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0 pointsjavagram9y ago0 comments

Give some sort of limit - 10/20/30 years? - and some sort of max% of income - 10%?. If the loan isn't paid off by the end of the limit at a max % of income, then the loan can then be discharged by bankruptcy.

This already exists in the USA. It's called Income Based Repayment and the outstanding balance of loans and interest is forgiven after 30 years of making payments capped to a certain percentage of income. There is a tax penalty that may or may not still exist in 30 years.

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learc839y ago

Under the new plan (retroactively available to old borrowers), it's only 20 years not 30.

And Even if they don't fix the tax penalty, there's an insolvency exception. You're only taxed on the amount forgiven above insolvency.

If you manage to go 20 years without paying it's likely you have far more liabilities than assets so you probably won't pay any tax penalty.

j / k navigate · click thread line to collapse

0 pointsjavagram9y ago0 comments

0 comments

learc839y ago

Under the new plan (retroactively available to old borrowers), it's only 20 years not 30.

And Even if they don't fix the tax penalty, there's an insolvency exception. You're only taxed on the amount forgiven above insolvency.

If you manage to go 20 years without paying it's likely you have far more liabilities than assets so you probably won't pay any tax penalty.

j / k navigate · click thread line to collapse