Helpful Guide to Gambling Debts and Bankruptcy

It is well said crippling debt is the outcome of a gambling problem. Many people with gambling problems are left with very serious debt problems. Sadly, it is only possible to deal with gambling debts once gambling addiction has been overcome. In this article, we will try to elaborate in detail on the topic of Gambling Debts and Bankruptcy.

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Identifying that a Gambling Problem Exists

A gambling guide website writes that such addictions which are related to unique casino and gambling are often referred to as hidden illness as there are no obvious physical symptoms or symptoms with it like there are in alcohol or drug addiction.

Signs that gambling addiction may be an issue to the immediate family include overdue or unpaid bills, dwindling savings, the sale of household items, changes in temperament, missing bank and credit card statements, and unexplained loans and cash advances.

The only way to overcome a gambling problem is to admit that problem gambling is a serious issue and needs to be tackled. It is imperative that any individuals that are afflicted with this illness stop gambling and get professional gambling help and support. Again to repeat, this is the only way.

Write to the Gaming Companies about Gambling Debts

Although many gaming companies are not sympathetic to the plight of their customers, there are a few that will be willing to refund some of the losses incurred as a gesture of goodwill. Sadly, a number of companies justify not doing so on the basis that it only serves to encourage further gambling.

Further Losses at the Same Company after the Admission of a Gambling Problem

The company is obligated to shut down any existing online accounts immediately when a gambling problem is admitted to. Should they fail to do this and further money is lost in the same account, complaining to the company should result in this being refunded.

If no refund is tendered by the company, respond by telling them that a complaint will be made to the regulator. Please remember that this only applies to existing accounts and not to new accounts opened at the same company.

Personal Bankruptcy is Not a Good Solution for Dealing with Gambling Debt

Writing off gambling debt through personal bankruptcy sounds like a good idea, but it isn’t. The only time it should ever be considered is if there is absolutely no way of being able to contribute towards an alternative debt solution.

The Enterprise Act 2002 considers any form of gambling debt to be a bankruptcy offense. This is almost certain to result in a Bankruptcy Restriction Order (BRO) meaning that the debtor is not discharged from bankruptcy for up to 15 years. It is generally only 1 year before a regular bankrupt is discharged which provides a good insight into how gambling debt is regarded.

Please see debt solutions to gambling problems to identify the right approach to deal with gambling debt. Talk to experts as support and encouragement will be an important part of the recovery process. There are literally millions in the same boat so nobody is ever completely alone.

Personal Bankruptcy – Pros and Cons

Personal bankruptcy is the best debt solution for dealing with serious financial problems. It allows someone to write off debt, but at a cost to personal freedom. Government figures show that a record 107,288 people declared personal bankruptcy in 2007 and this figure is set to worsen as people struggle to pay off 1.2 trillion of personal debts, of which 0.2 trillion is unsecured.

Advantages of Personal Bankruptcy

  • Debt write-off. It allows someone with serious debts to write off almost all personal debt, including credit card debt and unsecured loans.
  • Discharged from bankruptcy after 12 months. Most people are discharged after a period of 12 months. This is considerably shorter than other debt solutions, such as a debt management plan or Individual Voluntary Arrangement (IVA). For instance, an IVA lasts for a minimum of 5 years before an insolvent is discharged.
  • Stops creditor harassment. Once declared, creditor harassment becomes illegal.
  • Cheap debt solution for insolvents. Whilst declaring bankruptcy is cheap for debtors, it is an expensive exercise for creditors. It can be done for just £495. Compare this to an Individual Voluntary Arrangement where it is necessary to pay up to £6,000 for the services of an Insolvency Practitioner before even considering a repayment plan for creditors.

Disadvantages of Personal Bankruptcy

  • Financial scrutiny. Personal finances will be heavily scrutinized by the Official Receiver.
  • Bankruptcy Restriction Order. Those that are deemed to have acted recklessly could be subject to a Bankruptcy Restriction Order (BRO) like losing money through gambling, speculation or spending money that a debtor was never in a condition to pay the money back. A person guilty of any of these bankruptcy offenses can be held accountable for certain years and it can be up to fifteen years.
  • Loss of the family home. The Official Receiver will expect a property to be sold for the best available price so that the money received can be distributed to creditors.
  • Not all debts can be written off. Taxes owed to the Inland Revenue, the money gained through fraud, child support, and student loans cannot be eliminated through personal bankruptcy.
  • Credit report. Bankruptcy has grave ramifications for a credit report and will show for 6 years (UK) and 10 years (America.).
  • Future credit applications. When applying for more than £500 of credit, it is necessary to inform the lender about being declared bankrupt in the past.
  • Professional exclusion. Professional people, such as accountants, lawyers, police, and local government officials will lose their job. This can make financial survival difficult.
  • Negative publicity. All insolvencies are advertised in a local newspaper and the London Gazette. It also appears on the government’s insolvency register.
  • Personal bankruptcy may seem like a utopian debt solution, but there are a number of reasons why it should be avoided. Those that have a family home or have been involved in speculation may wish to consider an Individual Voluntary Arrangement or a debt management plan.