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February 2006 - A Man Went Broke Because of Bad Advice

A Man Went Broke Because of Bad Advice

☳ by Adam Aspilla

When you are not sure of what you are doing you tend to seek for an advice. Getting an advice is not a problem for anyone you know could give you an advice on any subject if you ask. However, getting a good advice is not as easy for you have to look for a person who is expert on the subject and it could cost you money. An advice is either good or bad depending on its source.

 

Ordinary advice is a free commodity. A mechanic or a factory worker may give you an advice on legal, medical or financial matters if you ask for it.

 

A good example was a man we call him Gerry. He owned a house and had a good paying job. Gerry had a close friend, a mechanic, who suddenly lived a luxurious life. He was curious why his friend always took a vacation to gorgeous places when his friend’s income was just like his. Gerry was envious of his friend, so he asked him where the money came from to pay for his travel expenses. His friend told him that he used his credit cards and line of credits to pay for his vacations. When Gerry asked, “how do you pay them?” His friend responded, “I will simply file for bankruptcy and all my debts are gone.” Gerry asked, “Is it possible?” His friend said, “Many people are doing this why don’t you do it yourself also?”

 

Gerry followed the advice of his friend and he maximized his credit cards and line of credits. He purchased items that he did not need and went on vacations just like his friend until his credit limits ran out.

 

When his creditors demanded payment, Gerry knew what to do he just filed for bankruptcy per advised by his friend. As a result of his bankruptcy, the bankruptcy trustee sold Gerry’s house for it had substantial equity and used the proceeds to pay his creditors.

 

Gerry regretted in following the advice of his friend that led him to bankruptcy resulting to the lost of everything he had established not to mention the damage on his credit rating.

 

Advice is necessary as a guide in making a decision. However, not all advice is good it is either good or bad depending on its source. You can discern an advice if it is good or bad by following the dictate of your common sense. It your common sense says, it is unfair or unjust to either party involved do not do it, just like the advice of Gerry’s friend which was unfair to Gerry’s creditors had Gerry did not have a house with big equity.

 

If the issue is complicated you need go to an expert on the subject you are seeking for advice. However, do not just simply follow the advice of an expert, you have to also analyze and understand it yourself. If necessary ask for a second opinion from other expert before you act on it. 

 

Adam Aspilla is a Senior Financial Counselor of the Debt Clinic of Canada Inc. and the author of the book, You Can Negotiate All Your Debts. He also writes a biweekly column, “What Matters In Life” in “Taliba Newspaper. For free initial, professional and confidential consultation, please call 905-306-7572.