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

            • liongalahad on 16/04/2023 - 13:56

              @baldur: It's true though. I know of people who bought a car they couldn't afford, thanks to credit. Not talking about Ferrari or Porsche but definitely BMW's or Lexus.

  • shaybisc on 06/04/2023 - 11:34
    +2

    Won't your assets be seized? How can you have a good credit rating?

  • HangryCakeStore on 06/04/2023 - 11:54

    Quote: Is this a real situation?

    Is this forum or fake story set up more like an Ad?
    Also same people keep upvoting only this particular book like they trying to endorse it.. sad

    • HangryCakeStore on 06/04/2023 - 13:05
      -2

      I can see OP also upvotes deals related to this book

      So this forum is for advertising.

  • weee on 06/04/2023 - 11:57
    +1

    while everyone seems to be taking a piss at it and laughs it off, it is these single cell specimens who cause a real havoc down the road for all of us who's got a functional brain, judgement and ethics.

  • JuryWheel on 06/04/2023 - 12:21
    +2

    Wondering how credit card debt works with people "fleeing" overseas…..Say this lady spent the $30k, then moved to Portugal for 7 years, then came back…..wouldnt people do this all the time? I imagine chasing up debt when people live in others countries is tricky..

    • Crow K on 06/04/2023 - 12:33
      +1

      It depends how you do things. If you actually declare bankruptcy to have the slate wiped clean, no, you need permission to travel overseas (by the trustee).

      If you're loose with the details and just disappear and never declare anything then ???? Maybe you get caught, maybe you don't? (Is the person travelling with zero assets and trying to settle in Europe for 7 years? Visa issues? etc)

      The vague details of the OP letter and BFI response doesn't make it a good case study for what you can and can't do. View it as someone with no financial education saying "finance stuff is easy and there's no consequences and people who say they know how finance works are just having you on" being responded to by someone with financial education saying "you have no idea how anything works".

    • baldur on 06/04/2023 - 15:14
      +2

      So many people do it and get away with them.

    • markathome on 06/04/2023 - 20:20
      +1

      My understanding is it mostly just works. The problem is:

      1. A surprising number of times the person actually comes back to the country they moved away from.
      2. Companies do already factor this heightened risk when you apply (obviously you're not affected if you're applying in and then moving away from your birth country).

      Otherwise your only issue tends to be if you do something silly like take the funds from an American Express card only to apply for another American Express card in your new country.

    • zooter on 07/04/2023 - 11:54

      my thoughts exactly…maybe Asia is a better option where you can live cheaper using the 30K for 7 years teaching school kids how to get free money from credit card companies?

  • Hangryuman on 06/04/2023 - 12:49

    looks like the Donald Trump technique - first borrow a shipload of money, then fail to repay it, then first ignore the people who come after you, then threaten to sue them

    I liked a story for a childhood neighbour of DJT when they were both kids - this boy's ball accidentally went over the fence into the Trump property - and rather than simply tossing it back over, the maybe 8yo DJT was seen standing in the back yard holding the ball and red-faced yelling "I'll SUE YOU !!!'

    sweet as a dog's behind

    • dowhatuwant2 on 06/04/2023 - 13:51
      +3

      He's for sure good with money, case in point look how much he's saving on rent for headspace.

      • AN Other on 07/04/2023 - 09:27
        +1

        He's certainly not good with money. It takes a special type of incompetence to bankrupt three casinos.

        • bargain huntress on 07/04/2023 - 11:57

          I know right. Htf does a casino go bankrupt?!

    • greatlamp on 06/04/2023 - 13:51
      +1

      His parents shipping him off to military school should tell you everything you need to know. Wealthy people don't send their kids into the military unless there are big problems

  • netjock on 06/04/2023 - 14:15
    +2

    Pretty sure they chose this letter for entertainment value but also to highlight don't try this. Imagine if everyone goes around not paying back their debts. The economy just wouldn't work.

