Killing Debt With Tech To Save Americans with Jason Saltzman of Relief

Jason Saltzman is the Co-Founder of Relief and a well known member of the New York start-up community.

Relief is an app that helps people navigate the craziness when dealing with debt. According to Jason, Relief is here to kill your debt.

The statistics about debt in America are staggering:

1. Average amount of debt = $6k/person
2. Average number of credit cards = 8 credit cards/person
3. 1 out of 3 people are behind on credit card payments
   

Beyond Relief, Jason is one of the best community builders out there. Rolling Stone actually called him a “cruise director,” a hilarious and accurate phrase if you know Jason.

He is also very much on top of his social media game, especially TikTok, which he believes that all businesses should be active on.

During the chat we discussed the intricacies regarding debt in America, what it takes to build a strong community and strategies to make winning content on TikTok.

Show Links

• Follow us on Twitter: @SaltzmanJason / @startrelief / @mpd‍
• Guest Links: Relief, Alley‍
• Books Mentioned: Tipping Point by Malcolm Gladwell

Transcript

MPD: Welcome Jason. Thanks for being here.

Jason Saltzman: I am so beyond. Happy to be here with you, mark. And I can't wait to catch you up and talk to you.

MPD: Awesome. There's a lot to cover today. Mine starting with just a brief background on your story.

Jason Saltzman: Yeah. I, a second version I'm going to try my best, I'm very long-winded, but for the last 20 years I've been building my own businesses in several different verticals, I've had a couple of successes.

And I really I love helping people, I love sharing information. So I write for different publications and I just started a new company in the FinTech space. We raised a seed round and I love, I love helping and talking about the journey and I'm here to just, kick it with you.

MPD: Awesome. Let's jump into the company so relief. You want to give us an overview on.

Jason Saltzman: Sure. Do I have 30 seconds or I have a little more this time now take your time on this one. Thank you. Because I would start to sweat and it would be all uncomfortable. So relief is an app that destroys credit card debt for free.

It's the culmination of two decades of hating the debt industry and knowing that the problem has only gotten bigger over time. With no real scalable, tangible solutions to consumer debt, which is a huge problem that goes untalked about in America today for several different reasons. So we're facing ahead on,

MPD: so wait, destroying credit card debt.

I obviously know about the company here, but can you explain that? It sounds like bullshit.

Jason Saltzman: I gave you the elevator pitch, cause there's really going off the 30 seconds though.

MPD: Okay. Now tell us let's, let's get into it. What is actually happening to the debt and I want to hear about the problems.

Yeah.

Jason Saltzman: So the problem is only gotten bigger over the years and the problem is it's, it's a very complex problem. That ha that, that there are, there is access to simple solutions that people just don't know. They're just not aware of and for several different reasons. But the problem is I would say part cultural, right?

We have a spending problem in the United States. We also have a credit issuing problem where banks issue money to people credit rather to people that just can't pay it back. And when you mix those two together, You have a volcano of a problem that can erupt at any time, the case in 200 eight, the housing market banks were issuing money to people that couldn't afford it.

They basically asked you how much money you made. They didn't ver verify it, which was called stated income loans, which had another name on the street liars loans. What do you need me to say to get the loan and to our shock and all. People couldn't pay it back. And the banks have manipulated the whole process and the time being, but the credit not to get too far with credit cards.

MPD: How was that the same? I thought with credit cards, it's pretty well understood. The credit worthiness of the folks who were borrowing.

Jason Saltzman: I know, I think no

MPD: worries. Let's get into it. Let's talk about why is this a real problem for individuals? I know a lot of people run credit card debt, obviously debts can be bad.

Yeah. There's good debt and there's bad debt. I know credit card debt is generally bad

Jason Saltzman: debt. Yes. We refer to it as toxic debt. It's the way it's issued. It's like you give a human being enough rope, and they're going to hang themselves. For the most part, there are well-educated people that understand.

