If you have gambling debts and are considering bankruptcy, contact The Law Offices Of R.J.Atkinson for a free bankruptcy evaluation. We can answer your questions about gambling debts & bankruptcy, and we may even be able to help you eliminate your gambling debts in bankruptcy. Contact us about your debt situation.
Can You File Bankruptcy and Get Rid of Your Gambling Debts?
Gamblers sometimes end up filing for bankruptcy. Incurring excessive gambling losses and gambling debts can often lead to filing for bankruptcy. In fact, in the official bankruptcy forms needed to file a bankruptcy, there is a question that specifically asks about gambling losses. Gambling debts for the most part, are dischargeable in bankruptcy. In other words, you can get rid of a gambling debt in bankruptcy since gambling debts are considered unsecured, they can be completely eliminated in a Chapter 7 Bankruptcy. There are some situations which make gambling debts a bit complicated in a bankruptcy, but if the means test determines you are eligible to file for Chapter 7 Bankruptcy, and there’s no fraud or misrepresentation involved, then in most cases, you can completely eliminate your gambling debts.
Texas and Gambling
Texas has a history of gambling, or at least a history of playing poker. “Texas hold ‘em” according to, the Texas State Legislature officially recognizes Robstown, Texas, as the birthplace place of Texas hold ‘em, dating the game to the "early 1900s". Before the exposure of Texas hold ‘em on television, the Internet, and in popular culture, famous Texas Gamblers such as Doyle Brunson, Amarillo Slim, Chill Wills, and Crandall Addington were making Texas known as a State of poker players in places like Las Vegas and Atlantic City.
At one time Las Vegas and Atlantic City were the primary places to gamble. That’s not the case anymore. Gambling is available almost everywhere these days, including on the internet, riverboats, lotteries, casinos, horse racing, offshore & off-track betting, and there are also illegal forms of gambling via bookmakers and in private clubs & casinos. Legal regulated gambling in Texas primarily consists of the lottery and horse racing. Although some situations may allow for poker to be played in private, for the most part, gambling is considered illegal in Texas, so sports betting, slot machines, roulette, black jack, promotion of gambling, and other unregulated gambling is not permitted. See Chapter 47 - § 47.01. to § 47.10. of the Texas Statutes.
As for bankruptcy and gambling, many Texans who file bankruptcy often eliminate gambling debts in their bankruptcies. These gambling debts most often arise from cash advances on credit cards, casino credit, and casino markers. Whether gambling debts are from credit card cash advances, casino markers, or casino credit lines, they can usually be eliminated in bankruptcy.
Credit Card Cash Advances
Oftentimes, gamblers will generate money to gamble with by taking cash advances from their credit cards at a casino. When the gambler looses, they are faced with carrying large amounts of credit card debt later on. This credit card debt usually comes at a high cost because cash advances tend to accrue at a much higher interest rate. Sometimes gamblers will borrow from one credit card to pay another, while taking additional cash advances from other credit cards in the hopes they will eventually win enough to pay their deepening debt. This credit card cash advance gambling cycle can go on for some time until the gambler’s financial world eventually collapses. When it comes to this point, the gambler can end up financially destroyed and very often facing a bankruptcy.
Casino credit is primarily a marketing tool of casinos that, is intended to generate revenues for the casino. Unlike governmentally regulated lending institutions that offer consumer credit, casinos don’t charge interest for the use of their funds; but, casino credit should not be considered interest free. Casino credit is granted to certain players and is usually a signature agreement to pay the casino whatever amount of credit is extended. The total amount the casino extends is called a gambler’s credit line. In a bankruptcy context, casino credit is treated like an unsecured signature loan, and is most always dischargeable.
A casino marker is an advance of credit to a gambler against funds on deposit or tied to a credit card. Sometimes, a casino marker is tied to a casino credit line or a post dated check. If for example a player's credit line is $10,000.00, then the casino will accept a check or checks totaling $10,000.00 from the gambler and agree to hold these checks until some date in the future. Check cashing privileges at a casino can permit a gambler to cash either personal or business checks at the casino cage. The casino will then deposit these checks into their bank account on the next business day or whenever the casino agrees to do so. Different casinos have different policies on checks. In some jurisdictions the post-dating of the check makes it a civil matter or criminal matter if the check is returned. In a bankruptcy case it can complicate matters if the casino has deposited the check, or is holding the post-dated check and presses criminal charges in their jurisdiction for writing a bad check or issuing a check that was never intended to be honored. Bankruptcy cannot stop criminal proceedings against you for bad checks.
