I just returned from a 341 meeting today and thought I would remind you all that it is important to correctly list gambling winnings (income) in your income schedules, and your bankruptcy gambling losses in the Statement of Financial Affairs. Depending on your situation, they may need to be listed elsewhere. They especially need to be reported in the petition, schedules, and SOFA if they occurred in the past year.
While gambling debt is technically dischargeable in bankruptcy, it's a slightly more complicated proposition in the bankruptcy court than other types of debt. No law specifically prohibits the discharge of gambling-related debt, but the court looks at it differently than other types of debt. Thus, gambling losses are a common cause of bankruptcy.Again, it's important to understand that like the eligibility for discharge of other kinds of debt, a bankruptcy judge is going to weigh a number of factors in your financial history. Regardless of whether a debtor has generated a significant portion of their income from gambling activity, or their losses in many cases due to serious addictions can result in a line of questioning during a debtor's Section 341, Meeting of Creditors by the Bankruptcy Trustee. That means that anything that works against other contractual debts would work against gambling debts, and one such thing is Chapter 7 bankruptcy: contract-based debts, including gambling debts, can be discharged in Chapter 7. So broadly speaking, the answer is 'Yes–gambling debts are dischargeable in Chapter 7.'. Have some big losses at an Atlantic City casino contributed to the financial situation you find yourself in that has you considering bankruptcy? You may wonder if gambling debts can be discharged in Chapter 7 bankruptcy. The good news is that they likely can be. However, you might get some pushback from the bankruptcy trustee assigned to your case.
US Trustees has been concerned about this, so the do watch for excessive amounts of gambling losses. A US Trustee could object to the entire Chapter 7 bankruptcy and you may end up without your discharge.
The Ch. 7 trustee might ask about it in the 341 meeting and you'll need to be ready to truthfully respond.
Individual creditors might object to discharge of an the debt specifically attributed to gambling (excessive withdrawals at the casino with their credit card).
Bankruptcy Gambling Losses Offset
With the proliferation of casinos around the country, this is becoming more of a problem. Here in Western Washington, they are scattered all over the place. They seem to be doing well; many of these casinos are expanding and advertising to attract additional clientele. More people are finding themselves in situations where they might have to report these sources of income or the gambling losses that usually come along with visiting casinos, and they fail to report them. Remember, the petition is signed under penalty of perjury so you'd better get your hands on the numbers and report them.
If these are your issues, see a bankruptcy attorney (a local one in either Everett or Mount Vernon Washington.) We'll help you get it right. This is not something you want to be going it alone on.
Bankruptcy Gambling Losses Winnings
Visit our bankruptcy website at http://www.snohomishcountybankruptcy.com
US Trustees has been concerned about this, so the do watch for excessive amounts of gambling losses. A US Trustee could object to the entire Chapter 7 bankruptcy and you may end up without your discharge.
The Ch. 7 trustee might ask about it in the 341 meeting and you'll need to be ready to truthfully respond.
Individual creditors might object to discharge of an the debt specifically attributed to gambling (excessive withdrawals at the casino with their credit card).
Bankruptcy Gambling Losses Offset
With the proliferation of casinos around the country, this is becoming more of a problem. Here in Western Washington, they are scattered all over the place. They seem to be doing well; many of these casinos are expanding and advertising to attract additional clientele. More people are finding themselves in situations where they might have to report these sources of income or the gambling losses that usually come along with visiting casinos, and they fail to report them. Remember, the petition is signed under penalty of perjury so you'd better get your hands on the numbers and report them.
If these are your issues, see a bankruptcy attorney (a local one in either Everett or Mount Vernon Washington.) We'll help you get it right. This is not something you want to be going it alone on.
Bankruptcy Gambling Losses Winnings
Visit our bankruptcy website at http://www.snohomishcountybankruptcy.com
Bankruptcy And Gambling Losses
Cheers!
Mark D. Nusz
Bankruptcy Attorney