That a 27% interest rate is bad, but there are other people that want instant gratification and spend money exorbitantly that they do not have. And bank and credit card companies are set up to extend enough credit to see how people are paying it off. And if you're paying it off on time, their golden gift to you is more credit.

And the process is repeated until you're stuck making these minimum payments. The problem with these minimum payments are, if you do the math, as you love to do right, you would match up a $50,000 credit card debt paying $600 a month, and you'll be in debt for the rest of your life. Not even touching the balance and people don't realize the math when they're signing these, these, these contracts that have small print, the size of a.

And that's basically what it says in the small print. And God forbid you go behind because then your interest rate defaults to Shylock rates and the, the credit issuers make more money off people in default than they make off people that pay their bills on time. And when you topple that on top of a system that is mostly predatory against disenfranchised community.

That don't have access to the type of education that you and I have that had the benefit of having access to your, your non-educated in a, in a jungle that wants to rip you apart. And that's, what's been happening for the last, since the Dawn of the creation of the credit card.

MPD: What percentage of folks are in credit card debt in the state?

Jason Saltzman: It's a big number. Yeah. So even more important than that, one of three people, one out of three people is behind on a credit card bill, right?

MPD: So that's 110 million folks in America. That's correct. Again, I guess that probably includes kids. So maybe it's a lower number

Jason Saltzman: and the consumer debt rate is around $805 billion right now.

MPD: So the average person out there, how much debt are they in

Jason Saltzman: the average debt's around $6,000. And the average credit, the average amount of credit cards that people have is about eight.

MPD: Got it. And that's for a lot of the folks who are in jeopardy here, a significant chunk of income for the year.

Jason Saltzman: It's not just that, yes. Um, what we're finding out in doing our research is that not only is there. In income issue, it's a discretionary income issue. Like when will you retire? What are you when you're making these minimum payments? Because that's when people feel like they're doing their best to get rid of this problem.

They're basically just getting by on the bare minimum, they're giving up a quality of life. That is the norm. And it's subpar. And people are a flat tire away from just losing their shit. And it's sad, mark. It's sad that because we only have this life as far as we know it. Maybe people out there believe that you're going to be reincarnated to a nice little puppy, but at the end of the day, this is our life.

So when you see the impact, so the data shows us that suicide rates in America, And divorce rates on America have gone up with the financial issues of America. And when you start to study the systemic problems of financial issues and financial wellness, you realize that this shit is killing people. It's quality of life.

It's hurting relationships. It's a stigma that nobody talks about. It's a problem on top of a problem. And that's why I've decided to dedicate my life to solve. Because I want to do great shit before I die.

MPD: Yeah. I feel like people don't, first of all, that's inspiring. I feel like people don't understand that it's an endless treadmill.

When you get into a 27% interest rate compounding against you. They get trapped in it. But I think what you're touching on there is a bigger part of the story that feels like it's not a. Is, obviously people know too much debts, bad for a family or an individual, but there's a bigger social implication of this, right?

This is having a more system-wide impact. So can you talk about that a little bit more? I know you mentioned obviously divorce rates, everything else, but this is a macro issue. It is far as I can see it.

Jason Saltzman: It is it's all in the date. And I'm not going to bore you with statistical information, but I will tell you from a sociological perspective, there's a, there's a SA a shit sandwich of a problem, right?

Because you have people that are not only getting themselves in debt, they're in hiding, they're hiding from their mailbox. They're hiding from their phones and they're IDing. The data shows us from their significant others. So they're not even bring it up. And when that happens, the real problem is.

When you're not facing a problem, what's the surest way to not solve something, to run from it, to not face it. And that's the real problem. Not only is it a treadmill, but you have to start thinking about what you're giving up in the process. You're giving up. We're looking at people in middle America, like lower to medium income people that can't feed their kids, but they're paying Amex.

