The following is a conversation between Rohan Pavuluri, co-founder and CEO of Upsolve, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in WNYM New York City.
Denver: Have you ever been in math class where you were so lost, you didn’t even know enough to ask a question? It’s a pretty helpless feeling. Another helpless feeling, but one far more serious, is when you need to file for bankruptcy, but don’t have enough money to do so. But an organization has come along that helps families in crippling debt file for bankruptcy for free. Its name is Upsolve, and it’s a pleasure to have with us tonight their co-founder and CEO, Rohan Pavuluri. Good evening Rohan, and welcome to The Business of Giving.
Rohan: Thank you so much for having me. It’s an honor.
…if you are a low-income family, you do not have the same rights as everyone else. If you’ve been sued for your debt, if you’re the victim of domestic abuse and you need a restraining order, if you’ve been evicted from your home, you do not have a right to a lawyer; and as a result, you can’t access the rights that are, in name, available to you. That is something that is a really terrible thing about this country, and it’s something that I thought was a civil rights issue that somebody needed to do something about.
Denver: How did you and your co-founder, Jonathan Petts, first come up with this idea that became Upsolve?
Rohan: As an undergrad at Harvard, I was spending a lot of time at the law school, and I was exposed to this huge injustice in the United States that if you are a low-income family, you do not have the same rights as everyone else. If you’ve been sued for your debt, if you’re the victim of domestic abuse and you need a restraining order, if you’ve been evicted from your home, you do not have a right to a lawyer; and as a result, you can’t access the rights that are, in name, available to you. That is something that is a really terrible thing about this country, and it’s something that I thought was a civil rights issue that somebody needed to do something about.
We were working at the Access to Justice Lab at Harvard Law School on these paper packets for people to solve their own legal problems. I was exposed to one particular area of the law, which is bankruptcy. So, if you are the victim of a medical bill or layoff or predatory loan, and you need to wipe your slate clean, bankruptcy is a lifeline for you to avoid the downstream effects of debt–things like homelessness, hunger, and poverty. But I learned that it was impossible for most people who needed bankruptcy to actually access it because they couldn’t afford a lawyer. That was something that I thought I could actually do something about. So, we were working on these paper packets, and I thought, “Hey, there’s got to be a way to scale these paper packets to help people through their own bankruptcies through software.”
That was the genesis of how I got involved with Upsolve. Jonathan was a corporate bankruptcy attorney who did Chapter 7 pro bono cases on the side, so he also saw the inefficiencies firsthand. That’s how in 2016, we set out to solve this problem of people not being able to access bankruptcy. During the last six months, we’ve relieved over $30 million in debt for low-income families, and we’re the largest legal services provider for bankruptcy in the United States today.
Denver: You actually took part of the summer, and you visited the bankruptcy courthouse in Brooklyn just about every day, and you talked to a lot of the people there. What did you hear?
Rohan: One thing that I heard is how powerful bankruptcy was to transform the lives of low-income families. Bankruptcy has a negative stigma across the United States. What I learned was that it was an incredibly powerful tool for people who are at the lowest emotional and financial point in their lives. The thing that really inspired me to keep going and that gave me the feeling of, “I can’t not do this!” was that I saw firsthand that people felt not only that they had a clean financial slate, but that they had been reborn and that they were able to pursue lives with new meaning. In one case, I actually had a chance to speak a few months ago with somebody who had even contemplated suicide due to his debt and had found Upsolve afterwards. I realized firsthand, and saw firsthand, how much bankruptcy mattered to these people.
Denver: When you’re bankrupt, you can’t afford a bankruptcy lawyer. What does one of those generally cost?
Rohan: Bankruptcy lawyers cost anywhere from $1,500 to $2,500 generally for Chapter 7.
Denver: Are there a lot of people who are in financial dire straits that don’t even realize that bankruptcy is an option for them?
Rohan: Absolutely. We believe that the largest segment of people who should be filing for bankruptcy actually don’t even know what bankruptcy is. They don’t know that it’s a right that exists, and that’s even talked about in the Constitution to help people who have hit hard times to get back on their feet. Part of our mission is not only to make bankruptcy more accessible to low-income families who decided to file, but to raise awareness that this right exists in the first place and that more people who, because of the lack of a social safety net we have in American society, should take advantage of.
The nice thing about bankruptcy is Capital One, Discover, and all these creditors don’t show up against you in court. So, it’s by and large virtually always just you… the debtor and the trustee, who is the court official who oversees your case. That’s what’s made this– what we call “limited assistance, self-help model” really effective.
Denver: How do you do this, Rohan? It costs $1,500 to $2,500 for a bankruptcy lawyer. But you’re able to provide low-income people bankruptcy for free. Tell us how that is done.
