their most recent tax return, and whether they have filed bankruptcy in the last eight years.  Next, users are required to answer a series of questions that takes approximately 60 minutes to complete.  They are then asked to upload relevant documents such as payment advices and tax returns from the last two years.  User responses are then auto-populated onto the bankruptcy petition and schedules.     

Legal Service Alameda, formerly the Alameda Bar Association Volunteer Legal Services Corporation, provides bankruptcy assistance to low-income Alameda County residents.  Legal Service Alameda was one of the first legal aid organizations to partner with Upsolve when it began using the software in January 2018.  According to Amarilis Medrano, Volunteer and Clinics Coordinator at Legal Service Alameda, Upsolve was initially viewed as a promising game-changer, creating a lot of excitement amongst its staff and volunteers. 

“Upsolve allowed clients to enter required information from the comfort of their homes. They could log in online and complete all steps virtually and then just come into our office for a final paperwork review with one of our volunteer bankruptcy attorneys,” she says.  Many of its younger and more tech-savvy clients found the software to be very convenient.  They could start the process and pause when necessary.  The greatest advantage of using the platform, according to Medrano, is that Upsolve offers a more streamlined service by auto-populating the bankruptcy forms based on responses provided by the clients.  Prior to Upsolve, pro-bono attorneys at Legal Service Alameda would spend time filling in the bankruptcy forms themselves, including listing creditors and debts taken from the client’s credit report.  This was a time-consuming process especially if a client had a long list of debts.  Upsolve also reminds clients to complete their credit counseling course and the certificate of completion is automatically uploaded onto the software. 

While Upsolve first proved promising, Medrano and the pro-bono attorneys began to see some issues with the software.  Because many of the clients it serves are low-income and senior citizens without access to a computer or the internet, clients had to come into the clinic office to use its computers and staff had to spend time guiding them through the process.  Many of the clients did not have the tech skills required to navigate the software. The bigger challenge, however, was the fact that many clients did not understand the questions asked by the software. According to Medrano, “we began to notice that clients had a hard time understanding questions. They were either providing the wrong information or incomplete information. For us, this meant that our volunteer attorneys were actually spending more time fixing forms and making sure that clients disclosed all necessary information than they would usually spend had they themselves filled out the forms from the very beginning.”  

The volunteer attorneys also began noticing glitches with the software such as information not being auto-populated correctly.  Medrano also found that Upsolve’s eligibility guidelines were much different than Legal Service Alameda’s guidelines, and she attributes this to the fact that Upsolve is based in New York and the software is unfamiliar with California’s set of exemptions and requirements specific to the Northern District of California.  The software also could not be used to assist married couples and many of its clients are married couples filing jointly.  “This disconnect between Upsolve and the specific needs of each client and their situation also concerned us as this led to plenty of miscommunication between Upsolve and our clients,” says Medrano.     

After a trial period, Legal Service Alameda decided to stop using Upsolve and revert back to its original system, with its attorneys screening for eligibility and preparing the bankruptcy petitions and schedules.  In the end, according to Medrano, the organization’s main goal is to provide excellent legal services, which requires effective communication and the need for its own attorneys to oversee the progress of each client’s case.  “After weighing the pros and cons,we realized thatwe would be doing our clients a disservice if we continued using Upsolve.” said Medrano. “Considering that a large percentage of our clients are low-income and seniors in Northern California, we realized there is a greater need for a more personalized experience rather than a fast, impersonal one. We want to provide the best experience possible meaning that we are there to provide assistance every step of the way.”