Why should I be worried about debt when there is IBR?

(Please Ask Questions and Answer Questions)
admisionquestion
Posts: 473
Joined: Sun Sep 26, 2010 12:16 am

Re: Why should I be worried about debt when there is IBR?

Postby admisionquestion » Tue Jul 03, 2012 1:00 pm

Clearly people DO misundstand IBR.

THen you are either claiming people misunderstand the way hospital incontinence systems work OR you are claiming they DO understand them...


in either case the link is not well established and it is making me mad :)

Not sure why its making me as mad as it is...

User avatar
moneybagsphd
Posts: 889
Joined: Mon Oct 03, 2011 11:07 pm

Re: Why should I be worried about debt when there is IBR?

Postby moneybagsphd » Tue Jul 03, 2012 1:01 pm

admisionquestion wrote:I dont mean to overreact, but I fail to see how complaints with a poorly designed (or so it seems) safety net for student debt, translates into an pro conservative discussion on medical care...

I think you're misconstruing IAFG's analogy. One of the arguments for "Obamacare" is the "free rider" system-- Hospitals have to provide emergency care, and if the patient can't pay then taxpayers pick up the tab.

User avatar
IAFG
Posts: 6665
Joined: Mon Jun 15, 2009 1:26 pm

Re: Why should I be worried about debt when there is IBR?

Postby IAFG » Tue Jul 03, 2012 1:03 pm

Colonel Angus wrote:
IAFG wrote:
rayiner wrote:This is why we can't have nice things (like safety nets). Because stupid fuckwads use it as carte blanche to make stupid fuckwad decisions.

"Since hospitals have to provide emergency treatment, imma skip the helmet on my motorcycle!"

Don't knock this line of reasoning, you may need a liver or other vital organ someday.

This is so non-responsive to the issue of safety net abusers that I don't even know where to start. Organ transplants are not covered by mandatory emergency care statutes. Needing a transplant generally has nothing to do with assuming emergency treatment will cover you. I have health insurance and thanks to ObamaCare/my husband/my job I almost certainly always will.

admisionquestion
Posts: 473
Joined: Sun Sep 26, 2010 12:16 am

Re: Why should I be worried about debt when there is IBR?

Postby admisionquestion » Tue Jul 03, 2012 1:03 pm

alwayssunnyinfl wrote:
admisionquestion wrote:@darwinism comment, THAT IS NOT DARWINISM. IT HAS NOTHING TO DO WITH DARWINISM. IT HAS NOTHING TO DO WITH HOW SPECIES EVOLVE OUT OF OTHER SPECIES OVER TIME. IT HAS TO DO WITH STUPID PEOPLE DYING. It does not indicate if these same stupid people had ample time to procreate prior... For all you know this system of extra fun ski time is causually linked to them being MORE LIKELY to have unprotected sex the night before...

Outed as never having heard of social darwinism.



"Darwinism at its best" does not imply a discussion of social Darwinism.

What does this have to do with social Darwinism?

Neither Spencer or Galton's talk of SD is supported by your example...

User avatar
Mr. Somebody
Posts: 867
Joined: Sat Dec 03, 2011 11:42 pm

Re: Why should I be worried about debt when there is IBR?

Postby Mr. Somebody » Tue Jul 03, 2012 1:04 pm

rayiner wrote:
admisionquestion wrote:can someone explain the tax bomb thing to me...

not going to be using IBR, so dont beat me up for not knowing, just curious.


If your IBR payments don't cover your accrued interest, it will continue to accrue (it will not, however, be capitalized--under IBR federal loans are simple interest). At the end of the period you'll owe like $500k. When that's forgiven it will count as income and will generate a $200k tax bill.


you can declare bankruptcy on the tax bill.

User avatar
SuperCerealBrah
Posts: 244
Joined: Sun Jul 01, 2012 6:34 pm

Re: Why should I be worried about debt when there is IBR?

