Fraud? Help.

[beyondtherapy]

I have about 70K worth of unsecured CC debt spread out amongst 6 cards, all now closed.

There are 2 Amexs, which are the cards I incurred the debt from.

The others are:

Advanta Mastercard
WaMu Mastercard
Discover card
Bank of A Visa

All of the above are balance transfers from the amex.

here is the question:

I have a gambling problem. Addiction. Compulsion. Sickness. Whatever you want to call it, I've got it. Yes, I am in therapy. Yes, I have a lawyer. Yes, I've given full disclosure. Yes, I am a work in progress. No, I blame no one but myself. No, I don't let the blame for myself stop me from taking steps forward. No, don't have pity parties without remembering all that's good about me as well.

I'm getting off point.

The way I got money to gamble, online, was buy making purchases using my American Express card and then reselling what I purchased for cash, at a loss to me. For example, I would buy a $1000 gift card from The Apple Store and sell it, via Craigslist, for $800. Take the $800, gamble it. Rinse. Repeat.

I don't do this anymore. I am not able to do it anymore, I have canceled all the cards, they are all in default. The bottom has been hit.

I am trying to wrap my head around how I will ever be able to get these dismissed through Chapter 7. I was completely upfront with my lawyer about everything (and he was quite assertive in the fact that I needed to address my mental health first, he said in over a decade of practicing law he had never seen a client in such dire emotional straits as I...) Anyway. My point is, I told him everything... and he didn't seem to think it would be a problem to at least go fo Chapter 7, giving the debt enough time to age (this has all happened within the past 9 months.)

I don't see how my behavior can be seen as anything but fraud. Its not legal to buy something on a credit card and then sell it to someone else for cash, even if I took a loss. Won't the Trustee throw me out without a further look?

Am I being overly pessimistic, or am i just facing up to the reality of my sad state of affairs?

Thank you for any and all input.

[JRScott]

You're being a bit overly pessimistic. It's normal in the first times we seek out bankruptcy.

Given sufficient time from your debts, and following the council of the lawyer I think you'll do fine. My dad had a bankruptcy discharged in the 1970s for gambling. I think you can do it too.

As your lawyer said attend your therapy and put a little time between you and the balance transfers. I'm not sure what he's advised you but at least 3 months from the last use of the card though with the balance transfers he might prefer more. The good thing is most of these card companies keep poor records. So the more time you put between you and the debt the less likely they can challenge anything .

It'll be okay mate.

[fltoo]

Therapy might be helping, but part of the reason you are not gambling anymore is because you have no money. So, please continue the counseling.

That being said, life is too short, so file, stay clean and get on with your life.

How many times did you rinse and repeat. Was it on a regular basis?

If you put enough time between these transactions and filing, you might be okay. Did you discuss this with several attorneys?

[beyondtherapy]

In response to "how many times"... well-- enough times to be 70K in debt. Before that I was in the black, with a credit score above 700. I do not have a problem budgeting funds when you don't factor gambling in. When you do, I am approaching hopeless and helpless.

I won't leave counseling. It is an anchor and a life raft.

I do not respond to 12 step programs; I am glad for those it works for, I am not one of them.

I am young. Ish. 32. I have no assets. No children. No house. No car. No stocks. Nothing.

I'm pretty low right now.

I'll write more later. Thanks for the responses.

[nullbalance]

I'm in the same boat. Gambling. I had a 720 credit score, never EVER had a credit card other than store credit which I always paid off after using it. I only used my bank debit card, I had $3000 in savings from my employer. I got one credit card to catch me up on bills and such after my gambling began to get out of hand...next thing I knew, I had a 2 cards and ran straight through a credit line account. My score dropped to 560 at it's lowest. I ran through my savings. I ruined it all. Therapy has helped some as well as medication (for impulse control). I wish I could say it gets better, but addiction is all consuming. I can only hope that for those of us who got to bk through this avenue, that things will get better once it is over.

[beyondtherapy]

Nullbalance--- what medication for impulse control are you on? My doctor wants to medicate me (and in the two years that I've been in therapy, I have tried the gamut) but if something is working for you perhaps I would reconsider?

[beyondtherapy]

Also-- to the community at large-- I appreciate the positive sentiments, but no one has addressed my particular concern. (Or if you have maybe my crap-colored glasses have blinded me to it.) But my biggest worry is that I can get called out for fraud against Amex for buying items on credit and then reselling them, even though it wasn't for profit... am I worrying needlessly about that? I have and will continue to pose that question to my lawyer, but he didn't seem concerned with it. His main concern was that I get help for my addiction and depression.

