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Los Angeles Bankruptcy Lawyers / Palmdale Student Loans Repayment Lawyer

Palmdale Student Loans Repayment Lawyers

It is rewarding when you graduate and earn a degree in your chosen field, but many people will not immediately secure that high-paying job as they expected. If you funded your education through student loans, your financial situation may become challenging. You have high monthly payments, in addition to your regular living expenses, food, and transportation. If you begin to fall behind with no end in sight, you might wonder about your options.

Our team at Wadhwani & Shanfeld is prepared to assist with getting back on top of your education debts, so please contact us today. We can set up a consultation with a Palmdale student loan repayment lawyer.

Income-Based Repayment 

Fortunately, an income-based repayment (IBR) plan might work to help resolve student loan debt. As the term suggests, your payments will be adjusted to your earnings. However, there are many more details involved with the process, so legal representation is crucial.

The point of IBR is that your monthly payments are capped at a percentage of your discretionary income. To calculate this value, you use your tax records and reduce gross income according to the federal poverty level. The formula is complex, but the outcome is that your discretionary income affects your minimum monthly payment toward income-based repayment.

You will not fall into default on your student loans if you continue to pay, but the downside is that you may not make a dent with the principal. 

Basic Repayment Formulas 

The details about IBR vary according to when you signed for student loans. July 1, 2014 is the date that matters for purposes of repayment.

Loans prior to that date fall under Old IBR rules. Your maximum payment is limited to 15 percent of your discretionary income. You will have a 25-year repayment period. Any student loans taken after this date are considered New IBR programs. Repayment is capped at 10 percent of your discretionary income, but you must pay within 20 years.

Once the repayment period is over, all remaining student loan debt could be eliminated under certain circumstances.

Income-Contingent Repayment

If you are like one of millions of graduates who borrowed for higher education, you could be struggling to make monthly student loan payments on top of your other bills. Even as you are working you establish your career and make plans for the future, debt weighs heavy and you cannot afford to pay. In such a situation, you might wonder if there are options to resolve your student loans and help you stay on top of your finances.

The solution for many people in a similar position is income-contingent repayment (ICR), which sets your monthly payments according to earnings. Our lawyers at Wadhwani & Shanfeld can explain the pros and cons, as we are experienced in developing strategies for those struggling with debt. Please contact us to speak to a Palmdale student loans – income-contingent repayment lawyer. We can set up a consultation to discuss details, and some basics about ICR are informative.

Summary of ICR Plans 

For most borrowers, the standard repayment plan for student loans will be 10 years, after the initial grace period. Depending on how much you borrowed and interest rates, the monthly payment may be more than you can afford with other monthly bills. Income-contingent repayment adjusts your monthly payment based upon your discretionary income.

An important factor to note about ICR is that your payment period will be extended to 25 years, which is a long time to be paying interest on a loan. Your monthly payments might not cover the interest. 

How ICR Works 

Your discretionary income is the starting point, and you find it by reviewing your tax records. It is calculated at your adjusted gross income (AGI) minus the federal poverty line. Once you have this figure, your monthly payments under the ICR will be capped at 20 percent of your discretionary income.

The calculations can be complicated, and you want to make sure you work out a student loan repayment plan that is the most beneficial to you.

Advising You on All Options for Student Loans 

There are plenty of pros and cons to the ICR for student loan debt, which is why it is important to trust our team at Wadhwani & Shanfeld to guide you. We want to ensure you understand the full value of what you will pay, since there may be other options. Our Southern California student loan debt lawyers can also explain:

  • Income-based repayment (IBR), which also uses a formula to assess a lower monthly payment; and,
  • Pay-as-You-Earn (PAYE), a program that includes a low cap on discretionary income but imposes strict eligibility rules.

Pay as You Earn Repayment

It is common for student loan borrowers to fall behind on payments, as they are still trying to get established in their chosen field and earn a living. Along with other living expenses, monthly payments can make it difficult to make ends meet. Your credit could suffer if you cannot pay the minimum, and fees and interest add up. Fortunately, there are multiple options for resolving student loan debt without bankruptcy. Pay as You Earn (PAYE) is an opportunity to lower your monthly payments according to income.

There are strict rules to qualify for PAYE, but it offers numerous advantages for those who are struggling financially. Wadhwani & Shanfeld is knowledgeable about the criteria, so we can explain whether PAYE is a suitable solution for your circumstances. Please contact us to speak to a member of our team. We can schedule a consultation with a Palmdale student loans – Pay as You Earn repayment lawyer, and a summary of the process is helpful.

PAYE Overview 

As a standard repayment plan, federal student loan borrowers have 10 years to pay back the amount after an initial grace period. If you cannot keep up with the minimum monthly payments, late fees and interest will add up. Your credit could take a huge hit with the student loan debt hanging over your head.

Pay-as-You-Earn is one of several student loan repayment plans that adjusts your minimum monthly payment to an amount you can afford. A benefit of PAYE over other plans is the treatment of interest, which is a reduced amount and will lead you to pay less on the loan overall. 

How it Works 

Like other student loan repayment plans, PAYE starts with an assessment of your discretionary income. You calculate this amount by taking your adjusted gross income from tax records. This amount is reduced by 150 percent of the federal poverty level, which will vary based upon your household size.

With your discretionary income figured, you now multiply that amount by 10 percent to see what you pay over 12 months. If you pay this amount for 20 years, you should be able to discharge the remaining balance.

We Can Advise You on PAYE 

One of the biggest challenges with Pay-as-You-Go is determining if it is a wise decision, compared to other student loan repayment plans. Wadhwani & Shanfeld will review your circumstances to determine whether income-based repayment (IBR) or income-contingent repayment (ICR) would be beneficial options.

Once we decide on a strategy that best protects your financial interests, our Southern California student loan debt lawyers will handle essential tasks and paperwork to complete the PAYE process.

Why You Need a Lawyer 

Even the basics on income-based repayment are complicated, and you must consider it along with other forms of student loan debt relief. You might qualify for other programs that benefit your circumstances, so trust Wadhwani & Shanfeld to guide you in decision making.

After working with you to determine whether IBR is a wise option, our Southern California student loan debt lawyers will handle the rest. We will prepare the proper paperwork, supported by income information, so you get approval promptly.

Trust our Palmdale Student Loans Repayment Lawyer for Help

It is tough to get student loans discharged in bankruptcy, but there are options to help you get out from under the weight of debt. Wadhwani & Shanfeld will guide you through the process, and we can explain other options that might suit your needs. Please contact us to schedule a consultation with a Southern California student loan debt lawyer today.

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