Barefoot investor Scott Pape stunned by reader’s credit card debt solution

• Reader Barefoot Investor uncovers debt strategies
• They just refuse to pay off their credit card
• Scott Pape was shocked and surprised that it worked

Financial guru Scott Pape, otherwise known as the Barefoot Investor, is smitten by readers’ advice on how to get out of debt simply by refusing to pay it back.

Pape published a letter in his Sunday column from ‘Lisa’ claiming she and her husband prospered by not following Pape’s advice to work more and instead used underhanded methods to get out of debt.

In her previous letter to Pape, Lisa told him that she and her husband were heavily in debt and considered it ‘overwhelming’.

“Now my husband and I are debt free, our credit score is excellent, we have money in the bank, and we are paying off the mortgage,” Lisa wrote.

‘How do we do it?

‘Not by listening to your advice, which is getting two jobs each and working hard paying the bank thousands in interest and principal to pay off our massive credit card debt.

‘No, instead we stopped paying the credit card back.’

Lisa said the couple owed $30,000, which with accrued interest grew to $50,000.

However, he said because 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 were out of debt, and had a very good credit score,” he said.

‘I want you to share this with your readers – no way, I know!’

Lisa ended her letter proudly about her alternative strategy.

“This might be a better tip than working hard to give billion dollar profitable companies money they don’t deserve,” he wrote.

In response, Pape expressed disbelief at what Lisa claimed to have gotten away with and said it was the first for her in years as a financial advisor.

“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’re legally responsible for paying off the debt),” he says.

It’s no surprise that he isn’t impressed with the morality of Lisa’s approach.

“Let’s be clear about what’s going on here: Someone lent you money in good faith… and you deliberately ripped it off,” he wrote.

He said Lisa’s farewell about not “working hard to give billion dollar profitable companies money they don’t deserve” left her speechless.

“I can’t help but wonder how this mindset spreads to other areas of your life,” she wrote.

‘Like, how do you fill out your time sheets at work, how do you write financial questions in the newspaper, and what kind of examples to set for your kids.

“You may think you’ve gotten away with this, but you really haven’t.”

“You broke seven years ago.”

The Australian Banking Association advises that if you fail to make a credit card payment for a certain period of time, the bank may cancel the card.

“In rare circumstances, your bank may sell your credit card debt to debt collectors,” says the advice.

‘Debt collectors also have a legal obligation to consider any distress requests you make in connection with the settlement of this debt.

‘If you do not contact your bank during this period and agree to make arrangements, the bank may initiate legal action to recover the unpaid balance.’

The association also suggests that not paying off debt affects a person’s credit rating.

“The longer your payment is past due, the greater the negative impact,” says the Association.

‘If your bank takes legal action against you, this could have a further impact on your credit rating. A bad credit rating can affect your ability to receive financing in the future.’