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Gambling Debts – Dischargeability Through Bankruptcy

Earlier, bankruptcy courts often found gambling debts to be nondischargeable. However, nowadays possibly as a consequence of the rise in legalized gambling in many states, the courts are allowing discharge of gambling debts through bankruptcy.  Various researches have been conducted and suggested that a considerable number of consumer bankruptcy filings are related to gambling losses as most of the gamblers use their credit cards to gamble and raise their debts.

A debtor should be aware that some gambling debts could have serious consequences if not paid on time even though gambling debts can be discharged through bankruptcy. For e.g.; In Nevada, legal action could be taken against a debtor for not satisfying gambling marker within the given time period of 30 days.  A debtor may have a criminal record in his/her name even though it is possible to get his/her debt discharged. The problem would be that if the debtor has not paid the marker within the thirty days, s/he may find that criminal prosecution is ahead of him/her as well as If they file for bankruptcy before the time period has expired, the bankruptcy court may question the recent debts incurred.

A bankruptcy court will scrutinize any debts that have been incurred recent to the filing of a petition. If a debtor has been in financial problems and create new debts from gambling immediately before filing bankruptcy, a court may hold him/her liable for them. If a major portion of debts are comprised of gambling debt, a debtor will not be eligible for an automatic discharge. A debtor may also be required to take steps to avoid his/her gambling addiction.

If a debtor elects a Chapter 13 bankruptcy, some or all of the gambling debts could be paid off over a time period on the basis of a repayment plan. It might help to avoid criminal prosecution for gambling debts.

Inside Gambling Debts – Dischargeability Through Bankruptcy