Will gambling debt stop me from going Bankrupt

James Falla

• 20 Jul 2022

If you are struggling with debt you might have considered gambling to try and win money to repay what you owe. The problem with this is that you normally lose more than you win. The end result is that you simply generate more debt.

One of the options you should consider if you cannot pay your debts is bankruptcy. However you may be worried that you could you be prevented from using this solution or that the procedure will last longer because of your gambling debt.

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Can you go Bankrupt if you have Gambling Debt?

The fact that some or even all of your unsecured debt is due to gambling will not stop you from going bankrupt. As long your debt is unsecured it can be included in bankruptcy. It is likely that this will be the case if you have gambled on line funded by your credit cards and possibly your overdraft.

A common fear regarding gambling debt is that you will not be allowed to go bankrupt because it seems you willingly increased your debt through your activities. This in turn might be seen as fraudulent.

This worry is unfounded. The courts do not discriminate against people with gambling debts. Your bankruptcy application will not be rejected because you have this type of debt.

Does Bankruptcy last longer if you have Gambling Debt?

Bankruptcy usually lasts for just 12 months. It is very rarely that this period will be extended. The Official Receiver (OR) will normally only consider extending the time you are bankrupt if they feel you are being uncooperative.

Examples of non-cooperation are where you refuse to give them information they ask for about your financial circumstances or try to hide your assets.

If you have gambling debt this in itself is not a reason for the OR to extend the length of your Bankruptcy. The fact that you have gambled in the past is not a crime and it should have no affect on whether you co-operate now. If you cooperate there should be no reason for the OR to extend your Bankruptcy.

Where the amount of gambling debt you owe is large, there is a possibility you may have to accept a Bankruptcy Restrictions Undertaking (BRU). However if this happens it is likely the affects will be minimal.

Other help available if you have Gambling Debt

Of key importance if you have this type of debt is that you show the Court and Official Receiver that you are no longer gambling. Ideally you need to be able to say you are receiving help particularly if you feel you have an addiction. If you are still gambling getting help from your doctor is an option. You should also get support from a specialist organisation such as Gamblers Anonymous or GamCare.

Contacting Gamblers Anonymous or GamCare would be a benefit not only to you to stop your addiction but also will help with your bankruptcy in the future. It allows the OR to see that you are getting your addiction under control and reducing the risk of getting into debt again.

If you have an addiction you may need to delay your bankruptcy until you have taken these steps. It is possible that the Court could prevent you from going bankrupt if they believe you still have a gambling problem.

How to deal with your debts while you get help for a Gambling Addiction

If you have only just started getting help for a gambling addiction you may not want to attempt bankruptcy straight away. However you may still be struggling to pay your debts. Given this you could use a Debt Management Plan (DMP) in the short term.

This type of Plan will allow you to reduce your debt payments down to an affordable amount while you get your gambling addiction under control.

Using a DMP should normally only be seen as a temporary solution to your debt problem. It does not give you any legal protection from your creditors. In addition if they continue to add interest charges it can last for years. However once you have stopped gambling you can stop your DMP and declaring bankruptcy straight away.