Woman Upsets Barefoot Investor by Never Paying Credit Card Debt?

bargain huntress on 05/04/2023 - 13:46

So in his latest email newsletter he goes off on this lady, it was even reported in the daily mail. https://www.dailymail.co.uk/news/article-11939679/Barefoot-i…

She reckons she has gotten away with not paying $50000 in credit card debt.

Thanks For NOTHING, Barefoot
Hi Scott,
Some years ago I wrote to you asking for advice as we were heavily in debt and finding it a bit overwhelming. Now my husband and I are debt free, our credit score is excellent, we have money in the bank, and we’re paying off a mortgage. How did we do it? Not by listening to your advice, which was to get two jobs each and slug it out paying thousands in interest and principal to banks to pay off our huge credit card debt.
No, instead we simply stopped paying the credit cards back. The amount we owed was $30,000, which increased to $50,000 with interest. Yet I learnt that, as credit cards are unsecured loans, you don’t actually have to pay them back. So we sat and waited for seven years and, lo and behold, we are no longer in debt, and have excellent credit scores. I would love you to share this with your readers – unlikely, I know! But it’s probably a better tip than working your bum off giving billion-dollar profitable companies money they don’t deserve.
Lisa
Hi Lisa,
I’ve been in the trenches as a financial counsellor and I’ve never seen a lender roll over and not try and recover a $30,000–$50,000 debt (which they have every right to do – because you are legally liable to repay the debt).
Regardless, let’s be clear about what’s going on here:
Someone lent you money in good faith … and you intentionally ripped them off.
You say: “It’s probably a better tip than working your bum off giving billion-dollar profitable companies money they don’t deserve.”
I say: (nothing, my mouth is open, but no words are coming out).
I can’t help but wonder how having this mindset spills over to other areas of your life: like how you fill out your timesheet at work, how you write in financial questions to a newspaper, and what sort of example this sets for your kids.
You may think you’ve got away with this, but you really haven’t.
You went bankrupt seven years ago.

So TBI's respose seemed to be skeptical at first, and then shocked. He wrote more about the ethics of the situation than it's practicalities. And so that's what I don't understand- the practicalities.

Is this a real situation?
Ignoring the morality for a moment - Does this actually work?
Hypothetically if you can live with seven years of debt collectors harassing you, can you spend $30k with no intention of ever paying it, wait it out, and effectively get away with stealing it?
I've read people talk about doing this when they are old and expecting to die relatively soon, but I assumed the lender would take stuff from the estate?

Financial

Comments

  • Xistn on 05/04/2023 - 13:52
    +71

    Debt collectors are like herpies… its for life.

    • alxr0101 on 06/04/2023 - 08:09
      -8

      Debt collectors only chase you if the debt is still capable of enforcement…not after this many years….that's not "for life".

      • alxr0101 on 06/04/2023 - 19:29
        -5

        geez people are looney..downvoted because I stated the logical facts. Debt collectors will not chase you for unsecured debts beyond (edit) 6 years because there is no debt collectable after 6 years.

        And @rlf…they had opportunity to pursue you for a further 4 years…clearly they couldnt be bothered. Does not mean that your debt was not capable of recovery.

    • rlf on 06/04/2023 - 10:41

      Wrong. Mine stopped after 2 years.

      • nutcase on 06/04/2023 - 16:55
        +46

        Debt collectors or herpes?

    • stedmaster on 06/04/2023 - 11:51
      +3

      I know with Baycorp, If you don't have anything in your name on record that they can come after, i.e cars or property, and they can't get a hold of you during the 7 years, it can clear after 7 years.

      • IgorPrev on 06/04/2023 - 17:49
        +14

        Why anyone would want $50k for free and be damned for 7 years is beyond me. You can't apply for so many things with a bad credit rating.

        There are far better ways to get $50k

        • ripprind on 07/04/2023 - 08:52

          Same , i dont understand whats the point of the OP question.
          30k for living off the books/under the radar for 7 years?!?

          I guess if you are religious, and believeyou have many lives to waste for these scams maybe its a good idea. But if you believe you only live once then its sounds quite stupid.