Postby SuperCerealBrah » Tue Jul 03, 2012 1:05 pm

moneybagsphd wrote:
admisionquestion wrote:I dont mean to overreact, but I fail to see how complaints with a poorly designed (or so it seems) safety net for student debt, translates into an pro conservative discussion on medical care...

I think you're misconstruing IAFG's analogy. One of the arguments for "Obamacare" is the "free rider" system-- Hospitals have to provide emergency care, and if the patient can't pay then taxpayers pick up the tab.



Emergency rooms providing free care isn't an Obamacare thing. Hospitals have always been required by law to treat patients in the emergency room.


Edit: nevermind, I misconstrued YOUR argument lol I get what your saying now. Yes, true.
Last edited by SuperCerealBrah on Tue Jul 03, 2012 1:05 pm, edited 1 time in total.

User avatar
Colonel Angus
Posts: 77
Joined: Sat Jun 23, 2012 7:57 pm

Re: Why should I be worried about debt when there is IBR?

Postby Colonel Angus » Tue Jul 03, 2012 1:05 pm

admisionquestion wrote:Clearly people DO misundstand IBR.

THen you are either claiming people misunderstand the way hospital incontinence systems work OR you are claiming they DO understand them...


in either case the link is not well established and it is making me mad :)

Not sure why its making me as mad as it is...

All she is saying is people see a safety net and use it a am excuse to do stupid shit, like go to a bad law school at sticker, or ride a motorcycle without a helmet.

admisionquestion
Posts: 473
Joined: Sun Sep 26, 2010 12:16 am

Re: Why should I be worried about debt when there is IBR?

Postby admisionquestion » Tue Jul 03, 2012 1:05 pm

moneybagsphd wrote:
admisionquestion wrote:I dont mean to overreact, but I fail to see how complaints with a poorly designed (or so it seems) safety net for student debt, translates into an pro conservative discussion on medical care...

I think you're misconstruing IAFG's analogy. One of the arguments for "Obamacare" is the "free rider" system-- Hospitals have to provide emergency care, and if the patient can't pay then taxpayers pick up the tab.



Yes, thats a complaint with an incontinence based system... how does it relate to the comments about IBR?

other than that in both cases some risk is distributed...

User avatar
Mr. Somebody
Posts: 867
Joined: Sat Dec 03, 2011 11:42 pm

Re: Why should I be worried about debt when there is IBR?

Postby Mr. Somebody » Tue Jul 03, 2012 1:07 pm

kapachino wrote:IBR is subject to change, which a lot of people tend to forget. The thing about taking on so much debt and counting on IBR is that your financial life will be shit until IBR takes effect, if it indeed stays as it is when you sign up for it. It's not a good way to start out. Are you interested in doing PI? If so, there are two programs that could help you: LRAP (if your school has it) and PSFL. I'd look into those and then decide if taking on a mountain of debt is worth it.


I am matriculating this year. If I strike out at OCI I'm planning to use the IBR program for the rest of my life. From the research I've done it's virtually impossible that the government will remove IBR retroactively

User avatar
alwayssunnyinfl
Posts: 4100
Joined: Tue Mar 13, 2012 9:34 pm

Re: Why should I be worried about debt when there is IBR?

Postby alwayssunnyinfl » Tue Jul 03, 2012 1:07 pm

admisionquestion wrote:
alwayssunnyinfl wrote:
admisionquestion wrote:@darwinism comment, THAT IS NOT DARWINISM. IT HAS NOTHING TO DO WITH DARWINISM. IT HAS NOTHING TO DO WITH HOW SPECIES EVOLVE OUT OF OTHER SPECIES OVER TIME. IT HAS TO DO WITH STUPID PEOPLE DYING. It does not indicate if these same stupid people had ample time to procreate prior... For all you know this system of extra fun ski time is causually linked to them being MORE LIKELY to have unprotected sex the night before...

Outed as never having heard of social darwinism.



