Income-Based Repayment Can Have the Same Effect as Discharging Student Loans

If you have a federal student loan, and you’re not making enough to pay your loan payments (or you are completely unemployed), you may be looking for relief from your loans. In fact, you may be looking to explore options to discharge your loans in bankruptcy, or, if your unemployment is caused by medical issues, you may be interested in excusing your loan based on disability. Income-Based Payments But there is another option that is much easier and quicker to get: Income-based repayment (IBR). This is program allows borrowers to pay as little as $0 per month as a student loan payment. After 25 years, the balance due on your loan is forgiven (which is true in IBR no matter what your monthly payment is). A $0 payment has the same effect as a discharge from student loans: If you are unable to work for an extended period of time, you will pay the same thing–$0–every month as if your student loans were completely discharged. When you apply for IBR, student loan…

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