        • RefusdClassification on 08/04/2023 - 06:48
          +1

          For the average OzBargainer, $50,000 is 6 weeks pay, so not worth the hassle. For a poor person though, it is almost 2.5 years worth of pension.

        • 2024 on 10/04/2023 - 09:23
          +1

          Funnily enough, most of those result in the aforementioned herpes!

    • Korban Dallas on 07/04/2023 - 03:32

      Yep. Milton Graham has sent me 100s of SMS for $34 that I actually paid over the last 3 years.

  • MrMarket on 05/04/2023 - 13:53
    +33

    not in Australia, they will chase you for it and if that doesn't work they will sell the debt to debt collector and debt collector will go after you

    • KangaDrew on 05/04/2023 - 14:08
      +30

      And if that doesn't work, the debt collector will re-sell your debt to another debt collector who will add their own additional fees (as well as the debt purchase fees) on top and the second debt collector will go after you instead.

      • bargain huntress on 05/04/2023 - 14:37
        +9

        What is having a debt collector after you like? They cant break your legs anymore right?

        • Seraphin7 on 05/04/2023 - 14:51
          +19

          It depends on whether you're dealing with the debt collector … or one of their "associates" who happens to know an "unrelated" odd jobs man.

        • MrMarket on 05/04/2023 - 14:53
          +17

          they can break your financial score and record which is far far worse

          creditor like debt collector can applied through court to bankrupt you if you don't pay back the debt or ignore them
          they then appoint a trustees to manage your bankruptcy and eventually you have something valuable they can get their hand on it.

          they do this all the time as part of their job and they are very good at doing it.

          there is nothing good come out of not paying your debt, you probably end up paying the through bankruptcy proceeding and then you get a bad credit record

        • LiteDough on 05/04/2023 - 15:02
          +3

          Anecdotally, my previous company received a letter saying one of our employees had debt with a credit collector and to please withhold $xxx from each payslip as part of payment plan. I can't remember if it actually told us to EFT/remit the money to them instead or not.

          Tbh even though it was a legit company… Employee did not acknowledge the letter, so neither did our finance team. But it was probably a genuine credit collection attempt; otherwise how did they find out the employee worked for our company? They probably spoke with the employee to set up a payment plan (or find out where they are working) or did some employment check.

          • DoctorCalculon on 05/04/2023 - 19:30
            +2

            @LiteDough:

            did some employment check.

            Somehow got access to their credit report which documents your employers.

          • yadq on 05/04/2023 - 20:28
            +4

            @LiteDough: LinkedIn? Or other social media? People share such info to the public (and scamers) for free..

          • Serapis on 05/04/2023 - 22:16
            +3

            @LiteDough: They can apply to court for a garnishee order otherwise, and slap more fees on for that

            They employ / hire skip tracers to locate where you work, live or frequent

          • idonotknowwhy on 06/04/2023 - 10:27
            +2

            @LiteDough:

            otherwise how did they find out the employee worked for our company?

            Sorry to hijack but you've reminded me about something i always wondered.

            With private car park companies like CarEPark and Willsons, when stay too long and get a ticket from them.
            How do they get your name/address just based on your number plate?
            Shouldn't it only be police / government / councils who can look this up?

            • bmerigan on 06/04/2023 - 22:49
              +2

              @idonotknowwhy: They used to have access to the database to look up your rego, but I read they no longer have access as of a few months ago.

        • DoctorCalculon on 05/04/2023 - 19:28
          +4

          They cant break your legs anymore right?

          If they are on OzBargain, they probably have Bikies on their payroll to break those legs.

        • Spic3y on 06/04/2023 - 07:42
          +23

          I've had one chasing me for a Telstra early account termination charge.

          Years ago I had Telstra ring up to tell me they can do me a better deal on my mobile service. They tooled around and figured out that judging by my usage they could save me $xx dollars on my phone bill by 'upgrading' my plan. I was assured this would save me money.