"Darwinism at its best" does not imply a discussion of social Darwinism.

What does this have to do with social Darwinism?

Neither Spencer or Galton's talk of SD is supported by your example...

Dude, you need to learn how to calm down. All anyone was saying was that people who go into law school knowing that they have no intention of actually paying their debt ruin the system for the rest of us. Yes, there should be tighter controls on how much debt schools can lard onto their students, but until then, gaming the system is not the solution.

Also, I, and no one else, ITT mentioned anything about conservative politics. I'm a flaming gay card-carrying liberal and Obama voter, so get that political trolling out of here.

User avatar
rayiner
Posts: 6184
Joined: Thu Dec 11, 2008 11:43 am

Re: Why should I be worried about debt when there is IBR?

Postby rayiner » Tue Jul 03, 2012 1:07 pm

admisionquestion wrote:One safety net is bad, so they all are?
or to be more generous are you saying, "because people misunderstand one safety net and make bad decisions they will do so with all safety nets..."


Nobody is saying safety nets are bad. I'm saying that people like the OP who plan on abusing the safety net to get a degree in "Law and Finger Painting" from a third-tier toilet make it harder for us to adopt safety nets for people who really need it.

User avatar
IAFG
Posts: 6665
Joined: Mon Jun 15, 2009 1:26 pm

Re: Why should I be worried about debt when there is IBR?

Postby IAFG » Tue Jul 03, 2012 1:08 pm

Mr. Somebody wrote:
rayiner wrote:
admisionquestion wrote:can someone explain the tax bomb thing to me...

not going to be using IBR, so dont beat me up for not knowing, just curious.


If your IBR payments don't cover your accrued interest, it will continue to accrue (it will not, however, be capitalized--under IBR federal loans are simple interest). At the end of the period you'll owe like $500k. When that's forgiven it will count as income and will generate a $200k tax bill.


you can declare bankruptcy on the tax bill.

The reason to fear debt is that it will ruin your financial life. Paying IBR for 25 years then declaring bankruptcy at what should be the peak of your earning years (with a healthy start on retirement savings) sounds like financial ruin to me. If it sounds good to you, go for it bro.

User avatar
moneybagsphd
Posts: 889
Joined: Mon Oct 03, 2011 11:07 pm

Re: Why should I be worried about debt when there is IBR?

Postby moneybagsphd » Tue Jul 03, 2012 1:10 pm

The motorcycle analogy seems particularly apt. If you end up needing the safety net, you're still going to take a fucking punishment

User avatar
Colonel Angus
Posts: 77
Joined: Sat Jun 23, 2012 7:57 pm

Re: Why should I be worried about debt when there is IBR?

Postby Colonel Angus » Tue Jul 03, 2012 1:10 pm

IAFG wrote:
Colonel Angus wrote:
IAFG wrote:
rayiner wrote:This is why we can't have nice things (like safety nets). Because stupid fuckwads use it as carte blanche to make stupid fuckwad decisions.

"Since hospitals have to provide emergency treatment, imma skip the helmet on my motorcycle!"

Don't knock this line of reasoning, you may need a liver or other vital organ someday.

This is so non-responsive to the issue of safety net abusers that I don't even know where to start. Organ transplants are not covered by mandatory emergency care statutes. Needing a transplant generally has nothing to do with assuming emergency treatment will cover you. I have health insurance and thanks to ObamaCare/my husband/my job I almost certainly always will.

Yep, I just meant it as far as head injuries = available organs

User avatar
sunynp
Posts: 1899
Joined: Tue May 24, 2011 2:06 pm

Re: Why should I be worried about debt when there is IBR?

Postby sunynp » Tue Jul 03, 2012 1:11 pm

Mr. Somebody wrote:
rayiner wrote:
admisionquestion wrote:can someone explain the tax bomb thing to me...

not going to be using IBR, so dont beat me up for not knowing, just curious.


