Gambling Debt & Bankruptcy

You can discharge your legal gambling debts in bankruptcy.

Both forms of personal bankruptcy, Chapter 7 and Chapter 13, help debtors with the aid of the courts. You may include your gambling debt in either type of bankruptcy, but the court will handle your debt differently depending on the type of bankruptcy you file.

Facts

Chapter 7 bankruptcy allows you to discharge your gambling debt in its entirety. In Chapter 13 bankruptcy, however, the court will require that you repay all of your gambling debts over a three- to five-year period.

Significance

Only legal gambling debt qualifies for inclusion in bankruptcy. Gambling debts you incurred at casinos, riverboats and other gambling institutions are legal debts, while gambling debts you incurred privately, such as through a poker game or betting on sports, do not qualify for a bankruptcy discharge.

Considerations

Your creditors have the right to contest your ability to include your gambling debts in your bankruptcy case. If the creditor can prove that you did not have the means to repay the debt at the time it was incurred, the bankruptcy judge may determine that the debt was incurred by fraud and thus not dischargeable.

References

• U.S. Courts: Chapter 7
• U.S. Courts: Chapter 13
• Justice.gov: Gambling on Dischargability

Resources

• The Survivors Club: The Bankruptcy Support Center
• Bankrate.com: Life After Bankruptcy