Rohan: If I’m somebody who’s interested in filing for bankruptcy, I’ll Google, “Should I file for Chapter 7 bankruptcy?” Maybe I’ll even Google “free bankruptcy attorney.” I’ll put that into Google, and Upsolve will be one of the first two or three hits. You’ll click on our link, and you’ll go to our website, and you’ll learn more ..first about what bankruptcy is. You might watch a few videos about the pros and cons and what the process entails, and then you will take our quiz to see if you’re a good fit for our service. That’s a series of 10 questions or so to see if you have a simple Chapter 7 case, because for us, we make sure to take the simple cases where people are not homeowners, where people are under a certain income limit and don’t have very many assets. Because we believe those cases are best fitted towards our model. What that is, after you qualify for our service, you’ll answer a series of questions on our online web application… which looks a lot like TurboTax, where you answer a series of questions about what you earn, spend, own, and owe.
Then we will take this information and populate your bankruptcy form using our software. We’ll also ask you for your credit reports and your pay stubs and tax returns. Throughout this process, we have over 100 checks in place to just make sure that you should be filing for bankruptcy.
Once we have all these forms, and we have your paperwork, and you’ve taken the required credit counseling course, where a human counselor discusses the alternatives to bankruptcy, and you give us the certificate to prove you’ve taken that course, we have an attorney on staff who reviews your form. They review your documents, and they confirm that they’re ready to go for the court and be confirmed that you’re a good fit, and they will give you back your forms to file yourself.
Once we give users their forms, they take them to the court, and they file for bankruptcy. After that, we actually track their case after they file. We see whether there are any complications that arise. We have a paralegal, an attorney, who helps address those. We also see whether you’re really able to actually get your discharge because that’s what’s important to us. The nice thing about bankruptcy is Capital One, Discover, and all these creditors don’t show up against you in court. So, it’s by and large virtually always just you… the debtor, and the trustee… who is the court official who oversees your case. That’s what’s made this– what we call “limited assistance, self-help model” really effective.
Denver: That’s absolutely fantastic. Is it true that if you were to charge for this service, it would be illegal because you’re not allowed to use any kind of automated service in this process?
Rohan: The rule is: if you are a bankruptcy lawyer, and you provide someone with bankruptcy service, you can’t unbundle. The challenge here isn’t as much the technology. It’s the fact that if you are a bankruptcy lawyer, you are not allowed to just do form review. You have to show up with your client in court. Upsolve doesn’t provide legal advice. We only provide information to our users through our tool. Nuance here is ..unlike in other areas of the law… for bankruptcy, unbundling is not permitted. Because we have basically unbundled our service, our limited-assistance service, that is only permitted as a free nonprofit service rather than a… you can’t charge.
Denver: Tell us again, how many dollars of debt have you been able to relieve and have forgiven here over the last period of time?
Rohan: Over the last six months, we’ve relieved over $30 million in debt, and in our lifetime in this organization, we’ve done over $40 million in debt. By our estimate, in the month of April 2019, nearly 25% of all legal aid bankruptcies were done by Upsolve.
Denver: That’s fantastic. Rohan, how do you fund the operations of Upsolve?
Rohan: We are really lucky to have some great philanthropic funders on board… People like the Robin Hood Foundation, the Hewlett Foundation, the Public Welfare Foundation, who helped get us started. We’re also really lucky to get government funding through the Legal Services Corporation which has a $ 4 million budget earmarked every year for technology in legal aid. So, we get a small fraction of that. And we’ve also been able to tap into individuals in the technology world who have been able to create private foundations of their own. People like Eric Schmidt, the founding CEO of Google. People like Jim Breyer who led the Facebook Series A; people like Chris Sacca who is an early investor in Twitter, Instagram, and Uber are all donors of Upsolve. When we first got started, we were really lucky to get funding from Harvard, Yale, and Princeton as well. Also, we’ve been lucky to get funding from the New York Bar Foundation and the Illinois Lawyers Trust.
More recently, another thing that I’m very excited about is we have started to generate our own revenue to support our mission. The way that we do that is, we have a lot of people who end up on our website who are not low-income, or who have complicated cases, perhaps because they’re a homeowner. They are really a better fit for private representation, and they don’t qualify for legal aid, even traditional brick-and-mortar legal aid. We ask them whether they’re interested in a referral to a private attorney. If they say that they are interested in being connected to a private attorney, attorneys pay us for the lead. So, we’re really lucky to help connect people– who are higher income or have complicated cases– to the attorneys who can provide them with a free consultation, and that helps us provide our service for free to our lower income users.
We right now cover about 50% of our costs through revenue that we generate through the higher income website visitors. We really like the idea of our higher income website visitors subsidizing the low income website visitors that we have. My goal is within the next 12 months, to be the first, fully self-sustainable legal services organization in the United States.
Denver: That’s very cool. I’ve got to tell you: That leaves you so much more time to focus on impact than running around trying to raise money.
Rohan: That’s right.
Because we chose software, we were able to move fast, and we were able to scale quickly and ultimately provide what we believe is an amazing user experience… where we’ve heard stories of people in rural places in Montana driving 12 hours and making multiple trips, just to get to a brick-and-mortar traditional legal aid organization. Now, from the comfort of their home, they can log on to our site and navigate the process.