          The next three consecutive bills were more expensive than what I was paying so I called up to change back. Apparently my old plan was a really old one that wasn't available anymore (surprise, surprise) so I just lowered my monthly charge.

          My next bill was like $1500 because it had an early termination of contract. I called them up to contest the charge because the salesman told me that the plan he chose for me would be more economical, not more expensive.

          They said it's 'already in the system' and there wasn't anything they could do. While all this was happening, I got a new job which would involve spending a full year in a really remote place with no phone reception or mail service so I just stopped acknowledging the letters.

          Apparently the bill had been passed on to collectors but because I was uncontactable they started scouring the phone book for people with the same last name. They eventually tracked my mum and dad down through this method and started harassing them.

          Little did they know but dad doesn't have much patience for stuff like this (I know you'll laugh, but he is literally a 'bikie' too) so he started having fortnightly 'tell the collectors to go get knotted' calls.

          Once I returned to Australia, I wrote a letter to the Telecommunications Ombudsman and explained that Telstra sold me something I didn't need and then charged me to remove it and everything stopped.

          TLDR: Telstra were scummy, I told them to 'place their bill somewhere moist and smelly'. Debt collectors got involved, bikies got involved, telecommunications ombudsmen got involved then in got sorted.

          If a company chased me this much over $1k I struggle to believe they would just erase $50k of someone's debt?

          • aekt on 06/04/2023 - 13:44
            +4

            @Spic3y: Funny you mentioned Telstra - I had two dealings with their billing depts.
            First - back in the end of 2000 I moved from NQ to Sydney. I had Telstra landline in NQ and tried to pay my final bill before I disconnect the line and move. Rang up their billing dept got the outstanding amount on the day. This was back when paying bill involved going to post office to get physical bill scanned, so did that. A month or so after I got a new bill to my PO box in Sydney with about $1-2 charge with a big bold letters that I do not have to pay this bill as the value is below their threshold ($10 if I recall correctly). Two months after, I then received another bill - same value + $10 "late payment fee". I can then pay :D

            Second - moving again in Sydney to an adjacent suburb and had an ADSL service moved. No bill from them for the next 10 months then got a call from their billing dept that I haven't been paying for the past 10 months - just under a grand in value. Apparently what happened was while they moved my service address, they didn't move my billing address…

            • bargain huntress on 06/04/2023 - 15:06
              +3

              @aekt: lol @ the $10

              • xsacha on 06/04/2023 - 19:15
                +2

                @bargain huntress: I had a cable plan with Telstra about a decade ago for 3 months. Cancelled it after 2.5 months and was expecting a refund for the 0.5 month I paid in advance.
                I had discussed it when I cancelled and they explained they will repay the pro-rata.

                A little later I got a bill for the next month ($80) in advance. On the phone again and I had to explain that I had already cancelled the plan and shouldn't be receiving any more bills. It took three phone calls until they acknowledged that the plan was already cancelled.

                2 months later and I get a bill in the mail chasing me for an overdue amount of $40 (half a month) when they actually owe me $40!

                After 3 phone calls to Telstra, they finally acknowledged they were in the wrong and they owed me $40. They said they'll fix it.

                2 months later and I get some overdue bill again saying I owe them $40. So I call them up trying to get this sorted and the person on the other end just says: we can see you don't owe us any money in the system but I can't stop the bill notices coming. He suggested I just ignore the emails and it will be too hard to get the refund.

                So I did just that and regularly got an overdue notice via email from Telstra every month — even as I had signed up to and paid for Telstra NBN and phone services in the coming years.
                The emails only stopped a few years ago.

          • RefusdClassification on 07/04/2023 - 03:26
            +5

            @Spic3y: Telstra are pure evil. I strongly advice everyone to eschew them. They are the main reason why internet access is, and has always been, so expensive is Australia.

        • alxr0101 on 06/04/2023 - 19:33
          +6

          Numerous inane phone conversations commencing with them asking "first can I have your DOB …." with the ready response of "No! You cannot have my DOB! You called me and I have no idea who you are. Bye.."

          Must be a tough gig for them.

        • nobro25 on 07/04/2023 - 07:50

          It's all fun and games until the the new debt collector is a bikie.