  • baldur on 06/04/2023 - 15:13
    +5

    50k is not worth the subsequent hassle. Add one more 0 and It will be worthy then.

  • MsJackie5 on 06/04/2023 - 16:02
    +1

    This is actually quite easy to do, because I know someone who did it personally. He took out well over $80k cash from a few credit card companies, absconded overseas and based himself in Asia, travelling and living life large, working 'cash in hand' to make it last for about 5 years before coming back to Australia. He was lucky that when he came back, he brought over a sugar mama (can you call them that if they are younger than the dater??), lived off her for another few years with everything like rent, utilities etc under her name, then dumped her when he knew he was in the clear. We all pay for this in society in some way or other, which is unfair but if I didn't have morals and responsibilities, then I would have loved to do something like this. Unfortunately / Luckily, some of us do have morals and/or family/friends that we don't want to put them through the harassment. There should be a law put in place that such things should STAY on their credit history for LIFE, and it's up to the lender to decide whether they want to take that risk or not because of your past behaviour.

    • Crow K on 06/04/2023 - 16:21
      +1

      There should be a law put in place that such things should STAY on their credit history for LIFE, and it's up to the lender to decide whether they want to take that risk or not because of your past behaviour.

      It sounds like you're describing this: https://www.afsa.gov.au/i-cant-pay-my-debts/bankruptcy/conse…

  • 2esc on 06/04/2023 - 17:30
    +2

    Sister in law just before declaring bankruptcy due to her husband was professionally advised to go and rack up as much debt as possible before the declaration.

    She didn't on moral grounds.

    Only a scumbag would behave like that.

    • bargain huntress on 07/04/2023 - 00:03

      Professionally advised by who a financial advisor?

      • AN Other on 07/04/2023 - 09:25
        +1

        By someone from Housos.

  • dazersbev on 06/04/2023 - 20:07
    +3

    Yes this is a real situation and would actually work. The lender has taken a risk lending money unsecured against any property. This is reflected in a higher interest rate. They make millions off of these products. The minority that arent paid back are sold to a debt collecting company. The price the person pays is having an unpaid default on their credit file for a number of years which will prevent them from obtaining credit. Once the default clears they can obtain credit again, they have effectively gotten free money. There is an unrealised loss though of what they may have made in the period of not having credit eg buying a house which may have gone up in value.
    The debt collector will only pursue via repeated contact of the the person, possibly the persons employer and family friends if they are ignored. It is HIGHLY unlikely that either the debt collector or lender will pursue enorceable orders through a court and its associated high costs to garnish wages or go after any property for a relatively small amount of unsecured unpaid credit.

    • AN Other on 07/04/2023 - 09:24
      +4

      They haven't got free money. They have "paid" for their little scam by suffering years of threatening letters, phonecalls, pressure from debt collectors, as well as being effectively blacklisted from taking anything that required a credit check for years. So stuck renting and unable to move, can't change electricity supplier, can't get a mobile phone contract, can't get a car loan, can't get a any form of credit at all in fact.

      And for what? Do sensible people who know how to manage money behave like this? Or do you reckon that $50K was blown on useless bogan trinkets like a TV the size of a Hoyts Cinema screen, a load of Ed Hardy tshirts (or whatever the bogan uniform of the day was) and 1000 cans of premixed bourbon and cola?

      Basically, it's a ridiculous thing to do, and the only person who'd claim they "got away with $50K" is going to be a loser of epic proportions.

  • payless69 on 07/04/2023 - 01:25
    +2

    She changed her name. Simple. I know many women who changed their name after skipping 30 grands and ALL got away with it.
    Keep ALL paperwork and when the summons comes in write a min 10 page defense. Send 4 copies to court and ask them to stamp it.
    Courts are intricately stupid. Never put 2 items on a single page, make 4 pages and write like a politician about every single issue. You need written proof, such as asic extracts so if debt collector claims to live in one state but tells asic that hi lives in another you have a case.