[nullbalance]

lamictal and lexapro, i stopped taking both because of side effects and cost.

[dealingsdone]

Well guys we are all in the same boat. I haven't posted much but I have also run up in the neighborhood of 60k for gambling, which I have done for 20 years. You are right, in many ways it does feel like fraud but I guess it isn't. In my case I was simply able to cash advance directly from the cards and I would manuver balances from one card to another in order to get available credit on the cards with the most liberal Cash Advance guidelines.

I considered medication at one point but I don't like the idea of side effects and generally being dulled. I recently seemed to have lost the desire to gamble, of course I have very little money but I haven't really wanted to do it since my last big losses. I just want to never have credit again.

[WoodSprite]

I don't see how my behavior can be seen as anything but fraud. Its not legal to buy something on a credit card and then sell it to someone else for cash, even if I took a loss. Won't the Trustee throw me out without a further look?

Am I being overly pessimistic, or am i just facing up to the reality of my sad state of affairs?

Thank you for any and all input.

Also-- to the community at large-- I appreciate the positive sentiments, but no one has addressed my particular concern. (Or if you have maybe my crap-colored glasses have blinded me to it.) But my biggest worry is that I can get called out for fraud against Amex for buying items on credit and then reselling them, even though it wasn't for profit... am I worrying needlessly about that? I have and will continue to pose that question to my lawyer, but he didn't seem concerned with it. His main concern was that I get help for my addiction and depression.

Beyondtherapy, it's a good sign that you're taking responsibility for the behavior, and an even better sign that you're committed to a course of action that's helping you overcome the addiction. Good for you, and congratulations.

I think most of us have had nightmares about being grilled about what reprehensible behavior got us into this situation. But if it's been 9 months since you've used the cards, I think you are worrying needlessly, especially since you've been honest with your attorney. I don't ever remember anyone here reporting that they'd been asked what they used ccs for, as long as they stopped using them well before filing.

It's fraud when you continue to use a card you fully intend to include in a bankruptcy. But at this point, as long as you're being honest, no one cares whether you bought yourself a fur coat, or paid off your sainted Aunt Thelma's hip replacement, or used it to put food on the table.

[fltoo]

Also-- to the community at large-- I appreciate the positive sentiments, but no one has addressed my particular concern. (Or if you have maybe my crap-colored glasses have blinded me to it.) But my biggest worry is that I can get called out for fraud against Amex for buying items on credit and then reselling them, even though it wasn't for profit... am I worrying needlessly about that? I have and will continue to pose that question to my lawyer, but he didn't seem concerned with it. His main concern was that I get help for my addiction and depression.

Sorry about that. If you took out money on cards to gamble and put enough time between that and the filing, no problems. Purchasing gift cards might be a problem, but no one can tell you for sure even if someone has done it. All cases are different. That's why I asked how many times you did this.

I would definitely check with more lawyers only because I don't like a lawyer telling me no problem without explaining it to me.

If you can, I would wait as long as possible due to the gift cards because it would be hard explaining why you bought the gift cards.

I have waited two years to file to avoid a trustee look back. Once you understand what you have to do during the wait, it really becomes a no brainer.

[Flamingo]

Also-- to the community at large-- I appreciate the positive sentiments, but no one has addressed my particular concern. (Or if you have maybe my crap-colored glasses have blinded me to it.) But my biggest worry is that I can get called out for fraud against Amex for buying items on credit and then reselling them, even though it wasn't for profit... am I worrying needlessly about that? I have and will continue to pose that question to my lawyer, but he didn't seem concerned with it. His main concern was that I get help for my addiction and depression.

There is no need to worry about that; your attorney is not concerned because you have expressed your addiction and the cause for what occurred. What you may have to provide if needed is evidence that you are in therapy and/or under the care of a MD for the problem and that you are working to get better. Your attorney will advise you about that if that is needed. Your main worry is that after getting the debt load out of the way how you will conduct yourself in the future. Gamblers and other compulsive addicts/spenders usually are serial BK filers and just think about finding yourself back in court in 8 or so years right back where you are now. That thought should be enough to help you pull through and get things under control. What kind of life is that living under the control of a place where the house always has the edge? Those casinos are big, bright and glitzy making investors billionaires; look at your house and the street on which you live compared to one of them...put the money in your pocket, not theirs.

Wishing you all the best of luck in getting things straightened out; I think you will do fine.