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Anonymous User wrote:Looking for refi advice. I am graduating and starting a firm job this fall but want to refi as soon as possible. I have a good credit score but will have very limited cash assets when I start. Specifically, I have the following questions.

1. I have looked at both SOFI and First Republic. FR looks to have lower rates but more stringent requirements for approval. Is this correct? Is it much easier to refi with SOFI quickly after starting employment?

2. Is it possible and/or wise to refi multiple times. Perhaps get an early refi with SOFI and shortly thereafter switch to FR for better rates? Are there any consequences to doing something like this?

RaceJudicata wrote:

Anonymous User wrote:Looking for refi advice. I am graduating and starting a firm job this fall but want to refi as soon as possible. I have a good credit score but will have very limited cash assets when I start. Specifically, I have the following questions.

1. I have looked at both SOFI and First Republic. FR looks to have lower rates but more stringent requirements for approval. Is this correct? Is it much easier to refi with SOFI quickly after starting employment?

2. Is it possible and/or wise to refi multiple times. Perhaps get an early refi with SOFI and shortly thereafter switch to FR for better rates? Are there any consequences to doing something like this?

Seems risky (assuming you get approved). I think there is some value to working for a bit to see how long you can/want to stay at the firm. Over the course of 1-2 years, itll probably be worth it to take the losses on interest while maintaining your gov't protections. Just my $0.02.

Anonymous User wrote:Looking for refi advice. I am graduating and starting a firm job this fall but want to refi as soon as possible. I have a good credit score but will have very limited cash assets when I start. Specifically, I have the following questions.

1. I have looked at both SOFI and First Republic. FR looks to have lower rates but more stringent requirements for approval. Is this correct? Is it much easier to refi with SOFI quickly after starting employment?

2. Is it possible and/or wise to refi multiple times. Perhaps get an early refi with SOFI and shortly thereafter switch to FR for better rates? Are there any consequences to doing something like this?

Anonymous User wrote:Oh here, that is my thought process as well. I understand there is some risk associated with the refi but is the downside really that horrible? From my understanding, it is pretty hard to get fired before getting to year 3 unless the economy tanks.

I would like to pay off debt like a fiend for 3 years and be done with it. Not sure if the protections are worth the 5 figures in savings I'd be passing up. Is partial refi of the high rate loans a viable strategy to hedge risk here?

Also, are the sub 3% rates FR advertises legit? And what's the deal with the 4 year pay-off?

SmokeytheBear wrote:That said, FR requires you to have worked for 2 years before you can re-fi.

SmokeytheBear wrote:

Anonymous User wrote:Oh here, that is my thought process as well. I understand there is some risk associated with the refi but is the downside really that horrible? From my understanding, it is pretty hard to get fired before getting to year 3 unless the economy tanks.

I would like to pay off debt like a fiend for 3 years and be done with it. Not sure if the protections are worth the 5 figures in savings I'd be passing up. Is partial refi of the high rate loans a viable strategy to hedge risk here?

Also, are the sub 3% rates FR advertises legit? And what's the deal with the 4 year pay-off?

I just re-fied my high rate loans at 2.35% (I did not refi my undergrad loans which were between 1.35% and 3%--riding those into the sunset). Loan specifically states that if you pay it off within 48 months they will credit your account for up to 2% of the interest paid (i.e. you'd just pay basically 0.35%).

That said, FR requires you to have worked for 2 years before you can re-fi.

Anonymous User wrote:Oh here, that is my thought process as well. I understand there is some risk associated with the refi but is the downside really that horrible? From my understanding, it is pretty hard to get fired before getting to year 3 unless the economy tanks.

I would like to pay off debt like a fiend for 3 years and be done with it. Not sure if the protections are worth the 5 figures in savings I'd be passing up. Is partial refi of the high rate loans a viable strategy to hedge risk here?

Also, are the sub 3% rates FR advertises legit? And what's the deal with the 4 year pay-off?

Alt123 wrote:Not sure if this is the right place for my question, I tried doing some searches and didn't find any answers.

