Giving Compass' Take:

• Adele Peters explains how the nonprofit Upsolve is using technology to help people in bankruptcy to help them recover from debt. 

• How can funders help to support scalable solutions like this one? 

• Learn about building prosperity


When she was laid off from a job in the Bay Area and had to move out of state to care for a sick relative, a woman named Shyra struggled financially. She found a new job, but it only paid $8 an hour, and after some unexpected expenses, she was soon deep in debt. She eventually moved back to California and found a better job, but learned that her wages would be garnished to begin paying off her debt–after excessive interest rates, a staggering $50,000.

Shyra, who asked to withhold her last name, later met with a lawyer to talk about declaring bankruptcy, which could cancel her debts, but learned about the paradox of the system: The process is so expensive that the people who need it most can’t afford the legal fees to file the necessary paperwork. “It didn’t make sense that [the lawyer] would charge me $4,000 when I’m struggling to even pay my bills,” she says. She thought that bankruptcy wouldn’t be an option. But she then learned about a new, quickly growing nonprofit that uses software to fill out and file the paperwork at no cost for low-income clients. She used the technology, and her family got a new start.

The ability to file for bankruptcy and reorganize your debts is an incredibly powerful tools to help struggling low-income people overcome financial hardship, but the complexity of the process shuts many people out. It requires 23 jargon-heavy forms, and it’s not something that someone can easily accomplish on their own–but people who need it can’t often afford lawyers to help them. “We exist so that we can help people maintain a decent livelihood where they don’t starve and they don’t end up on the street,” says Rohan Pavuluri, CEO and cofounder of Upsolve, a nonprofit that makes a Turbo Tax-like web app of the same name. “They don’t have any money to afford a lawyer.” In total, he says, roughly 20 million low-income Americans could potentially benefit from bankruptcy, whether they’ve landed in debt from medical expenses, the loss of a job, or predatory loans.

Read the full article about automating bankruptcy to help people clear their debts by Adele Peters at FastCompany.