Or capital one, minimum payments, exorbitant, minimum payments, three, $400 a month and they're skipping meals and that's the problem. And it goes deeper than that, because then you go into talking about what a credit score is like, what is your credit score? W we're convinced in America that your credit score is the most important study of your worth to live a good life.

But the reality is if your credit score extended, you credit that you can afford. And you're only worried about that score and you're not feeding your kids a third meal. That's ludicrous when you think of it like that, but that's exactly what's happening. That's the sociologic economic effect it has on society where people care more about.

Then they do have their quality of life where I'm not saying credit is an important, of course it is right. It's a part of your future . But in the world of disposable income, it's a luxury compared to what you need to take care of, to have a quality of life. And that is part of what we're doing at.

We're not just building systems to algorithmically, which I'll go into it a little bit, which I'm sure you'll ask me to get you out of debt as quickly as humanly possible, but we're here to expose as simple as possible, the ruin of what you're currently doing right now, like what your situation is and how that actually is going to affect you, because most people don't understand how this affects your future.

MPD: How did you come to understand those payments? I think it's something where

Jason Saltzman: it's basically been getting shit on and kicked in the face for the last four years. My first business that I built was in the consumer debt space. It was a debt settlement company that, that I was exposed to the world of helping people negotiate down their principal balances and building a company around it.

So I learned all of the. Intricacies of how debt worked, how it affected families. And I got to speak on at the time 20 years ago, everything was done over the phone. So you would literally speak to families about this problem. And not only did you learn the algorithms and the nature of how debt worked and the way credit issuers extend credit and their funding philosophies and their collection philosophy.

I was speaking to families across the country that were dying because of this. So that was my first entry into this world. But at the time there was, we didn't even have an iPhone. Then you even build a business. Matter of fact, the first person I saw raised money was you in a tech crunch?

And I reached out to you. That's how we that's. How that's you and you, it was unheard of that. You could build something at the time, overnight the way you had access now. So you, the way you did it was you made money. You went and you made money. So now we have access to different ways of business did not only different ways of funding companies, but access to different business models that help consumers more.

And it's a perfect storm. To help people in debt. The way that business is set up today is much more much more rewarding for consumers. If it's looked at the right way. And that's basically what we're doing.

MPD: So let's say family listening to this has debt, maybe an entrepreneur, who's been racking up credit card bills to build a company and they don't see a way out.

Income is not rising enough to pay it off. What are their options? What are the levers you can pull as someone in a debt trap?

Jason Saltzman: Yeah. So currently there are five options, right? Um, one is to continue what you're doing, right. Rob, Peter to pay Paul. Which basically is like balance transfers to lower interest rates and mathematically figure your way out to use any discretionary income.

You have to go towards higher interest debt and cysts and systematically pay it off. So if you have the means, that is the best way to get out of debt, right? If you don't. Then you need more aggressive tactics, right? If you don't have the income, the discretionary income to pay more. So you can either go into a debt consolidation program, which is like a tally where they lend you money on top of your credit cards to pay the debt off at a lower interest rate that will get you out of debt.

And that is probably one of the best. Alternatives to bankruptcy that won't systematically or systemically rather hurt your. And these loans are available. They're out there. You could do that in the form of a personal loan with your bank. You can go to, like I said, like a tally, or you could, if you have equity in your home, you could take a home equity loan and you could pay off.

But I don't really recommend doing that because you're taking something that's unsecured. That's not backed by any asset and you're turning it into a security asset, but it is a way out which you asked me. The third way is a bankruptcy and there's two types of bankruptcies for personal. There's a chapter 13 and a chapter seven, a chapter 13 is a repayment plan.

A chapter seven is a complete forgiveness of debt. Bankruptcy is a very difficult thing to file, but it also is if bruising, your credit to get out of debt is a thing, a bankruptcy would be a skull. Because you always have, not only does it hurt your ability to get credit, it actually hurts your ability to live a good quality of life.

