Finance guru Scott Pape, aka the barefoot investor, was bowled over by a reader’s suggestion on how to get out of debt simply by refusing to pay it off.
Pape published a letter in his sunday column from ‘Lisa’, who claimed that she and her husband had prospered by not following Pape’s advice to work more and instead employing a clandestine method of getting out of debt.
In her previous letter to Pape, Lisa had told him that she and her husband were heavily in debt and that they found it “overwhelming.”
“Now my husband and I are debt free, our credit score is great, we have money in the bank, and we are paying off a mortgage,” Lisa wrote.
‘How did we do it?

Barefoot investor Scott Pape was horrified by a reader’s advice that the way to get out of credit card debt is to simply not pay it off.
Not listening to your advice, which was to get two jobs each and pay thousands of dollars in interest and principal to the banks to pay off our huge credit card debt.
‘No, we just stopped paying the credit cards.’
Lisa said the couple owed $30,000, which with accrued interest increased to $50,000.
However, he said that because credit cards “are unsecured loans, you don’t really have to pay them back.”
“So we sit and wait for seven years and lo and behold, we’re out of debt and we have great credit scores,” he said.
‘I’d love for you to share this with your readers; unlikely, I know!’

A Barefoot Investor reader named Lisa claimed that she and her husband racked up $50,000 in credit card debt, but got out of it simply by not paying it off (file image)
Lisa ended her letter by wallowing in her alternative strategy.
“Probably better advice than working hard giving profitable multi-billion dollar companies money they don’t deserve,” he wrote.
In response, Pape expressed his disbelief at what Lisa claimed to have gotten away with, saying it was a first for him in all his years as a financial adviser.
“I’ve never seen a lender turn around and not try to recover a debt of $30,000 to $50,000 (which they have every right to do, because you are legally responsible for paying the debt),” he said.

Pape said in his experience that he had never met an institutional lender that did not take legal action to recover money owed to it.
As expected, he wasn’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 intentionally defrauded them,” he wrote.
He said Lisa’s parting shot about not “working your butt off giving profitable billion-dollar companies money they don’t deserve” left him speechless.
“I can’t help but wonder how having this mindset spills over into other areas of your life,” she wrote.
‘Like, how you fill out your time sheet at work, how you write financial questions in a newspaper, and what kind of example is this for your children.
‘You may think you’ve gotten away with it, but you really haven’t.
“You went bankrupt seven years ago.
The Australian Banking Association advises that if you don’t make credit card payments for a period of time, a bank may cancel the cards.
“In rare circumstances, your bank may sell your credit card debt to a debt collector,” the advice says.
‘Debt collectors also have a legal obligation to consider any hardship request you make in connection with the payment of this debt.
“If you don’t contact your bank during this period and agree to settle, the bank could take legal action to recover the unpaid balance.”
The Association also advises that not paying a debt affects a person’s credit rating.
“The longer your payment is late, the greater the negative impact it will have,” says the Association.
‘If your bank takes legal action against you, this can further affect your credit rating. A bad credit rating can affect your ability to receive financing in the future.’