Wednesday, June 14, 2017

Discharging Your Gambling Debts in Bankruptcy

Can I eliminate my debts in a Chapter 7 bankruptcy?

Gambling debts are easy to accrue.  Perhaps you like to play poker or craps, or you may enjoy betting on horses.  No matter your gambling preference, you likely understand that sometimes you win, and sometimes you lose.  Often, in an attempt to get back on top, you will end up borrowing significant sums to keep on gambling.  When you cannot repay these debts, you may find yourself facing collection calls, repossession of your car, or even foreclosure of your home.  Chapter 7 bankruptcy may be the financial tool you need to escape from your debts, but how does a bankruptcy court view gambling related debts?

Gambling Debts in a Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a powerful tool that can provide you with a fresh financial start.  In a Chapter 7 bankruptcy, you can generally discharge unsecured debts, like credit card debt, medical debt, and more.  When it comes to gambling debt, it can be complicated to determine whether the debt can be discharged.  Debts incurred due to gambling are technically dischargeable in bankruptcy, but discharge comes with some complications.  Courts will closely review your gambling debts and the bankruptcy trustee or creditor may object to discharge of these debts if they believe you never had the intention of repaying these debts.  

Debts incurred under false pretenses or due to fraud are not dischargeable in bankruptcy.  It can be difficult to determine whether a debt is fraudulent, especially when it comes to gambling.  Evidence that may indicate fraud could include signing a marker in exchange for chips claiming you have sufficient funds, but do not in fact have these funds.  In such a scenario, you will need to prove you did indeed intend to repay your debts if you still wish to obtain a discharge.  Evidence that you recognized you had a gambling problem and sought help, while making some payments to reduce the debt, could be sufficient to obtain a discharge.  

Your bankruptcy attorney will carefully assist you in seeking the discharge of your gambling-related debts.  Your attorney can help evaluate the debts and guide you through gathering evidence to support your intent to repay the debts.  With your attorney’s help, you can start on the path towards financial freedom.

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