Feerick Center Releases CLARO Impact Report

March 09, 2012

Fordham Law's Feerick Center for Social Justice has issued a report on the impact of the CLARO volunteer lawyer project that aids consumer debtor defendants in New York City.  The CLARO Programs, under the auspices of the New York State Access to Justice Program, provide limited legal advice to unrepresented individuals in consumer debt collection cases filed primarily in New York City Civil Court. The Feerick Center helps administer the CLARO Programs in the Bronx, Manhattan, and Staten Island. 

Recent studies indicate that uninsured medical costs are a significant contributor to consumer debt and, in addition, that households that experience unemployment, loss of medical insurance, and unexpected illness also report higher levels of consumer debt.1 CLARO Programs involve collaborations among the courts, legal services organizations, bar associations, and academic institutions in the Bronx, New York, and Richmond Counties.2

The launch of the CLARO Programs has expanded to include additional projects. The Bronx CLARO Program has partnered with the Legal Services NYC’s NYC Bankruptcy Assistance Project. The Project has co-located an on-site bankruptcy paralegal who conducts initial orientations and screening of prospective clients.  Additionally, the CLARO Program is producing a video to expand the capacity of the CLARO Programs by raising community awareness about consumer debt collections, recruiting volunteers, and most importantly, by making litigants aware of the CLARO Programs and other resources for consumers. 

People served

Since the launch of the CLARO Programs, volunteers have assisted a remarkable number of consumers. In 2011, Bronx CLARO served 777 unique individuals, Manhattan CLARO served 357 unique individuals, and Staten Island CLARO served 89 unique individuals.  Bronx CLARO has served 1581 unique individuals since its launch in July 2009. Manhattan CLARO has served 1055 unique individuals since its launch in February 2008.  Staten Island CLARO has served 89 unique individuals since its launch in February 2011.

Significant numbers of CLARO visitors return for assistance over multiple sessions.  Volunteer attorneys at Bronx CLARO, Manhattan CLARO, and Staten Island CLARO had conducted a total of 3,957 consultations regarding 2,200 consumer debt lawsuits by the end of 2011.

Most CLARO visitors have very low incomes, and a significant number have income exempt from collection. In 2011, just half of visitors who provided information about their source of income were employed, and 24% of visitors received income exempt from debt collection. In 2011, almost half (46%) of visitors reported earning less than $22,000 per year.

1  Data from a recent survey study suggests that for many low-income and working poor families, medical debt is a significant contributing factor to consumer debt. See Demos, Sick and in the Red:  Medical Debt and its Economic Impact  2 (Oct. 2010) ("In 2008, more than one-half—52%—of indebted low- and middle-income households [surveyed in the study] cited medical expenses as contributing to their credit card debt."). In addition, not surprisingly, another survey study shows that households who have experienced economic shocks, such as bouts of unemployment, loss of medical health insurance, or an unexpected illness, are also more likely to have credit card debt. See Demos, Understanding the Debt Difference:  Why Some Low-and Middle-Income Working Families Have Credit Card Debt and Others Don’t 3 (Feb. 2011).

2  The Bronx CLARO Project involves a partnership among the Bronx County Bar Association, Fordham Law School’s Feerick Center for Social Justice, the New York City Bar, and the NYU Debtors’ Rights Project. The Manhattan CLARO Project is a partnership of the New York County Lawyers’ Association and Fordham Law School. The Fordham Law School participants include the Feerick Center for Social Justice, Lincoln Square Legal Services (the Law School’s clinic), and the Public Interest Resource Center’s Consumer Law Advocates Student Group. Staten Island CLARO is cosponsored by the Richmond County Bar Association, the Staten Island Women’s Bar Association, and Wagner College; it is coordinated by the Staten Island CLARO Steering Committee.