If your IBR payments don't cover your accrued interest, it will continue to accrue (it will not, however, be capitalized--under IBR federal loans are simple interest). At the end of the period you'll owe like $500k. When that's forgiven it will count as income and will generate a $200k tax bill.


you can declare bankruptcy on the tax bill.


Tell you what, you do the research on this one. The IRS loves to let people discharge their tax bills, it is so easy that everyone does it! Have fun trolling someone else.

User avatar
Mr. Somebody
Posts: 867
Joined: Sat Dec 03, 2011 11:42 pm

Re: Why should I be worried about debt when there is IBR?

Postby Mr. Somebody » Tue Jul 03, 2012 1:11 pm

IAFG wrote:
Mr. Somebody wrote:
rayiner wrote:
admisionquestion wrote:can someone explain the tax bomb thing to me...

not going to be using IBR, so dont beat me up for not knowing, just curious.


If your IBR payments don't cover your accrued interest, it will continue to accrue (it will not, however, be capitalized--under IBR federal loans are simple interest). At the end of the period you'll owe like $500k. When that's forgiven it will count as income and will generate a $200k tax bill.


you can declare bankruptcy on the tax bill.

The reason to fear debt is that it will ruin your financial life. Paying IBR for 25 years then declaring bankruptcy at what should be the peak of your earning years (with a healthy start on retirement savings) sounds like financial ruin to me. If it sounds good to you, go for it bro.


I'm not saying its a good thing, honestly it will suck, but I just see so many people in the "Choosing a Law School forum" scaring people about "debt pwnage", which is not possible under IBR as the government takes care of your debt for you, and the tax bill is going to be dischargeable. You will end up not paying any of the debt.

User avatar
IAFG
Posts: 6665
Joined: Mon Jun 15, 2009 1:26 pm

Re: Why should I be worried about debt when there is IBR?

Postby IAFG » Tue Jul 03, 2012 1:13 pm

admisionquestion wrote:
moneybagsphd wrote:
admisionquestion wrote:I dont mean to overreact, but I fail to see how complaints with a poorly designed (or so it seems) safety net for student debt, translates into an pro conservative discussion on medical care...

I think you're misconstruing IAFG's analogy. One of the arguments for "Obamacare" is the "free rider" system-- Hospitals have to provide emergency care, and if the patient can't pay then taxpayers pick up the tab.



Yes, thats a complaint with an incontinence based system... how does it relate to the comments about IBR?

other than that in both cases some risk is distributed...

The point is that people who use the safety net as insurance for high-risk choices are fuckwads.

User avatar
Samara
Posts: 3245
Joined: Wed May 11, 2011 4:26 pm

Re: Why should I be worried about debt when there is IBR?

Postby Samara » Tue Jul 03, 2012 1:13 pm

IAFG wrote:
Colonel Angus wrote:
IAFG wrote:
rayiner wrote:This is why we can't have nice things (like safety nets). Because stupid fuckwads use it as carte blanche to make stupid fuckwad decisions.

"Since hospitals have to provide emergency treatment, imma skip the helmet on my motorcycle!"

Don't knock this line of reasoning, you may need a liver or other vital organ someday.

This is so non-responsive to the issue of safety net abusers that I don't even know where to start. Organ transplants are not covered by mandatory emergency care statutes. Needing a transplant generally has nothing to do with assuming emergency treatment will cover you. I have health insurance and thanks to ObamaCare/my husband/my job I almost certainly always will.

woooooosh

The joke is that those people not wearing helmets will be more likely to die, thus supplying organs for transplant.

admisionquestion
Posts: 473
Joined: Sun Sep 26, 2010 12:16 am

Re: Why should I be worried about debt when there is IBR?