  • Drakesy on 05/04/2023 - 13:58
    +22

    Lol, and in things that never happen.

    The credit company simply sells the debt at a loss to a debt collector and moves on with their life.
    The debt collector then will hassle you until you pay up/make your life a living hell.
    I think they even have the power to repossess property/place liens on them.

    And declaration of bankruptcy will basically limit your earnings in the 5 years that follows and make it impossible to take out another loan so i guess as long as you don't want to buy a house go for it?

    • bargain huntress on 05/04/2023 - 14:37
      +3

      She claims it has been 7 years and she has a mortgage now?

      • brendanm on 05/04/2023 - 16:10
        +15

        At 13.2% interest

        • idonotknowwhy on 06/04/2023 - 10:28
          +5

          She also claimed to have a good credit score

          • brendanm on 06/04/2023 - 10:29
            +8

            @idonotknowwhy: Having a good credit score ,and having to tick "yes" when it asks if you've previously had a bankruptcy, are two different things.

            • alxr0101 on 06/04/2023 - 19:34
              +1

              @brendanm: Not bankrupt, just ignored them. Nothing to declare, move along.

        • kaleidoscope on 06/04/2023 - 11:02
          +1

          How you know this?

          • brendanm on 06/04/2023 - 16:22
            +2

            @kaleidoscope: Ever applied for a home loan? Ever applied for comprehensive car insurance?

            • kaleidoscope on 07/04/2023 - 01:31

              @brendanm:

              Ever applied for a home loan? Ever applied for comprehensive car insurance?

              Yes & Yes. Doesnt quite answer my question on how you came up with 13.2% to what the Lisa was getting on…

              • brendanm on 07/04/2023 - 07:51
                +4

                @kaleidoscope: Wow, really? It was a made up amount, meant to signify that it will be a much higher rate than for people who actually honour agreements that they enter into. If the risk is higher, the rate is higher. Someone proven to be a much higher risk gets a much higher rate.

                • kaleidoscope on 07/04/2023 - 08:03
                  +4

                  @brendanm:

                  It was a made up amount, meant to signify that it will be a much higher rate than for people who actually honour agreements that they enter into

                  lol okay. That number seemed much too specific for that 🤪

      • deme on 05/04/2023 - 18:59
        +5

        Sounds like she declared bankruptcy?

        • surg3on on 06/04/2023 - 10:30
          +3

          I doubt she got a mortgage with a bankruptcy on her record unless shes paying 10%

            • surg3on on 06/04/2023 - 16:55
              +4

              @deme: I guess if you want to put your life on hold for 3+ years for $50k then sure

              • deme on 06/04/2023 - 20:05
                +2

                @surg3on: Are you suggesting this person is smart?

                Yet I learnt that, as credit cards are unsecured loans, you don’t actually have to pay them back. So we sat and waited for seven years and, lo and behold, we are no longer in debt, and have excellent credit scores.

                I suspect Barefoot has been trolled because in 2014 the time bankruptcy could be on your credit report was reduced from 7 years.

  • KangaDrew on 05/04/2023 - 14:12
    +41

    BFI was far from upset and quite likely couldn't GAF. He simply called her bluff and put her in her place. It all boils down in the last two sentences: "You may think you’ve got away with this, but you really haven’t. You went bankrupt seven years ago."

    • bargain huntress on 05/04/2023 - 14:27

      I read it as like morally bankrupt.

      Is she financially bankrupt?

      She claims:

      Now my husband and I are debt free, our credit score is excellent, we have money in the bank, and we’re paying off a mortgage."

      That doesnt sound bankrupt?

      Also

      I say: (nothing, my mouth is open, but no words are coming out).

      Sounds upset?

      • KangaDrew on 05/04/2023 - 14:38
        +20

        Oh they're definitely bankrupt. That's the only way you can become debt free after owing 50K on a credit card (outside of paying it off). You are correct though - BFI is definitely calling out her moral judgements. But I don't think he's going to get upset over someone like her. He's probably a little dumbfounded at how she thinks paying that extra $1 got her out of debt, but whatever story she's selling, anyone with half a clue about how credit cards work knows she's not telling the full story.