  • RefusdClassification on 07/04/2023 - 03:18
    +2

    I love this woman. Nothing makes me happier when people f*#k over the capitalist system. "But it’s probably a better tip than working your bum off giving billion-dollar profitable companies money they don’t deserve."

    The "Barefoot Investor" is just a shill for the bourgeoisie. Spend you life in slavery for the benefit of people who own 100 million dollar yachts.

    • AN Other on 07/04/2023 - 09:10
      +2

      The only person who suffered here was her. Have you ever been in debt?

      • 2025 on 07/04/2023 - 09:39
        +2

        I’d be willing to put up with a few phone calls and no access to credit for 7 years if someone gave me $50,000 up front that I didn’t have to pay back….

        • Cluster on 07/04/2023 - 10:14
          +5

          $50k over seven years is $7142 per year. $595 per month. It's not that much money really.

          They couldn't get a mobile phone plan, had to prepay utility bills, couldn't get any loans of any kind, couldn't apply for a variety of jobs, had greatly limited housing opportunities, the list goes on.

          The selfish defaulters' actions increase borrowing costs for everyone else, because we now have to pay that $50k.

  • hawkshead on 07/04/2023 - 08:35
    +1

    I don't understand money very well. I don't really care that much about lending companies, they don't make anything? they don't help people? they just prey on people.

    • Ughhh on 07/04/2023 - 13:13
      +1

      If you needed to buy a new car, house or something big and essential, but you don't have the money, what or who do you turn to?

      • bargain huntress on 08/04/2023 - 11:10
        +1

        I need to buy those things, but lenders wont lend to me, so i go without. I survive.

        • Ughhh on 08/04/2023 - 11:34
          +1

          I'm curious who hawkshead would turn to if heshe needed to buy a car to get to work, but don't have a few K (and neither do bank or mum and dad)?

          • bargain huntress on 08/04/2023 - 13:50

            @Ughhh: Save up? Walk? Catch the bus? All the things i have to do

            • Ughhh on 09/04/2023 - 13:45

              @bargain huntress: Cool. Let's hope he doesn't live in the middle of no where. But I guess you would just walk 5hrs.

              I'm sure his work and income can take a break while he saves up.

          • hawkshead on 09/04/2023 - 14:03

            @Ughhh: So your response is its ok to be a predatory loan company as long as your prey on people who desperately need help?

            • Ughhh on 09/04/2023 - 14:05
              +2

              @hawkshead: You need to work on your comprehension skills dude.

      • hawkshead on 09/04/2023 - 14:00

        There's a bus service and train service in my town.

      • hawkshead on 09/04/2023 - 14:01

        Is Ughhh disclosing they are the goodest boy of the predatory finance industry?

        • Ughhh on 09/04/2023 - 14:10

          Without the bank, I would probably be paying for someone else's mortgage instead of my own, im guessing that's what you're currently doing.
          Without the bank, it'd still have a mortgage now if I bought now instead of precovid.

  • shaybisc on 07/04/2023 - 08:46
    +1

    Looks like you could get away with a NSW credit card debt if you are prepared to leave the country for 6 years.

    https://financialrights.org.au/factsheet/recovery-of-old-deb…

    But that wasn't what these people did so I don't see how it worked. They sat back and waited for 7 years and now have excellent credit scores - nah, don't believe it. Where did they live for 7 years? What did they live on? How did they avoid garnishee orders?

  • AN Other on 07/04/2023 - 09:06
    +3

    This is such nonsense. So she refused to pay off her debts and supposedly "made" $50K? But what she's not telling you is she had:

    • Years of stress and sleepless nights
    • Couldn't get a mortgage for years
    • No bank or other financial institution would touch her with a barge pole

    Debt is horrible. Anyone who thinks they can game the system like this is basically fooling themselves.