Postby admisionquestion » Tue Jul 03, 2012 1:14 pm

alwayssunnyinfl wrote:
admisionquestion wrote:
alwayssunnyinfl wrote:
admisionquestion wrote:@darwinism comment, THAT IS NOT DARWINISM. IT HAS NOTHING TO DO WITH DARWINISM. IT HAS NOTHING TO DO WITH HOW SPECIES EVOLVE OUT OF OTHER SPECIES OVER TIME. IT HAS TO DO WITH STUPID PEOPLE DYING. It does not indicate if these same stupid people had ample time to procreate prior... For all you know this system of extra fun ski time is causually linked to them being MORE LIKELY to have unprotected sex the night before...

Outed as never having heard of social darwinism.



"Darwinism at its best" does not imply a discussion of social Darwinism.

What does this have to do with social Darwinism?

Neither Spencer or Galton's talk of SD is supported by your example...

Dude, you need to learn how to calm down. All anyone was saying was that people who go into law school knowing that they have no intention of actually paying their debt ruin the system for the rest of us. Yes, there should be tighter controls on how much debt schools can lard onto their students, but until then, gaming the system is not the solution.

Also, I, and no one else, ITT mentioned anything about conservative politics. I'm a flaming gay card-carrying liberal and Obama voter, so get that political trolling out of here.



Okay, I accept that nobody is TRYING to attack safety nets.

I just get super annoyed when people make egregious leaps in reasoning about incentives (something american conservatives have become very good at doing effectively)

I fail to see ANY evidence that providing free medical care (ER care especially) leads to people being more risk prone. The argument is still being made implicitly that the willingness of people to "Game" a purely financial decision is somehow analogous to people being more "risky" in a decision that is not purely financial. This sort of wiping away of real world facts (people dont like breaking legs) leads to misconstrued arguments against perfectly good insurance/risk distribution systems...

[its also the same type of reasoning that when pushed leads to crazy conclusions about the laffer curve...]


I've calmed down and admit i was being a spazz about everything besides the darwinism comment...that comment is still really stupid.

User avatar
IAFG
Posts: 6665
Joined: Mon Jun 15, 2009 1:26 pm

Re: Why should I be worried about debt when there is IBR?

Postby IAFG » Tue Jul 03, 2012 1:16 pm

Mr. Somebody wrote:

I'm not saying its a good thing, honestly it will suck, but I just see so many people in the "Choosing a Law School forum" scaring people about "debt pwnage", which is not possible under IBR as the government takes care of your debt for you, and the tax bill is going to be dischargeable. You will end up not paying any of the debt.

1) you still repay some of the debt (on the basis of your income)

2) the above is exactly the "debt pwnage" we describe. Now you know.

User avatar
moneybagsphd
Posts: 889
Joined: Mon Oct 03, 2011 11:07 pm

Re: Why should I be worried about debt when there is IBR?

Postby moneybagsphd » Tue Jul 03, 2012 1:18 pm

IAFG wrote:
Mr. Somebody wrote:

I'm not saying its a good thing, honestly it will suck, but I just see so many people in the "Choosing a Law School forum" scaring people about "debt pwnage", which is not possible under IBR as the government takes care of your debt for you, and the tax bill is going to be dischargeable. You will end up not paying any of the debt.

1) you still repay some of the debt (on the basis of your income)

2) the above is exactly the "debt pwnage" we describe. Now you know.

+1. I mean, everyone ITT has basically been telling you that IBR is tantamount to total financial ruin. It guarantees that you will not be financially solvent until after you turn 50. How is that not "debt pwnage"?

User avatar
albusdumbledore
Posts: 1132
Joined: Thu Nov 05, 2009 4:38 pm

Re: Why should I be worried about debt when there is IBR?

Postby albusdumbledore » Tue Jul 03, 2012 1:18 pm

Mr. Somebody wrote:I'm not saying its a good thing, honestly it will suck, but I just see so many people in the "Choosing a Law School forum" scaring people about "debt pwnage", which is not possible under IBR as the government takes care of your debt for you, and the tax bill is going to be dischargeable. You will end up not paying any of the debt.

