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Debtle is a Wisconsin start-up led by Stephanie and Houston Hoskins with a mission to bring better outcomes for both sides involved in debt settlements and, in doing so, improve financial inclusion across the US.

There is an ever-widening gap in the US between the small top percentile of wealthy and those struggling.  Part of this, Stephanie believes, is caused by the gap in financial literacy.  But it is also exacerbated by systems that do not work.  Credit scores, for example, are based solely on your homeownership.  When debts go bad, the settlement system fails, and everyone loses.  Debtle aims to change that.

Stephanie’s background:

Stephanie studied Marketing and Science initially at Tulane University and then took an MA in Finance at Louisiana State University.  She also sat for a BSM in Marketing.  Stephanie says she found she was good and maths and numbers, enjoyed finance and was fascinated to find out how many subfields there were.  After her MA, she never-the-less thought that she did not have enough love and passion for one particular topic to go on and study for a Ph.D., so she went to work in the corporate world instead.  A little later, she changed her mind and is currently just finishing the dissertation, which will earn her a Ph.D.

Houston, meanwhile, has a background in conference organizing and sales, making a strong complementary team.

Houston Hoskins of Debtle
Houston Hoskins

Stephanie says that she always had the entrepreneurial bug that most entrepreneurs do. However, entering the corporate world meant she acquired what she thinks of as “the curse of a good job,” a secure future, and good money, making it challenging to step back from.  She had lots of business ideas but decided it made sense to wait for one that would be impactful.

Seeing Debt collection failures first hand

Her corporate career took her into finance in healthcare.  She was tasked with optimizing revenue and market and could see that there was a huge opportunity where healthcare could do better for the patients.   They were continually inundated with calls from patients wanting to negotiate their bills.

It was ironic that the patients would offer higher amounts than the company would eventually get through the debt collection system.  However, they had no staffing to negotiate or collect individual debts, so both sides lost out, which was a system’s dismal failure.

At around the same time, a friend of Stephanie’s was struggling to pay off $9k tuition fees.  She had much of the money and needed a transcript of her work to take up a job offer, enabling her to pay off more.  The transcript was being withheld because of her debt.   The debt collectors said they would take $3k, far less than Stephanie’s friend had intended to offer, and that they would release the transcript.  She asked for confirmation in writing, but they refused.  Once again, both sides lost.

The problems Debtle solves

Stephanie had seen there were two significant problems to the system.  One was the lack of automation to make volume debt negotiation feasible without vast staffing.  The second was a lack of trust and transparency, allowing consumers to safely and efficiently pay off bad debt.  No one was trusting debt collectors.

In 2019, Stephanie and Houston founded the FinTech company, Debtle to solve this problem.  Both sides negotiate directly on the cloud-based platform using the app’s negotiating tool.  All communication is done in-app, and settlement is fast and easy. Payments are made through Pay-Pal or Stripe, and the credit goes straight to the creditors’ bank account.  The customer doesn’t pay till the debt is settled.  In addition to collecting money more efficiently, companies also save on hours.

For the debtor, while companies have an option of recording a bad debt with credit agencies, when the debt is negotiated to a settlement via Debtle that doesn’t happen and the record stays clean.

Debtle’s success lies in its transparency and taking the emotions out of what is usually a highly emotive situation.  Debt collectors are banned, and the aim is to make the experience positive for both sides.

The Entrepreneurial Journey

By the summer of 2019, Stephanie and Houston had done sufficient research and felt they had nailed the solution and the customer journey they wanted people to experience.   They got an angel investor involved and enough funding to build the first pilot version.

2020 slowed them down in part because they decided to move from New Orleans to Wisconsin.  With the pandemic experience and two young children, they decided they wanted more fresh air and space.   In the process, they discovered that Wisconsin has a great start-up community and many start-up incentives, making the move sound business sense.

By the autumn, they were named one of Wisconsin’s “ones to watch” and had won a couple of pitch competitions.  These successes led to them being accepted into an accelerator, Accelprise, and raising a $100,000 investment to gear up the final version to take to market.

I asked Stephanie what the most significant challenges to date had been.  On reflection, she felt that it was them both being first-time founders coupled with having gone to state universities.  Most founders come from the Ivy Leagues.  Also, she had a corporate background, and they were married, which made them not just atypical but something they were told VCs actively wouldn’t take on.  They worked hard to show this was de-risked to get people interested.

Stephanie quickly added that, of course, there are perks to being married to your co-founder.  You can talk about the business 24/7, and they were able to share looking after the children in the pandemic, meaning both of them could continue to work.   She says their knowledge level of starting up is “getting there,” having both hung around and talked to many other entrepreneurs.

2021 and the future:

Debtle has just launched for use in the healthcare sector.   Their first version was always intended for this sector, but that is not where they are stopping.

However, by the end of 2021, they will have closed another round of funding, expanded their team, and launched into their next target sectors, education, banking, utilities, and property management.  With the pandemic, evictions have been frozen, meaning there is a massive backlog of back debt to be sorted within that market.  They already have a waiting list in these sectors.

Mid and small business debt settlement will follow.   However, the mid-term goal is to have signed enough corporate clients to enable them to take Debtle to the individual user.  At this stage, they have plans to make debt settlement much more creative and allow people to pay off debts in other ways.  These may include banks of hours work, crowdfunding, selling off old gift cards through a partner company, perhaps even help from influencers who will offer an Instagram post towards the debt.

A radically new approach will mean that creditors get more in receivables, and individuals will not suffer to the same degree for their poor financial management.   Houston and Stephanie’s overall end goal is to help as many people as possible to be in a good financial place.



You might like another recent interview with a very different American entrepreneur who is also passionate about inequality of wealth, Solomon RC Ali.