Case study: Manpreet

Beware of dodgy advice

Remember Manpreet?

Manpreet owns and operates a coffee bean supply company, roasting his own beans and selling them to local cafés.

Despite an increase in trade, most of his customers continue to be impacted financially. This is taking its toll on Manpreet’s cash flow and his ability to pay his own debts on time.

Manpreet’s business and personal debts are now over $700,000, so he decided to research what he could do to get out of debt quickly. While searching, Manpreet stumbled across an ad that read:

“Get out of debt in 10 minutes. Start again with a clean slate.”

Despite thinking this was too good to be true, Manpreet was under a lot of stress and decided to click on the link anyway. Before he knew it, he was talking with Dodgy Dave, a representative from the company that placed the ad.

Dodgy Dave advised Manpreet to transfer his coffee bean business and his house, which he owns outright and is valued at $1 million, into his wife’s name, and then declare bankruptcy. He said that would allow Manpreet to wipe the slate clean, be debt free, keep his house and continue running his business. The only catch would be that Manpreet would need to pretend that his wife was now running the business.

Dodgy Dave wanted $20,000 in cash for the advice and to fill in some paperwork. Manpreet went home after work that night and discussed the advice with his wife. Manpreet’s wife didn’t like the sound of Dodgy Dave’s advice and told Manpreet to contact the National Debt Helpline for free financial counselling.

The National Debt Helpline’s financial counsellor explained to Manpreet that taking Dodgy Dave’s advice could result in a criminal conviction. Instead, the financial counsellor explained the legal options available to Manpreet, provided advice on how to negotiate with his creditors and recommended that he contact AFSA about the advice he received from Dodgy Dave.

*These case studies do not constitute legal or financial advice. You should consider whether the options referred to in the case studies are appropriate for you, and seek advice if necessary, before taking any action.