RE: PAYE/REPAYE/IBR and associated 'tax bomb'

Maybe I am mistaken here, but it seems like people are making this a bigger deal than it really is, no? I appreciate the idea of never having to deal with discharge of indebtedness income, but it seems like most of the posts I read on TLS seem to forget that the IRS is extremely favorable of individuals who seek to enroll in payment plans. I've had clients who have committed clear trust fund penalty violations, which is a criminal tax charge, evade being cleansed with holy federal agency fire simply by agreeing to get on a payment plan to cover the difference when times were tough. Wouldn't the supposed 30 year tax bomb at the end of PAYE/REPAYE/IBR plans be the same?

Johann wrote:

Alt123 wrote:Not sure if this is the right place for my question, I tried doing some searches and didn't find any answers.

RE: PAYE/REPAYE/IBR and associated 'tax bomb'

Maybe I am mistaken here, but it seems like people are making this a bigger deal than it really is, no? I appreciate the idea of never having to deal with discharge of indebtedness income, but it seems like most of the posts I read on TLS seem to forget that the IRS is extremely favorable of individuals who seek to enroll in payment plans. I've had clients who have committed clear trust fund penalty violations, which is a criminal tax charge, evade being cleansed with holy federal agency fire simply by agreeing to get on a payment plan to cover the difference when times were tough. Wouldn't the supposed 30 year tax bomb at the end of PAYE/REPAYE/IBR plans be the same?

most likely, yes. but that involves more discretion and is not codified, so lawyers are skeptical of it. but yeah, more likely than not the IRS will set you up on another nice payment plan. there's also probably a lot of room for tax planning here that people overlook as well.

Alt123 wrote:

Johann wrote:

Alt123 wrote:Not sure if this is the right place for my question, I tried doing some searches and didn't find any answers.

RE: PAYE/REPAYE/IBR and associated 'tax bomb'

Maybe I am mistaken here, but it seems like people are making this a bigger deal than it really is, no? I appreciate the idea of never having to deal with discharge of indebtedness income, but it seems like most of the posts I read on TLS seem to forget that the IRS is extremely favorable of individuals who seek to enroll in payment plans. I've had clients who have committed clear trust fund penalty violations, which is a criminal tax charge, evade being cleansed with holy federal agency fire simply by agreeing to get on a payment plan to cover the difference when times were tough. Wouldn't the supposed 30 year tax bomb at the end of PAYE/REPAYE/IBR plans be the same?

most likely, yes. but that involves more discretion and is not codified, so lawyers are skeptical of it. but yeah, more likely than not the IRS will set you up on another nice payment plan. there's also probably a lot of room for tax planning here that people overlook as well.

Thanks for the answer, I really appreciate the insight. I can see why the lack of codification would make us all uneasy.

beach_terror wrote:

El Pollito wrote:fedloans is a criminal organization and failed to follow my very clear instructions on how to allocate my refi (THE FUCKING OBVIOUS WAY) and paid off like staffords before grad plus, and has failed to fix it after like 3 weeks and 5 calls, so I'm just refinancing the rest out of spite. also i plan to provoke my class action lawyer friend to sue them

Would be very surprised if there isn't an arbitration clause in the agreement somewhere. I paid off like 20k to my fedloans one time and they fucked up the allocation too, so I asked them to fix it. When they "fixed it," the system thought I was in default since it was applied as a credit toward future payments (instead of to principal) and they undid all of this without thinking of the consequences, so I got a bunch of "we tried to contact you for x months, you are in default and we are sending this to the CRAs and it'll impact your credit score" emails. I had to spend 5+ hours on the phone with different people trying to sort it out because nobody could understand what they did even after I explained to them how the system must work.

Refinanced with Sofi the day after it was sorted out. Fuck Fedloan. Fired up just thinking about that shitty fucking company.

Johann wrote:

Alt123 wrote:

Johann wrote:

Alt123 wrote:Not sure if this is the right place for my question, I tried doing some searches and didn't find any answers.