Other Gambling Related Debts
Besides credit card cash advances, casino credit lines, & casino markers sometimes secured by postdated checks, there are other types of debts incurred for gambling purposes which are often seen in bankruptcy cases. Payday loans, pawn shop loans, car title loans, and signature loans. Depending on the facts of a particular case along with the time frames associated, and whether or not the debts are secured or unsecured, will determine their dischargability in bankruptcy.
Lucky Chapter 7
7 is considered to be a lucky number in the gambling world, and in the world of debt, 7 can also be considered a lucky number depending on your particular situation and perspective. If you have lost your employment, encountered a medical illness, failed in business, or are down on your luck because of any other financial setback, your luck could change if you can file for Chapter 7 Bankruptcy. If the means test provides that you are eligible to file for Chapter 7, you can get rid of your burdensome debt, which might include gambling debts, credit card debts, and other unsecured debts, while keeping your property as allowed by law. Texas has generous exemption laws, which for most Chapter 7 Bankruptcy fliers allows them to keep all of their assets, while eliminating their dischargeable debt.
13 is considered to be a lucky number in the gambling world depending on what game you play, and in the world of debt, the number 13 like 7 can also be considered a lucky number depending on your particular situation. Chapter 13 Bankruptcy is most often used to stop foreclosure, repossession, and repay debts like child support arrears or back taxes that can’t be eliminated in a Chapter 7. Chapter 13 can also significantly reduce unsecured debt such as credit cards, payday loans, and gambling debts. If you file a Chapter 13 Bankruptcy, unsecured debts aren’t entirely eliminated. Instead, they are paid back on terms based on your disposable income. If your disposable income dictates that they are to receive 10 cents on the dollar, that’s what they’ll have to accept. So it’s possible to owe $10,000.00 in credit card debt and repay only $1,000.00 over 3 to 5 years without interest. If you do the math, you can see the benefit a Chapter 13 Bankruptcy can have on reducing credit card debt. If you owe $50,000.00 or $60,000.00 in unsecured debt but only have to pay back $5,000.00 or $6,000.00, or even $8,000.00 or $10,000.00 over 3 to 5 years without interest, that’s a significant difference.
Gambling Debts that Bankruptcy Probably Won’t Get Rid Of…
Incurring gambling debts in casinos and potentially eliminating them in bankruptcy is one thing, but incurring illegal gambling debts and attempting to get rid of them in bankruptcy is another. You can’t discharge illegal gambling debts in a bankruptcy proceeding. The United States Bankruptcy Code cannot discharge debts incurred from illegal activities. So if you owe an illegal bookmaker, or an online casino tens of thousands of dollars and need debt relief, the Bankruptcy Court is not the forum to address those debts.
Even though legal gambling debts may be eliminated in bankruptcy, there are certain situations where such gambling debts might not be discharged in a bankruptcy. These are usually cases where fraud, deception, or criminal activity is involved. For example, if you go on a bad check writing spree at casinos days, weeks, or months, before filing bankruptcy, take huge credit card cash advances at a casino a few months before filing bankruptcy, or make material misrepresentations to obtain credit at a casino such as knowingly writing bad checks which induced the casino to extend you credit, you could have problems discharging the debt. Any debts incurred 90 to 180 days prior to your Bankruptcy filing will be scrutinized. You have the burden of proof to show the debts incurred were reasonable and necessary so they can be discharged. If they are gambling debts it may be difficult to get them discharged. Likewise, if you have post dated checks a casino is holding or have returned checks that were issued to a casino, you should contact an experienced bankruptcy attorney before filing bankruptcy. There could be potential objections to discharge and possible criminal charges depending on the amount of the checks, what state they were written in, and whether the casino claims you incurred the debt by fraud or deception, or has filed criminal charges for bad checks.
Do You Have Gambling Debts?
If you have gambling debts, or have questions about gambling debts and bankruptcy, contact us . We may be able to help. If you live in Austin, Houston, Dallas, San Antonio, or most anywhere else in Texas and are interested in filing for Bankruptcy to deal with your gambling debts, contact the Texas Bankruptcy Attorneys at The Law Offices Of R.J.Atkinson for a free bankruptcy evaluation and a free bankruptcy means test.
Every case is different, so every case should be evaluated on a case by case basis, but whatever the case is, and whatever chapter of bankruptcy you may be eligible to file, bankruptcy puts you back in control of your finances on your terms. Don’t waste your life drowning in debt, get a fresh start today…
Contact Texas Bankruptcy Attorney R.J.Atkinson: 800-436-9056