Left Biglaw - How to use new income for IBR?

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wildhaggis
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Joined: Sat Oct 15, 2011 1:47 pm

Left Biglaw - How to use new income for IBR?

Postby wildhaggis » Wed Mar 18, 2015 12:57 pm

I left biglaw about 6 months ago for the usual reasons.

I still have debt, of course, and no longer a biglaw income to service it like I was. So far, my overpayment of the loans while in biglaw has kept me from having to pay beyond my ability. That said, I'd like to jump on IBR with my current, much lower income. Obviously, my earnings last year do not reflect what I currently make. How do you navigate this whole process when there has been such a dramatic reduction in income? I just want to make sure I can service my loans properly.

Apologies if there's a thread on this. I looked around and couldn't find an answer that was on point.

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A. Nony Mouse
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Joined: Tue Sep 25, 2012 11:51 am

Re: Left Biglaw - How to use new income for IBR?

Postby A. Nony Mouse » Wed Mar 18, 2015 2:07 pm

Contact your loan servicer and say you need to change your payment plan to an income-based one and you need to certify your income to show your partial financial hardship. Basically there's a clause somewhere about if you have a significant life change (i.e. you take a lower-paying job) you can change your payment plan and certify your income at any time. It will basically entail faxing a copy of your current pay stub to them to prove your current income, and then they'll use that to calculate the payment. As loan stuff goes, it's relatively painless.

wildhaggis
Posts: 196
Joined: Sat Oct 15, 2011 1:47 pm

Re: Left Biglaw - How to use new income for IBR?

Postby wildhaggis » Wed Mar 18, 2015 2:24 pm

I appreciate your response.

One follow-up: I've racked up quite a bit of "advance payments," so to speak, where my overpayment of loans on my previous biglaw salary is used to satisfy future payments. Through this, I have several months of, for lack of a better term, "credit." Will changing the payment plan do away with this, or just result in the "credit" being chipped away at a slower pace (because my monthly payment will be lower; so, instead of being reduced by, for instance, $1,000 per month via the regular payment, it'll be reduced by $100 per month via the IBR monthly payment amount, or whatever it happens to be)?

Seems silly, but it's something I'm concerned about.

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AVBucks4239
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Joined: Wed Feb 10, 2010 11:37 pm

Re: Left Biglaw - How to use new income for IBR?

Postby AVBucks4239 » Thu Mar 19, 2015 10:08 am

wildhaggis wrote:I appreciate your response.

One follow-up: I've racked up quite a bit of "advance payments," so to speak, where my overpayment of loans on my previous biglaw salary is used to satisfy future payments. Through this, I have several months of, for lack of a better term, "credit." Will changing the payment plan do away with this, or just result in the "credit" being chipped away at a slower pace (because my monthly payment will be lower; so, instead of being reduced by, for instance, $1,000 per month via the regular payment, it'll be reduced by $100 per month via the IBR monthly payment amount, or whatever it happens to be)?

Seems silly, but it's something I'm concerned about.

I know you'd like to keep this confidential, but it's hard to give you advice without seeing the numbers (your debt, your income, your standard repayment, how much you've paid off thus far, etc.).




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