Happy Money (Payoff.com) is a technology lending platform much like an Upstart or an Upgrade. A huge difference with Happy Money is that the money behind the loans comes from credit unions. This is not necessarily a bad thing. Some would see it as a good thing. The reason I have to point this out is for those of us that end up in a situation where we are struggling to keep our payments on time. This is where most credit unions (not all) are just different.
While credit unions provide focused local and community banking with attributes that many of us prefer over national banks, they are often less flexible and accommodating when you need a bank to work within your means to payback a credit card or loan when you hit a tough financial patch. I will dig into some of these concerns below.
In this article I am going to talk about options for lowering your interest rate on your Happy Money Loan, as well as the settlement options that tend to play out over time. I will hit bankruptcy a bit at the end, and cover collection and Happy Money credit reporting policies too.
Getting your Happy Money Loan interest rate lower.
Many lenders in the US offer temporary and long term hardship plans direct to their customers. If they do not offer the hardship plan to you themselves, something similar is typically available by working through a nonprofit credit counseling agency.
While virtually all national banks participate in debt management plans that are delivered by nonprofit credit counseling companies, credit unions are more hit and miss. The bigger credit unions, like Navy Federal, are great at hardship plans and working with credit counselors. The smaller credit unions typically are not. And your Happy Money loan was likely funded by a credit union who may not want to reduce the interest on your loan.
I generally advise talking to your lender about the hardship plans they make available, and in this case, I still do suggest that, as policies can change over time. But as of now, Happy Money is not known for longer term, or life of the balance interest rate reduction on their loans.
I fully cover lower monthly payments and settling Happy Money loans in this video:
Settling your Happy Money Loan is an option.
As I have covered in the video above, and on this page already… credit unions are different. That is the case when settling a credit card or loan too. The smaller, more local credit unions, may refuse to settle at all. Some may allow an account to be settled only after they drop the balance you owe into their external collection buckets. Some may only want a lump sum payment all at once when settling the balance for less, while another will be happy to spread the settlement over a year or two.
I have done settlements with small credit unions and local banks where we could only find out if the offer would be approved on the third Wednesday of the month, as that is when their settlement committee would meet to review any accounts up for settlement consideration. See what I mean by smaller banks without a clear cut settlement and recovery policy?
The point here is, settlements on Happy Money loans happen. All the time. The amount you can save, and how long you will have to pay could depend on the policy of the bank behind your loan.
I have yet to see a Happy Money loan, meeting my criteria to be settled, fail to settle. But how low and how long has a significant impact on whether I recommend settling at all, and certainly how I build a settlement plan when you have multiple other accounts with several different banks that you need to settle as well.
If you want to settle your Happy Money loan I highly recommend you schedule a call with me using the box below or the “Get Help” tab at the top. I will review your potential Happy Money settlement options with you, and you will get the added benefit of understanding what other lenders policies for settlement are.
Happy Money and debt collection.
Happy Money and Payoff have access to the same 3 collection buckets that are used by most lenders. How you resolve a Happy Money loan after you go 5 months late could depend on which of the buckets your account is placed in.
They could place an account with an outside debt collection agency who only gets paid if they get you to pay, which is super conducive to settling.
They could sell your debt to a Debt buyer, which is also an opportunity to explore dynamic settlement reductions. Negotiating long term monthly payments on settlements with debt buyers who purchase your Happy Money loan is a huge plus.
Settling with a collection law firm that may get your Happy Money loan is often an option, but the amount you can reduce the balance by is typically no where near as good as when settling at any other time, or with any other entity.
Want to avoid dealing with a collection law firm on your Happy Money loan? Schedule the phone consult with me below and I will detail how that is possible in your particular situation. I do not charge for those calls.
Happy Money is an unsecured loan.
Virtually any unsecured loan can be discharged in a chapter 7 bankruptcy. Happy money loans are no different. They could contest the discharge if you just took the loan out, just like any other bank can, but that is not common, and you really do not need a lot of time to go by before the loan would be eligible.
You can do a full or partial Happy Money loan repayment in a chapter 13 bankruptcy over 5 years. This is generally going to be the least best option. I tend to suggest settling your debts instead of chapter 13, and filing chapter 7 rather than debt settlement.
I will not cover a ton of the bankruptcy attributes in this article, as I covered that in the video above.
Happy Money on your credit reports.
Happy Money loans on your credit reports will appear like any other lender. If you enroll in a hardship plan they offer you, and you did not go 30 days late, there is really no impact to your credit scores from enrolling in one.
If you sign up for a debt management plan on your Happy Money loan, and they get you an interest rate reduction from Happy Money, your account will be closed, and a “DMP” notation may appear for your Happy Money trade line. If this happens it is fairly benign to your credit scores. You may have a hard time getting an unsecured credit card or personal loan while on a DMP, but many people still get home and auto loans while on one of these plans.
If you need to fall late in order to settle your Happy Money loan, there are obvious implication to your credit scores due to the 30, 60, 90 day late payments that will show up. The damage is quick and severe. There is no way to escape this. However, the damage is temporary, not permanent. Once you complete your settlements your score can often take a year to bounce back to the point you are getting loans again.
If you take a year to pay off your settlements, assume your credit is going to be fairly useless to you for two years. If it takes two years assume three to be back in the credit market again.
If your settlements are going to take you 4 to 5 years, and then add a year for your credit to recover, you should really take a look at chapter 13 bankruptcy as an alternative. You can call any number of debt settlement companies that may sell you on the idea of a 4 to 5 year plan, but it is not a good idea. One of the reasons their plan will take that long could be the high fees they charge that we do not, so I would not assume you are stuck taking that long. If you need or want to move through your settlements faster, just schedule a call with me and I can walk you through what an optimal settlement plan in your situation will look like.
The comments are open below. I encourage anyone with questions regarding Happy Money and Payoff.com to post below for dedicated expert feedback.
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