What Qualifies as Gambling Debt?
In this week of March Madness, we are addressing a common issue related to sports… gambling debt! Many of us travel to Las Vegas and bet on sports or play games in Native American casinos here in California. Here in the Inland Empire, places like San Manuel Indian Bingo and Casino, Pala Casino Resort and Spa, Morongo Casino, Resort and Spa, and Pechanga Resort and Casino are all very popular places to visit, relax, have fun, and, unfortunately, rack up gambling debt. Whether you lose money, owe money directly to the casinos from credit lines, or if you used credit to play in the casinos, you should be able to discharge the debt with a bankruptcy filing (keep reading if you want to know when the gambling debt is not able to be discharged). Gambling debt is considered one of the unsecured debts which can be discharged in a Chapter 7 bankruptcy filing. This means that if you qualify for Chapter 7 bankruptcy, you can have the gambling debt totally cleared. But this does not mean that you should go ahead and use all of your credit to gamble as much as you can and then just file for Chapter 7 bankruptcy after you’ve lost all your credit lines. The reason is explained below.
Don’t Plan Ahead To File Bankruptcy After Gambling!
It is not legal to pre-meditate a bankruptcy. You should not plan to file for bankruptcy as a strategy to get out of debt after gambling because this is not allowed. A bankruptcy court and bankruptcy trustee can deem your debt non-dischargeable or unable to be discharged if you have signs of pre-meditating a bankruptcy. You may think that this is difficult to prove, but, actually, all that the bankruptcy trustee needs to do is examine your most recent spending in the past 90 days to see if there was any spending that looks like it was planned spending with a bankruptcy filing planned ahead of time. For example, if you bought a new TV last month and also racked up a $10,000 gambling debt, and are hoping to file bankruptcy today, it would be fairly obvious to the bankruptcy court that you had a bankruptcy planned all along because the debt was incurred so close to when you filed. These recent debts may be deemed unable to be discharged.
Remember, bankruptcy trustees are just people like you. Your file will be examined by a normal person who can spot these types of spending patterns and will not let you get away with planned spending for a pre-meditated bankruptcy. Otherwise, if you have genuine gambling debt and you are unable to pay it in the time allotted for you to repay the debt, a bankruptcy should be able to discharge the debt.
What Happens If You Gamble Again After A Bankruptcy?
Someone out there is probably also thinking that once the bankruptcy is filed or discharged, you might want to go ahead and start gambling again immediately after the debt is discharged. You really shouldn’t put yourself in this difficult situation because you won’t be able to file a Chapter 7 bankruptcy again for 8 years. Now you are stuck with the debt until you can file again 8 years from now. After a bankruptcy, your main focus should be on building up your savings and improving your credit scores. Going right back to gambling after a bankruptcy can be even more risky because you don’t have the opportunity to file another bankruptcy to clear the debt. You will most likely face a lawsuit and collections activities.
If you are riddled with gambling debt or any other type of debt, contact Bankruptcy Law Professionals at 855 257-7671 to schedule a free consultation.