Upsolve CEO explains the ‘cruel irony’ of the bankruptcy system
Upsolve CEO Rohan Pavuluri sits down with Yahoo Finance Live to talk about accessibility to guidance through the bankruptcy process, the app's assistance in relieving users' debt, and the tech innovators and figures who are backing this service.
ALEXIS: Going into debt to get out of debt-- it's a problem millions of Americans face when navigating bankruptcy. But one company, Upsolve, found a way to work around that. Here to talk about it is Yahoo Finance senior editor Adriana Belmonte and Upsolve CEO Rohan Pavuluri. Over to you, Adriana.
ADRIANA BELMONTE: Thanks, Alexis. Rohan, thank you so much for joining us today. I guess to start off, why don't you tell us a little bit about how this app works and how it came about.
ROHAN PAVULURI: Of course. All right. So I started Upsolve when I was an undergrad in college. I was helping people who couldn't afford lawyers access their rights. There's this huge problem in America, which is if you fall into a lot of debt, you have this tool that's available to you in bankruptcy. But it actually costs a lot of money-- an average of $1,500-- to hire a lawyer in order to file for Chapter 7 bankruptcy so that you can relieve your debt and re-enter the economy.
And a lot of people are just too broke to file for bankruptcy. It's this cruel irony that we make you pay so much. So I learned about that problem, and set out to help low income families who couldn't afford lawyers access the bankruptcy system. So they could get back on their feet, start working again, build their credit. And that was the genesis of Upsolve.
ADRIANA BELMONTE: So I know that you guys aren't limited to just one specific type of debt. It varies from credit card debt, student loans. But what are the most common types that you see among your users?
ROHAN PAVULURI: So most people in America need to file for bankruptcy after facing a financial shock, like losing their job, medical emergency, or a family breakup. Those account for over 90% of bankruptcies. So most people who come to Upsolve come to us because they face one of these financial shocks. And the most common type of debt that people relieve using Upsolve is medical debt and credit card debt.
ADRIANA BELMONTE: Yes, medical debt, we've been seeing, is becoming more and more common among Americans. What is your success rate-- or, I guess, how successful have you been at getting these people to file for bankruptcy without having to go through these shocks like you mentioned?
ROHAN PAVULURI: Yeah. So the people who come to Upsolve they're already in 40, 50k in debt, and they're looking for a way to relieve their debt so they can re-enter the economy. And that's why they've come to Upsolve, because they can't afford a lawyer in order to access bankruptcy. So for people who use Upsolve-- over 98% of people who have used Upsolve to file their forms have been able to get a discharge and relieve their debt.
And we're now within about three years of launching nationally. We've relieved nearly half $1 billion in debt for low income families across America. And over 2 million people per year visit Upsolve to consume our free education.
ADRIANA BELMONTE: Now, I was looking into your organization a bit, and I saw that you guys are a non-profit. So can you explain a little bit about how the funding works, here? Where you guys get the money to help all these people.
ROHAN PAVULURI: Yeah, so the vast majority of our money comes from philanthropic funding. We've raised about $10 million from some really amazing people-- folks like Eric Schmidt, the CEO of Google; Jack Dorsey, the CEO of Twitter-- actually, wait, the former CEO of Google; Chris Sacca; Jim Breyer; the Hewlett Foundation; the Robin Hood Foundation; the Legal Services Corporation, which is the largest funder of civil legal aid in America, and gets its money from Congress. So we've been really lucky to have some really great people across foundations, individuals, and the government help fund our work.
ADRIANA BELMONTE: And my last question for you. Where can people find this app? Where can they access it if they are in need?
ROHAN PAVULURI: Yeah, you can go to Upsolve.org and consume the free education we have, see if we might be a good fit. And if you are, you can use the app to generate your form so that you can file for bankruptcy.
ADRIANA BELMONTE: All right. Well, thank you so much for taking the time to speak with us, today, Rohan. I'm going to toss it back to Alexis.
ALEXIS: All right. Some great information, there, guys. Thanks so much. Adriana Belmonte, we appreciate it.