Denver: You have been able to scale this operation across much of the United States at a very rapid rate. What have been some of the keys that allowed you to do this so quickly?
Rohan: I would say, number one is that we chose software as the prime delivery mechanism rather than brick-and-mortar offices. We would not have been able to scale across the United States and become the first national direct services organization for bankruptcy if we had chosen brick-and-mortar. Because then we would have to raise the capital to have offices in every state across the country. Because we chose software, we were able to move fast, and we were able to scale quickly, and ultimately provide what we believe is an amazing user experience… where we’ve heard stories of people in rural places in Montana driving 12 hours and making multiple trips just to get to a brick-and-mortar traditional legal aid organization. Now, from the comfort of their home, they can log on to our site and navigate the process. Number one is technology, and number two is our distribution channel.
We have elected to invest the vast majority of our growth efforts into Google Search. We have tried to place as highly as possible for Google search terms like “free bankruptcy attorney” or “Should I file for Chapter 7 bankruptcy?” or “Bankruptcy income limit,” or “Filing bankruptcy in Florida,” even where if you type in any of those terms, you’ll see Upsolve on the first page. When we did our research for the last three years, we found that the vast majority of people who are looking for help are going to Google. So, it was our goal to find them and reach them where they were looking, rather than some other probably more traditional nonprofit distribution channel. We feel like we’ve gotten a Master’s degree, not a PhD, in Google Search over the last few years.
Denver: Bankruptcy law is generally federal law, so it’s a little bit easier, I guess, to navigate.
Rohan: That is exactly right. Another thing is we’ve chosen a federal area of the law that is, in practice, non-adversarial. It would be really hard to have moved this fast if we had chosen something that had local or county laws. There are 3,000-plus counties in America. A lot of them have their laws. If we had chosen something that wasn’t federal, I think we would have had a much harder time.
Denver: Have you given any thought to using this tool and this approach for other financial aid issues, such as people who might have a horrible credit rating… or things of that nature?
Rohan: Yes. We definitely think that by having right now upwards of 30,000 site visitors per month; that’s like over 300,000 site visitors per year… people who are in financial distress, but there are potentially a lot of other services that we could provide, just given who is already coming to our site and the distribution advantage that we have. In a low-fidelity way right now, we direct people towards secured credit cards at the end of the process, if that’s something they’re interested in, to rebuild their credit. But we could definitely expand the product suite we provide to our existing users. But our current goal though is to get from 30,000 or so site visitors per month to 300,000 site visitors per month because we really feel confident that we can continue to scale. Before we expand to other services, we’re laser-focused on self-sustainability and growth within bankruptcy.
Denver: Let me close with this, Rohan. Share with us a story of someone who has been helped through the services of Upsolve, and what it has meant to them and to their family.
Rohan: Absolutely. I’ll share the rest of the story that I mentioned a little bit earlier. There’s a gentleman by the name of Abed who lives in Queens, who in 2017 actually attempted suicide. He attempted suicide because he had taken out a $50,000 payday loan or predatory loan(18:11) that he felt like he had no chance of being able to pay back. He had been homeless earlier in his life, and he had also been kicked out of his home. His mother had died at a young age, and he himself was an immigrant from Bangladesh.
He was really lucky to have found Upsolve through one of the guidance counselors that he had at a nonprofit. The guidance counselor told him that there was a tool that could allow him to relieve his debt. He used Upsolve in the Spring of 2018. I caught up with him a few months ago and heard his story. It was extraordinary. After he had filed for bankruptcy, he actually started to learn to code. It was really extraordinary to be talking about our technologies at Upsolve. Here is somebody who is a user dive deep into the intricacies of it, and Abed today has a job as a security guard. On his nights and weekends, he is working on his own company. He told me that his goal one day is to be an entrepreneur in his own right and to be his own boss. I thought that was just so inspiring that through the bankruptcy process, people were able to wipe their slate clean, but also pursue their dreams and have that second act on life. I think that’s core to what it means to be an American, that we have this second opportunity when things get tough, and that we make use of it. I think Abed’s story is emblematic of what we’ve set out to do for the United States at Upsolve.
Denver: It’s so wonderful to give so many people a fresh start like that. Rohan Pavuluri, the co-founder and CEO of Upsolve, I want to thank you so much for being here this evening. For those who want to learn more about Upsolve, tell us about your website and what visitors might find there.
Rohan: Absolutely. Feel free if you’re interested, to shoot me an email. I’m email@example.com. You can also visit our website. Just see more about the resources we have available to people considering bankruptcy, and to hear a little bit more about our story. Thank you so much.
Denver: Rohan, it was a real pleasure to have you on the show.
Rohan: Thanks so much, Denver. Take care.
Denver: I’ll be back with more of The Business of Giving right after this.
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at www.facebook.com/businessofgiving.