If you want to get a job, you always have to check that box. I'm sure many of us have seen, especially with government jobs or any type of, um, security systems, things like that. You have to check if you've gotten bankruptcy or not. And you'll have to check that which make gives you a disadvantage to somebody who has.

And you have to live with that for seven years, seven to 10 years, in some cases the next option, which is a fourth option is it's a more aggressive form of getting out of debt for people that are either caught in the minimum payment trap, or they're already fell behind on their bills. The value of their debt has gone down because they actually have a hardship and there's a deal to be made with the creditors.

That is called a debt settlement. And you could do this completely on your own, but there's a whole industry. There's a billion dollar industry that charges fees to establish these settlements. But really all you have to do is call up your creditor and work out a deal which could get overwhelming for several different reasons.

But that is known as a debt settlement, right? High level. And then the fifth way of getting out of debt, which is my personal favorite. It's winning the lotto, which by the way everybody thinks they're going to do right.

MPD: Peter Sullivan from Jack pocket on the show a while back,

Jason Saltzman: I love that app or you set up,

MPD: everyone else can download that app and that'll be the fifth way out.

Jason Saltzman: That's right. That's right. Which is the most common. Like psychological thing that like an impending capital event, I'm going to get a better job. I'm going to make more money. This is going to go away. There's going to be a windfall of cash. Daddy Warbucks is going to, it's going to pass away and leave me all this inheritance, no it more than likely it's not so defer to the other, but that is currently in our country. The ways to get out of.

MPD: I love that was included on your list. Okay. So tell us about relief. What is relief doing? So someone's in debt. They've got four realistic options. They're all hard. Yup. Why do they come to you guys?

Jason Saltzman: We believe that debt settlement, let me take a step back. We know that debt settlement works as a concept and as a tool to get out of debt, if you are either caught in a minimum payment trap, or you're behind on your bills, debt settlement is the best alternative to bankruptcy. That's out there.

Currently in its current form. If you were to go to help with debt settlement, you have to pay exorbitant fees that are part of the settlement, whether they're upfront fees, which are getting banned in each state systematically over time, they've already started to, or you get, they get paid based on performance, but as a company, what relief is doing.

Is it's taking that model and turning it upside down and saying, you shouldn't be, if you're in this situation, you shouldn't be paying fees for debt settlement, because you don't have the money in the first place. So the question when we had, when we started the company was how do we make this free for people to use?

And that's a big part of relief because relief does two things. Relief has a negotiated. That is a tool that's completely free to use that mitigates the circumstances of your debt and negotiates a settlement for you completely free it end to end. Does the whole thing for you. On top of that, the other feature that relief has currently in works is a loan system to provide financing.

If you need a debt consolidation, loan, and those are for people that have better credit. That don't fit into the category of needing settlement,

MPD: right? So you're doing two of the four

Jason Saltzman: that's correct.

MPD: Got it. So what does the industry still need? So you guys are coming in and solving this.

Are there other things you're hoping people will build for other entrepreneurs listening around relief for as ancillary services to support? Is there, is it not an entrepreneurial problem? We need some legislative change. What do we need? You're coming out and you're going to tackle a lot of the process that people are not tapping into.

Yeah. What are some, or could you be on

Jason Saltzman: that? Two things, I think legislation needs to, government's here to protect us right. Against things that we can't protect us ourselves against. And I feel that the way credit issue is issued needs to change. And that's a policy thing. On the other side of things, we've fundamentally believe that two industries should not exist to multi-billion dollar industries should not exist.

Debt settlement companies should not exist. You should not charge fees to somebody that's going through a negative circumstance and to the debt collection space needs to change drastically. It's archaic that there are millions of call centers set up across the world. To try to go after you like loan, shark tactics to collect money.

And it's creating a multitude of layered problem that translates into customers being hounded thinking they're less than, and ultimately at its highest point divorce rates and suicide rates going up because you just have somebody on the phone that's incentivized to to scare the shit out of you. So you take the money that you don't have.

