Income Based Repayment for Married Couple

[jaina]

[lrprn]

How would an income-based repayment plan work for a married couple, each repaying on their respective student loans and filing their taxes jointly?

If "income-based repayment plan" means filing Chapter 13 bankruptcy, then yes, you can include overdue taxes in your Ch !13 plan.

Unfortunately student loans in Ch 13 are a mess at the moment. Student loans are considered non-secured but cannot be discharged except under very unusual and rare circumstances. Most Ch 13 trustees will not allow loan payments to be made during Ch 13 - most lenders put the loans into forebearance but continue to charge interest throughout your Ch 13 plan length .

If you are considering Ch 13 bankruptcy, the best thing you can do for yourselves is to set up free or low-cost initial appointments with 3-4 experienced bankruptcy lawyers in your area. Go in with all your financial information and discuss how filing would impact your family in the long term. There's no obligation and you can find out if filing Ch 13 is a good idea in your situation or not.

Hang in there - keep us posted about what you find out.

[jaina]

No, the income-based plans are not for a bankruptcy. I was referring to regular student loan repayment options. My husband and I are planning on purchasing a home in a couple of years and we want to keep our DTI low so that we can qualify for a mortgage loan.

After all is said and done, my education (this includes my undergraduate degree and graduate degree) will put me at about 60-65K in debt. My husband will have roughly 50K himself. 115K in student loan debt in total, heh... ouch. I can only imagine what the minimum payment amounts will be under the standard 10 year option and I am certain would not be able to afford them! I've pretty much resigned myself to the fact that I will be paying on student loans my entire life. That's fine, but I also want to be able to buy a house, have kids, etc.

I've read that I could extend my repayment option to 25 years and keep the payments low, basing the amounts off of my adjusted gross income. I was just curious how this would work out if both my husband and I are in repayment.