casino financial

Casinos, gambling, cash advances and bankruptcy

I generally avoid political discourse in this space. The casino game and the legalized game in general have been a hot topic in Massachusetts in recent years. Many sensible people have very different opinions about the short- and long-term economic impact of games in Massachusetts. On the positive side there will surely be at least some new jobs. In the negative column, as the Nobel Prize-winning economist Paul Samuelson put it: “[The game] simply involves sterile transfers of money or goods between individuals, without creating money or new goods. However, it absorbs time and resources.When it is pursued beyond the limits of recreation, where the main purpose is to kill time, the game subtracts money from national income. “Regardless of the general impact on the economy, on a personal level, the Gambling and gambling addiction can lead to insolvency. . Whether the debts incurred directly as a result of gambling losses, or because losses due to gambling have absorbed funds that would have been used to pay for other things, gambling can lead to financial disaster.

casino financial


Currently, Massachusetts does not have legal casinos. But as we all know, that is something that will change soon. Even without casinos here, I see some customers who can track their financial difficulties to gamble. After all, we are a relatively short distance from Foxwoods and Mohegan Sun, and the planes depart for Las Vegas from Boston every day. When the casinos are finally built in Massachusetts, I anticipate that I will see much more of this “type” of bankruptcy debtor.

Is it downloadable?

Gaming debts, like most other unsecured debts, can be withdrawn in bankruptcy and routinely written off. Of course, most casinos understand this and generally do not lend money directly to their customers. In general, the debtors seek to get rid of the debts contracted to feed their game (or perhaps their addiction to the game). Often, this is in the form of cash advances on credit cards, personal loans or other advances. These debts, like most other unsecured debts, are also typically downloadable in a personal bankruptcy.

Although the debt is, like other debts, usually downloadable in a personal bankruptcy, all creditors have the right to oppose the discharge of the debt owed to them based on a number of factors. There are some avenues that a creditor could follow to object to the payment of their debts. Among them is the fraud exception found in the Bankruptcy Code § 523 (a) (2) (A) that establishes an exception to dismissal for debts incurred as a result of “false pretenses, false representation or real fraud” . In summary the creditor has the burden of proving that the debtor borrowed the money without the real intention of paying the debt or knowing that he could not pay the debt. A few years ago there was a flurry of adverse proceedings [ie, claims within the general bankruptcy case] filed by creditors attempting to recover the money owed as a result of cash advances contracted at casinos or for gaming purposes. The crux of the arguments was, often, that the debtor knew he could not pay the debt. It is the responsibility of the creditor to prove that the debtor knew that he could not pay the debt, which is a difficult task. More importantly, the reality is whether it is a long-term gambling addiction or a short-term hurry at the casino, most people in the heat of the moment, while the game honestly believe they will be back at dark if they continue playing. Actually (although perhaps illogically) they believe that risk will pay off; That luck is about to turn in his favor. Many of the cases resulted in a dismissal for the debtor, and fewer challenges of this type are being carried out today. However, it is something that any debtor with debts per game must know.

Another way to exclude a debt from dismissal is found in Bankruptcy Code § 523 (a) (2) (C), which establishes an exception to the cancellation of debts incurred for certain luxury items or advances (both could be applicable) incurred within 60 days of the date of the bankruptcy petition. This could be an easier obstacle for the creditor to jump to avoid the discharge of the debt. However, it SHOULD also be an easier way for the debtor, simply waiting for the necessary time to approve before presenting the case. Out of the situation of gambling, I have seen cases, usually just after Christmas, when people have spent a little more than they should in the holidays, where we simply wait. In that case, it is usually quite easy because, in general, there is no real obligation to spend money. However, for the compulsive gambler, it could be a major challenge, and requires a close review of all credit card statements by the lawyer.

Disclosure requirements

Like many financial problems in bankruptcy, the Bankruptcy Code requires a debtor to disclose all losses incurred during the 12 months prior to the filing of the bankruptcy case. The objective is to allow the creditors, the bankruptcy trustee and the Court to determine if it is fraud in the presentation, if the assets are being protected or if there is a problem that could result in the impossibility of confirming a Chapter 13 plan. The Bankruptcy Trustees have broad powers to avoid transfers that may be fraudulent (when the debtor received a less than reasonably equivalent value) or of a preferential nature (when a creditor received more than it would have received in a settlement under Chapter 7.

In Chapter 13, the Chapter 13 plan of the compulsive gambler (or Chapter 11 or Chapter 12 for that matter) could be subject to an objection (or at least have a court, trustee, and certain key creditors who look very closely the proposed plan). the debtor’s income is expected to finance the plan. A fiduciary or a creditor may object to the viability of a plan where gambling losses are a regular part of the debtor’s month, as indicated in the disclosure described above. More importantly, where compulsive gambling has caused a debtor to fall behind on his mortgage, car loan or taxes, and therefore forced a debtor into Chapter 13, continued gambling can easily cause a confirmed plan to fail for no reason. meet plan obligations by making plan payments.

If you or someone you care about faces addiction to the game, contact anonymous players immediately. If you or someone you care about is struggling with debts resulting from gambling or other causes, schedule a free consultation with an experienced bankruptcy attorney – who cares about your clients today.