RE: PAYE/REPAYE/IBR and associated 'tax bomb'

Maybe I am mistaken here, but it seems like people are making this a bigger deal than it really is, no? I appreciate the idea of never having to deal with discharge of indebtedness income, but it seems like most of the posts I read on TLS seem to forget that the IRS is extremely favorable of individuals who seek to enroll in payment plans. I've had clients who have committed clear trust fund penalty violations, which is a criminal tax charge, evade being cleansed with holy federal agency fire simply by agreeing to get on a payment plan to cover the difference when times were tough. Wouldn't the supposed 30 year tax bomb at the end of PAYE/REPAYE/IBR plans be the same?

most likely, yes. but that involves more discretion and is not codified, so lawyers are skeptical of it. but yeah, more likely than not the IRS will set you up on another nice payment plan. there's also probably a lot of room for tax planning here that people overlook as well.

Thanks for the answer, I really appreciate the insight. I can see why the lack of codification would make us all uneasy.

and im also assuming you knwo that tax bomb is only to the EXTENT OF YOUR ASSETS. if you have 0 assets, you have 0 tax bomb regardless of the debt forgiven. if you have 100k of assets and 250k of debt forgiven and no other debt, you pay tax on 100k despite a 250k forgiveness. if you have 350k of debt and 100k of assets, and 250k is forgiven in one year, you have 0 tax bomb because your assets - liabilities (not forgiven) is still 0. so like i said lots of planning room especially if you can stagger when your debt becomes due.

Johann wrote:

Alt123 wrote:

Johann wrote:

Alt123 wrote:Not sure if this is the right place for my question, I tried doing some searches and didn't find any answers.

RE: PAYE/REPAYE/IBR and associated 'tax bomb'

Maybe I am mistaken here, but it seems like people are making this a bigger deal than it really is, no? I appreciate the idea of never having to deal with discharge of indebtedness income, but it seems like most of the posts I read on TLS seem to forget that the IRS is extremely favorable of individuals who seek to enroll in payment plans. I've had clients who have committed clear trust fund penalty violations, which is a criminal tax charge, evade being cleansed with holy federal agency fire simply by agreeing to get on a payment plan to cover the difference when times were tough. Wouldn't the supposed 30 year tax bomb at the end of PAYE/REPAYE/IBR plans be the same?

most likely, yes. but that involves more discretion and is not codified, so lawyers are skeptical of it. but yeah, more likely than not the IRS will set you up on another nice payment plan. there's also probably a lot of room for tax planning here that people overlook as well.

Thanks for the answer, I really appreciate the insight. I can see why the lack of codification would make us all uneasy.

and im also assuming you knwo that tax bomb is only to the EXTENT OF YOUR ASSETS. if you have 0 assets, you have 0 tax bomb regardless of the debt forgiven. if you have 100k of assets and 250k of debt forgiven and no other debt, you pay tax on 100k despite a 250k forgiveness. if you have 350k of debt and 100k of assets, and 250k is forgiven in one year, you have 0 tax bomb because your assets - liabilities (not forgiven) is still 0. so like i said lots of planning room especially if you can stagger when your debt becomes due.

Anonymous User wrote:About 5 years out
114k (from 144k at peak) debt
Current salary 85k
I pay $670 every other Friday when pay check hits
Refinanced 1 year ago with Earnest at 5.51% fixed 8 years 2 months remaining
I also have a new $315k mortgage conventional 30 year fixed 3.25% Wells Fargo

Pokemon wrote:

Johann wrote:

Alt123 wrote:

Johann wrote:

Alt123 wrote:Not sure if this is the right place for my question, I tried doing some searches and didn't find any answers.

RE: PAYE/REPAYE/IBR and associated 'tax bomb'

Maybe I am mistaken here, but it seems like people are making this a bigger deal than it really is, no? I appreciate the idea of never having to deal with discharge of indebtedness income, but it seems like most of the posts I read on TLS seem to forget that the IRS is extremely favorable of individuals who seek to enroll in payment plans. I've had clients who have committed clear trust fund penalty violations, which is a criminal tax charge, evade being cleansed with holy federal agency fire simply by agreeing to get on a payment plan to cover the difference when times were tough. Wouldn't the supposed 30 year tax bomb at the end of PAYE/REPAYE/IBR plans be the same?

most likely, yes. but that involves more discretion and is not codified, so lawyers are skeptical of it. but yeah, more likely than not the IRS will set you up on another nice payment plan. there's also probably a lot of room for tax planning here that people overlook as well.