To pay a bill. So you can't pay your, you can't feed your kids. Those two industries need to die and we need help doing it. It's a huge, they're huge monsters to take on. And if you're going to look for a space where there's impact and to disrupt and to create value, those are the two direct spaces that need a fast and hard death.

MPD: When lenders prefer to work with a relief than a debt collection agent. The idea is either way, they're probably not getting every dollar paid back, in those situations, when you go to a debt collector there, they're selling someone's debt at a discount. So it's understood. They're not going to make their money back and a debt consolidation done by you guys.

Wouldn't that just be a similar financial outcome with a more humane temperament? You said

Jason Saltzman: it so you're right. Credit issuers have a huge problem. As we know the world has shifted to being less about shareholders and more about corporate social responsibility. So how could you be a fortune 10 credit issuer and say that you want to be diverse and you want to have focus on corporate social responsibility and equality when you're issuing credit.

And then when somebody misses a payment, you hire the Gestapo. To go after them. It doesn't, it just doesn't line up. So you're right. Relief offers a bridge. And what we're finding through our study, we just got started. We have to get to critical mass. To appeal to creditors credit issuers that are out there, but they are, they're going to be our friends.

We're offering them a really nice way to get paid. We've touched these consumers the right way. We spoken to them and treated them like human beings. And here's your money. And by the way, let's get them back into banking the right way, because now they know there's only, obviously there's those people out there that always are going to touch the hots.

But for the majority of people that have gone through something like this, which is not easy, which is very emotional, which can tear people apart, families, relationships, what have you, you're not going to do it again.

MPD: They, with the lenders make just about the same amount, getting paid back by you as they went through a debt collection

agency.

Jason Saltzman: The efficiencies that we're creating, we're seeing that they're actually going to make more. Because when you look into the system, the systems of getting debt collection involved with collecting debt, think about the cost infrastructure of call centers across the world, right? And the, the fees that they're paying to collect this debt.

So we really are venturing into a world where it's a, win-win, it's a win for the consumer, and it's a win for these large credit issuers.

MPD: So you mentioned earlier you would change how credit is issued. What policy changes would you make if you were.

Jason Saltzman: I would stop lending money to people that can't fucking afford it.

Am I allowed to curse by the way? Yeah, that's fun by the way. I've never heard you this serene before you are so fucking serious. I'm like, am I not fuck happen? You

MPD: up, bro? Yeah, I think it's the microphone, man. It's got a, it's got a

Jason Saltzman: special, no you're, it's very calming, but no You stop, stop lending money to there needs to be policies.

And fortunately bankruptcy is a, although bankruptcy is a really tangible option for people that can't afford anything, which there are millions and millions of people that just can't afford even a settlement. Bankruptcy is very hard to find that there was legislation put in the Bush era. That made it very difficult.

And we find there's a lot of literature and a lot of information around like why that is. The major credit issuers obviously want to shine against you being you know, able to file bankruptcy. Sticking your middle finger up the debt as easy as possible. And there were some bad actors, consumers that would just repeatedly file bankruptcy over and over again.

So there was a gentle, there needs to be a gentle balance. And right now the balance is, is way in the other way. So I would say that we need to make policy that goes more in the. Where it makes bankruptcy really accessible, but it also regulates the amount of capital that lenders can issue people that can't afford it.

And not just looking at metrics like the credit or credit reporting agencies, which are to me in my opinion, archaic. But on top of that, you're just, they're just looking algorithmically at what people can afford to pay, not how they got the fucking. So like somebody might be like borrowing from another credit card to pay that credit card off.

And all of a sudden their algorithm issues that more credit, and this is ongoing and there are so many credit card companies out there. You could, people do this for years. Debt doesn't go down. It adds up before, you know it, you have a hundred thousand dollars in debt. You'll have a $60,000 a year income, and you're making payments of all your discretionary income.