    Oh and also, $50K works out as what? About $8-10K a year to have your life ruined? Is that really worth the mental anxiety?!?

  • AN Other on 07/04/2023 - 09:09
    +2

    This is such nonsense. So she refused to pay off her debts and supposedly "made" $50K? But what she's not telling you is she had:

    • Years of stress and sleepless nights
    • Couldn't get a mortgage for years
    • No bank or other financial institution would touch her with a barge pole

    Debt is horrible. Anyone who thinks they can game the system like this is basically fooling themselves.

    Oh and also, $50K works out as what? About $8-10K a year to have your life ruined? Is that really worth the mental anxiety?!?

    • Mrgreenz on 07/04/2023 - 10:38
      +2

      This

      Not only that the 50K windfall she's touting is well exagerated seen as near 40% of that is intrest/fees accrued

    • dazersbev on 07/04/2023 - 14:06
      +2

      The article illustrates her choice of not repaying the unsecured debt as a legitimate option. You don't know her circumstances. People have offed themselves for the stress of less than $50k debt.

      Her choice may have led to being able to sleep at night.
      She may not have wanted or needed credit for 7 years.

      For all you know she may have been having to choose feeding her kids or make repayments. Had she chosen to try and pay it back she would have ended up paying thousands and thousands more and gone through potentially years of suffering and going without. Her choice may have actually saved her life and her relationships. Although granted, she does sound smug in the article as if to 'game the system'.

      • AN Other on 07/04/2023 - 23:59
        +3

        If any of what you claim were true, why the need to write a silly letter to Scott Pape about it? She's obviously just some low life who managed to dodge paying off her Harvey Norman "buy now pay later" loans.

  • Cluster on 07/04/2023 - 10:09
    +1

    I must be really old fashioned to believe that you should pay all your debts and bills on time and in full.

    How would the selfish $50k credit defaulter feel if they lent money to someone who then turned around and said 'What!? You actually want me to pay you back? Go @%@!# yourself!' I bet they wouldn't find it so funny. But apparently it's all okay if you steal from a big business.

  • alxr0101 on 07/04/2023 - 19:23
    +5

    So when a business borrows heavily, the principals and execs pay themselves well, the workforce are denied more than cpi increases, the business gets bailed out by government..and then goes bust, leaving contractors and other vulnerable creditors out of pocket (except the ATO that is first in line for anything left over).

    And that's just "oh well too bad, signs of the times…".

    But for an individual it's "pay your debts or it's a moral outrage on society…".

    Banks already factor in bad loans and flog it off to debt collectors to harass.

    • baldur on 08/04/2023 - 08:09

      Well said.

    • bargain huntress on 08/04/2023 - 11:07

      It's true.

      I just love it when politicians give businesses huge amounts of taxpayer's money, but the taxpayers dont get any of the business.

  • ChatCPT on 07/04/2023 - 20:57
    -3

    'woman' …that explains everything

  • AlanHB on 08/04/2023 - 09:13
    +1

    I might be missing something here, but couldn't the collections company simply seek a judgement against you within the 6/7 years, increasing the amount of time to collect on the debt and also gain the legal right to put a lien against anything you own?

    • shaybisc on 09/04/2023 - 17:50

      Yes. Barefoot did a follow up. Says it can extend up to 15 years.

  • Stoozer on 09/04/2023 - 10:12

    If you default on unsecured credit card debt does this put your family home at risk?

    • MrMarket on 11/04/2023 - 16:09

      if you don't pay the debt and this debt is sell to debt collector, debt collector will get in touch with you real quick, if you don't pay debt collector, they can initiates court action to bankrupt you and trustee start taking control of your asset so yes everything you owned with your name on it will be at risk.

      • baldur on 16/04/2023 - 07:10

        what are they going to do? seize your house that you live in?

  • mavis30551 on 11/04/2023 - 12:31

    lol at all the coorporation bootlickers here.

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