Thanks for the answer, I really appreciate the insight. I can see why the lack of codification would make us all uneasy.

and im also assuming you knwo that tax bomb is only to the EXTENT OF YOUR ASSETS. if you have 0 assets, you have 0 tax bomb regardless of the debt forgiven. if you have 100k of assets and 250k of debt forgiven and no other debt, you pay tax on 100k despite a 250k forgiveness. if you have 350k of debt and 100k of assets, and 250k is forgiven in one year, you have 0 tax bomb because your assets - liabilities (not forgiven) is still 0. so like i said lots of planning room especially if you can stagger when your debt becomes due.

It was a few years ago when I read the provision but on your second example you pay tax on the entire 250k but the amount paying cannot go over 100k. On 250k forgiveness, your fed tax might be around 90-100k, so in that case you are not getting any additional forgiveness due to insolvency limitation.

El Pollito wrote:

Anonymous User wrote:About 5 years out
114k (from 144k at peak) debt
Current salary 85k
I pay $670 every other Friday when pay check hits
Refinanced 1 year ago with Earnest at 5.51% fixed 8 years 2 months remaining
I also have a new $315k mortgage conventional 30 year fixed 3.25% Wells Fargo

uh you should refi your refi

Johann wrote:

El Pollito wrote:

Anonymous User wrote:About 5 years out
114k (from 144k at peak) debt
Current salary 85k
I pay $670 every other Friday when pay check hits
Refinanced 1 year ago with Earnest at 5.51% fixed 8 years 2 months remaining
I also have a new $315k mortgage conventional 30 year fixed 3.25% Wells Fargo

uh you should refi your refi

Johann wrote:

Pokemon wrote:

Johann wrote:

Alt123 wrote:

Johann wrote:

Alt123 wrote:Not sure if this is the right place for my question, I tried doing some searches and didn't find any answers.

RE: PAYE/REPAYE/IBR and associated 'tax bomb'

Maybe I am mistaken here, but it seems like people are making this a bigger deal than it really is, no? I appreciate the idea of never having to deal with discharge of indebtedness income, but it seems like most of the posts I read on TLS seem to forget that the IRS is extremely favorable of individuals who seek to enroll in payment plans. I've had clients who have committed clear trust fund penalty violations, which is a criminal tax charge, evade being cleansed with holy federal agency fire simply by agreeing to get on a payment plan to cover the difference when times were tough. Wouldn't the supposed 30 year tax bomb at the end of PAYE/REPAYE/IBR plans be the same?

most likely, yes. but that involves more discretion and is not codified, so lawyers are skeptical of it. but yeah, more likely than not the IRS will set you up on another nice payment plan. there's also probably a lot of room for tax planning here that people overlook as well.

Thanks for the answer, I really appreciate the insight. I can see why the lack of codification would make us all uneasy.

and im also assuming you knwo that tax bomb is only to the EXTENT OF YOUR ASSETS. if you have 0 assets, you have 0 tax bomb regardless of the debt forgiven. if you have 100k of assets and 250k of debt forgiven and no other debt, you pay tax on 100k despite a 250k forgiveness. if you have 350k of debt and 100k of assets, and 250k is forgiven in one year, you have 0 tax bomb because your assets - liabilities (not forgiven) is still 0. so like i said lots of planning room especially if you can stagger when your debt becomes due.

It was a few years ago when I read the provision but on your second example you pay tax on the entire 250k but the amount paying cannot go over 100k. On 250k forgiveness, your fed tax might be around 90-100k, so in that case you are not getting any additional forgiveness due to insolvency limitation.

nah thats not right. the code section reads as an exclusion from gross income, and your income is what is eventually taxed.
https://www.law.cornell.edu/uscode/text/26/108