        Some years ago

        We also don't know how many years ago this was. But in all likelihood, it was probably around 5 years or so, giving it time to be cleared from her file. If she's now got a mortgage, a financial provider has possibly looked past the 5 years bankruptcy, unless it was more than 7 years ago, after which, it wouldn't be on the credit file. But at the end of the day, I suspect there's much more to her "story" than what she wrote. She simply wants to show him she has the upper hand, otherwise, why bother writing at all? 🤷🏻‍♂️

        • djkelly69 on 05/04/2023 - 15:06
          +4

          We also don't know how many years ago this was.

          .

          So we sat and waited for seven years and, lo and behold

          • brendanm on 05/04/2023 - 16:13
            +10

            @djkelly69:

            So we sat and waited for seven years and, lo and behold

            How much did house prices increase in those 7 years? Far more than what the credit card debt was worth of say, plus the rent they had to pay for 7 years.

            • bargain huntress on 05/04/2023 - 18:54

              @brendanm: Thats a good point.

              They could have made more money if they had had no credit card debt and got a mortgage and no rent 7 years ago.

        • bargain huntress on 05/04/2023 - 19:53
          +1

          @KangaDrew That extra $1 thing is actually another separate crazy person on tiktok. Should i make another thread about it?

      • bargain huntress on 05/04/2023 - 14:39
        +5

        @FireRunner (dont know why you deleted your sensible comment)
        You are probably right: probably he is more astonished than upset
        That makes sense

        • FireRunner on 05/04/2023 - 15:09
          +2

          Yeah, I re-read the rest of the response and thought maybe he's upset? I'm not sure. Started second guessing myself, lol. Hard to say with just text.
          Initial reaction is astonishment though. I stick with that.

      • xsacha on 06/04/2023 - 19:21
        +2

        Financially bankrupt 7 years ago. That's the period for bankruptcy or the default and that's why BFI said that.
        She's basically saying she didn't work hard and make heaps of money for 7 years to pay her debt like he suggested and instead waited for it to go away because they had nothing to chase her for.

  • FireRunner on 05/04/2023 - 14:14
    +10

    "credit score is excellent", $50k credit card debt. Something doesn't add up

    • FireRunner on 05/04/2023 - 14:19
      +47

      I don't think you can ever morally justify borrowing someone's money with no intention of paying it back

        • Crow K on 05/04/2023 - 14:40
          +14

          In 1966 Australia transitioned from one currency to another. A lot of people had mortgages at the time. Nothing (untoward) happened.

          • EightImmortals on 05/04/2023 - 14:41

            @Crow K: Yes good point, imperial to decimal. :)
            I wasn't old enough to remember how that worked or how they calculated the comparison value.

            • DashCam AKA Rolts on 05/04/2023 - 15:42
              +3

              @EightImmortals: There was a conversion factor going from £ to $. £1 was $2.
              Easily applied by everyone. We learnt it at primary school, and there media ads everywhere - newspapers, radio and television.
              The smaller amounts were a bit more of a challenge, 12p = 10c, 6p = 5c, but 2p and 3p = 2c.

          • DashCam AKA Rolts on 05/04/2023 - 15:32
            +2

            @Crow K: You beat me to it. This is a perfect example to answer @Eightimmotals' query.

            • Crow K on 05/04/2023 - 15:41
              +3

              @DashCam AKA Rolts: For the record, if there was some sort of situation like that (agreement to pay a debt in NZD, New Zealand has a massive coup, the currency is destroyed and now it's impossible to make the payment) all that would happen is the matter would go to court and the judge would figure out the 'fair' way to resolve the situation and that would be the new answer that bound the parties.

              Something partially-related occurred with Bernice Wyszynski and a car sale in bananas in 1965 (wherein an offer was accepted to pay for a car in fruit due to slang being used in the wording of an advertisement).