You're gonna pay back most of the principal in your lifetime even with IBR payments. So, even if you can avoid the tax-bomb through bankruptcy (lol), intending to use IBR like this is retarded. The government's not fucking stupid. They know how to do math.

User avatar
Samara
Posts: 3245
Joined: Wed May 11, 2011 4:26 pm

Re: Why should I be worried about debt when there is IBR?

Postby Samara » Tue Jul 03, 2012 1:18 pm

Mr. Somebody wrote:I'm not saying its a good thing, honestly it will suck, but I just see so many people in the "Choosing a Law School forum" scaring people about "debt pwnage", which is not possible under IBR as the government takes care of your debt for you, and the tax bill is going to be dischargeable. You will end up not paying any of the debt.

What about IBR doesn't sound like debt pwnage?

Mr. Somebody wrote:From the research I've done it's virtually impossible that the government will remove IBR retroactively

Apparently, you haven't done the research showing that a large and growing contingency in Congress is willing to remove just about anything in the name of budget cuts and deficit reduction. And if it comes to that, I won't feel any trepidation about removing IBR from idiots who think a 25-year bankruptcy is NBD.

User avatar
sunynp
Posts: 1899
Joined: Tue May 24, 2011 2:06 pm

Re: Why should I be worried about debt when there is IBR?

Postby sunynp » Tue Jul 03, 2012 1:20 pm

Samara wrote:
Mr. Somebody wrote:I'm not saying its a good thing, honestly it will suck, but I just see so many people in the "Choosing a Law School forum" scaring people about "debt pwnage", which is not possible under IBR as the government takes care of your debt for you, and the tax bill is going to be dischargeable. You will end up not paying any of the debt.

What about IBR doesn't sound like debt pwnage?

Mr. Somebody wrote:From the research I've done it's virtually impossible that the government will remove IBR retroactively

Apparently, you haven't done the research showing that a large and growing contingency in Congress is willing to remove just about anything in the name of budget cuts and deficit reduction. And if it comes to that, I won't feel any trepidation about removing IBR from idiots who think a 25-year bankruptcy is NBD.


It is actually closer to 28 or 30 years. You can't discharge taxes in bankruptcy until 3 years after they have been filed. And the IRS has other recourse if they get liens in before you file. etc.

Also, IBR is only two years old this month, if you think IBR has become so entrenched that the American public (esp. boomers) won't want it repealed, you are mistaken.
Last edited by sunynp on Tue Jul 03, 2012 1:22 pm, edited 1 time in total.

User avatar
Samara
Posts: 3245
Joined: Wed May 11, 2011 4:26 pm

Re: Why should I be worried about debt when there is IBR?

Postby Samara » Tue Jul 03, 2012 1:21 pm

sunynp wrote:
Samara wrote:
Mr. Somebody wrote:I'm not saying its a good thing, honestly it will suck, but I just see so many people in the "Choosing a Law School forum" scaring people about "debt pwnage", which is not possible under IBR as the government takes care of your debt for you, and the tax bill is going to be dischargeable. You will end up not paying any of the debt.

What about IBR doesn't sound like debt pwnage?

Mr. Somebody wrote:From the research I've done it's virtually impossible that the government will remove IBR retroactively

Apparently, you haven't done the research showing that a large and growing contingency in Congress is willing to remove just about anything in the name of budget cuts and deficit reduction. And if it comes to that, I won't feel any trepidation about removing IBR from idiots who think a 25-year bankruptcy is NBD.


It is actually closer to 28 or 30 years. You can't discharge taxes in bankruptcy until 3 years after they have been filed. And the IRS has other recourse if they get liens in before you file. etc.

TYFT I didn't want to speculate on how long that takes and didn't feel like trying to figure it out. 25 years is scary enough to me.




Return to “Law School FAQ”

Who is online

Users browsing this forum: laowhynot109 and 1 guest