For the rest of your life,

MPD: And after oh eight, it seemed like the legislators put an eye on how mortgages were done. Is anyone in the government talking about this now or paying attention to this issue? Is there anyone who's a champion out there? Yeah,

Jason Saltzman: I don't want to, I don't want a single handedly dis you know, Disrespect the efforts and even the efforts that I'm not aware of, because there's a lot of work being done in the space, but as a lay, as a looking at it from a uh, a layer like what's right in front of our face, there's obviously hasn't been enough because this problem is only getting bigger.

MPD: It's fantastic. One of the things I found so interesting about this venture when you picked it up is it's very missionary. You've been a serial entrepreneur, you've built a lot of stuff. You built coworking spaces, you've done, the debt collections in the past and some and call centers.

I think in between, you've done a bunch of different types of businesses, both in how they're financed models, who you're managing, what you're building. This is the first time I've seen it with such a robust mission. How has having a mission. Guide and pull the company affected the business. How has it affected you as a founder?

Jason Saltzman: No. So it took me a year to figure out if I wanted to do this or not, and I did deep due diligence. And I think as found, I know as founders that if nothing else, the right way to do it is to be a seeker of the truth. And that was a year of learning about the space, getting updated on all the material and then seeing if, as great as possible, if I could validate some of my assumptions to pull this off.

And ultimately that due diligence became a study of who's with me. And ultimately what I've been able to do because it's, I'm so passionate about it because I see the problems so vividly, I've been able to evangelize great partners to be around me. And ultimately when we went to raise money, when we found that we actually can make this a reality and do it, it took me three weeks to raise an oversubscribed round.

I actually had to give money back as because we raised too much money. And that's what it does. It's efficient having a mission and having an awareness around how you're going to and, and, not a belief, but a knowing that the world needs your shit to exist. Makes it so powerful to do everything you need to do to get things off the ground, getting the right team members, getting the right partners, getting the right investors, everything lines up.

When, the world needs your product to exist. And when you can articulate that with the passion and vigor of an animal. Yeah.

MPD: I've had some interesting about this particular narrative is this is one of those cases where everyone knows it's a big problem, but I think a lot of people have lost hope in finding a solution.

It's too complicated. There's too much bureaucracy. There's too much of a fragmented population involved in this. It feels like we're all sitting around waiting for a government shift or someone to do something. So when you show up as an entrepreneur with this type of approach and a mission to do something about it, I think you're right.

I think it's very inspiring and very easy to get behind for founders who are listening now, maybe that maybe they're not all building companies that have an inherent social. I believe companies generally are, most businesses, if they're going to be generating profits outside of negative externalities, which the government is supposed to regulate, but it doesn't always, generally companies are making the world better and that's why consumers pay money from people pay money when something makes their life better.

So we all do I there's a lot of founders listening to this who may not have, a project at hand, that's solving a social issue with somebody. But it still could be mission-driven any advice for them on how to be thoughtful or identify the mission, how to craft it, how to leverage it, to help them be more successful.

Jason Saltzman: Yeah. It's an obsession over value mark. It doesn't matter if you're saving the planet, making a cure for cancer. If you're making a pencil factory, what value are you creating for your users? And obsessing over that value, money comes after value. We all know that now. But Mo but when you see entrepreneurship glamorized, as if it were in this game, just to have an exit, you are missing the.

Especially if you've been there before, right? Like us, you we're getting older. You know, we know our mortality is there. You are. I know you're a single you're you're we're going to connect to the internet and live forever. I'm with you, bro. And if anybody's working on that's the ultimate value.

Please continue obsessing over value by obsessing over value over your own financial needs, which is a very tough thing to do. It's very circumstantial, right? But ultimately if you're in that space and you have the way that is the way this is the way, all right, obsessing over value creation. And that value becomes your wow.

And we all know that the, the, the money won't get you through the sleepless nights and the getting shit on and getting the nose, but the why, and the deep, why will get you through everything you need to pick yourself up again, when you fail,