              • DashCam AKA Rolts on 05/04/2023 - 15:44
                +2

                @Crow K: +1 as TIL Bernice Wyszynski and a car sale in bananas in 1965 (wherein an offer was accepted to pay for a car in fruit due to slang being used in the wording of an advertisement).

          • Seraphin7 on 05/04/2023 - 15:40
            +2

            @Crow K: One pound = two dollars was the fundamental premise and everything else flowed from that.

            The above change was effectively "necessary" as there were 20 shillings to the pound and therefore a shilling became 10 cents.

            It then got a little fiddly with 12 pence to the shilling and so there was no "easy" conversion.

            One penny became one cent and therefore lost a little bit of it's value. Threepence became two cents and therefore lost even a little bit more. Sixpence became five cents which was it's "correct" value.

      • thepigs on 05/04/2023 - 14:38
        +3

        I've never signed a contract that said I needed morals. In fact a few seemed to require I didn't.

      • afah0447 on 06/04/2023 - 09:24

        Plenty of people in this world without morals. The ex-most powerful person on the planet is on…ie Donald Trump. His unpaid debts are truly monumental.

        • croc330 on 07/04/2023 - 11:36

          Why did he pay the porn star then? Maybe she had some DNA evidence?

          <shudder at the thought>

    • thepigs on 05/04/2023 - 14:23
      +1

      In some religions its immoral to charge interest on money.

      • EightImmortals on 05/04/2023 - 14:35
        +7

        Not really, they simply charge 'fees' instead which coincidently enough comes out to about the same amount as charging interest. :)
        I looked into that a few years back.

        • shaybisc on 05/04/2023 - 17:27
          +4

          That's the Harvey Norman method I read somewhere. 36 months interest free with hefty account keeping fees.

    • Adredocto on 05/04/2023 - 14:25
      +2

      Uhhh… because it's your debt.
      Im going to take your house and car for myself. Why should i have to have a job to afford my lifestyle.

    • Crow K on 05/04/2023 - 14:31
      +21

      is it moral to repay your debt? What the real message I think is that people tend to go out of their way to repay debts even if it is to their detriment. Why should I take 2-3 jobs and become practically a slave to repay my debts?

      Nevermind 2-3 jobs, how would you feel if the next time your boss hands you a 'paycheck', the envelope contains one of the following

      • a slip of paper with the word "nah" on it and no payment whatsoever
      • half your usual pay and the comment "felt like you half-arsed it so here's half"

      If you'd be fine with him reneging on your deal without consequence ("oh well, better luck next time, i hope i get paid in full next month") then sure, 'why should i bother honouring debts' is a legit stance to have.

      • bargain huntress on 05/04/2023 - 14:44
        +6

        So are you saying like society has rules we agree to follow and that protects everyone. Makes sense.

        • Crow K on 05/04/2023 - 14:46
          +1

          I guess. The thought process is really just to derail "what would happen if i decided i didn't want to meet these sorts of obligations to others" with "what would happen if others decided they didn't want to meet these sorts of obligations to me".

          • Chandler on 06/04/2023 - 13:22
            +1

            @Crow K:

            The thought process is really just to derail "what would happen if i decided i didn't want to meet these sorts of obligations to others" with "what would happen if others decided they didn't want to meet these sorts of obligations to me".

            Case in point: COVID restrictions and those who do or do not follow them.

          • Shoocat on 15/04/2023 - 13:29
            +1

            @Crow K: The flaw with Libertarianism in a nut shell. They don't want to be subject to rules, obligations or laws they don't like, but fail to realise that if everyone did that we'd have no society and no workable infrastructure.

    • bargain huntress on 05/04/2023 - 14:43

      Interesting question

    • cheng2008 on 05/04/2023 - 15:30
      +3

      Why should I take 2-3 jobs and become practically a slave to repay my debts?

      Why spend that money in the first place then?

    • brendanm on 05/04/2023 - 16:15
      +4

      Because you spent the money.

    • aboogee on 06/04/2023 - 14:23
      +2

      Oh, Lisa's husband is here on OzB

  • thepigs on 05/04/2023 - 14:17
    +1

    what's the deal with the 7 years?

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