Gambling debt and which Chapter?

[Dweezel]

I'm not sure how the courts will look at me. Haven't even talked to a lawyer yet. In the past 2 years, I have gambled away my retirement 401K, took out 2nds and went through a divorce. If I sold my place, today I might walk away with $20,000 max. Just curious what the courts will say about my behavior. Been seeing a shrink lately, and have been on anti-depressents now for years, trying to get my life turned around. Sure don't feel like getting scolded like a child for doing what I have done. Became an endless cycle.
Thanks, Dweezel

[lrprn]

Welcome Dweezel. You won't get finger-pointing here except from the occasional troll that drops by - we all have wrestled with our personal financial demons (some in our control, some outside our control) or we wouldn't be here. Good that you are getting help for your gambling addiction - that's key. As long as your finances reflect your gambling spending and you can show that you are serious about changing that lifestyle and are getting help, that's what your lawyer and trustee will care about. I hope whatever direction you go, your desire to change your life around will create a renewed sense of hope for you. Come back and let us know what you decide to do or just to vent if that helps. Best of luck to you!

[SinkingFast]

First,............ Congrats on admitting you have a gambling issue and seeking help.

What Chapter to file will depend on lots of variables. But, gambling is a tough one in some Courts. Debt is supposed to debt is supposed to be debt, but that's not always the case.

Best advice from OP's posts who were gamblers,.......... Be prepared to document your losses.

The Trustee may wanna dig to be sure you didn't cash out all the funds and bury it in Mason Jars in the back yard.

So, in addition to all the docs that attnys will tell you they need, you'll wanna gather together as much gambling documentation as you can.

Also, you wanna have only as much cash as your State allows you to Exempt. So maybe you wanna invest in yourself a bit before you file. Need more life insurance? Maybe some new clothes? Been to the doctor or the dentist lately? Car need tires or engine repairs?

Also,......... Take your time. Put distance between filing and your gambling. Be patient. The longer you wait to file, the better.

[aa06a47]

I'm not sure how the courts will look at me. Haven't even talked to a lawyer yet. In the past 2 years, I have gambled away my retirement 401K, took out 2nds and went through a divorce. If I sold my place, today I might walk away with $20,000 max. Just curious what the courts will say about my behavior. Been seeing a shrink lately, and have been on anti-depressents now for years, trying to get my life turned around. Sure don't feel like getting scolded like a child for doing what I have done. Became an endless cycle.
Thanks, Dweezel

Dweezel, welcome to the board. Several of us are here because of gambling.

When it comes to gambling and the courts, the only think the trustee may ask different from other types of debt is that your able to prove the loss. If you used the casino player cards, this won't be a problem. Just get the win/loss statements from the casino and you have your proof. They may also ask you if your getting help for your problem and you obviously are.

Debts because of gambling are usually heavy into cash advances. You need to make sure you wait a minimum of 90 days since the last cash advance and if you want off the radar screen of the credit card companies try and wait longer (6 months).

To determine if your a chapter 7 or chapter 13 depends on your income. You state you have 20K in equity in your home. You will need to find out your states exemption to see how much of it is protected.

Keep your head up, BK isn't easy, but it will help you get you a financial fresh start.

[Dweezel]

Actually my gambling debt is

from commodity trading. Documentation is no problem there. See I graduated from dog tracks to Vegas, then to commodities. When doing a Chapter 13, do they ever go back to when you cashed out on the First mortgage and reduce the obligation? As for my second morgage, about 75% was for cash and the balance was credit card payoffs. Should I be looking at selling my place, and starting over instead of bk? It pretty much would be a "wash" Then Uncle Sam will probably have his hand out for taxes regarding capital income from selling the house. But have lost all my equity in commodities.

[FoolAndHisMoney]

from commodity trading. Documentation is no problem there. See I graduated from dog tracks to Vegas, then to commodities. When doing a Chapter 13, do they ever go back to when you cashed out on the First mortgage and reduce the obligation? As for my second morgage, about 75% was for cash and the balance was credit card payoffs. Should I be looking at selling my place, and starting over instead of bk? It pretty much would be a "wash" Then Uncle Sam will probably have his hand out for taxes regarding capital income from selling the house. But have lost all my equity in commodities.

Only you can really answer this. We really can't, but if I had any kind of home equity or an asset that I can sell to pay off debts or at least lower them to a sustainable level I would avoid bankruptcy. If you lost all your equity then there's no point in selling the house since you will only break even unless you have a high mortgage and want to save money on monthly expenses.

[aa06a47]

from commodity trading. Documentation is no problem there. See I graduated from dog tracks to Vegas, then to commodities. When doing a Chapter 13, do they ever go back to when you cashed out on the First mortgage and reduce the obligation? As for my second morgage, about 75% was for cash and the balance was credit card payoffs. Should I be looking at selling my place, and starting over instead of bk? It pretty much would be a "wash" Then Uncle Sam will probably have his hand out for taxes regarding capital income from selling the house. But have lost all my equity in commodities.

Depends on how long ago it happened. I believe the look back period is 1 year, but could be wrong on that. As long as you have a paper trail of where the money went, it will not be an issue. If it was used to pay a creditor more than 600 in the last 90 days, they may require the creditor to pay the money back, and if you paid an insider back within the year, they may go after the insider to get the money returned.

All the trustee and courts are looking for in a nutshell on this stuff is to keep people on the up and up and are not hiding cash. I'm sure many people have taken out large cash advances over a year period, stashed the money away, and filed BK. The trustee will just be looking to make sure there is no reasonable chance you did that.

Filing BK is a personal decision. If you find you have enough non-exempt assets that if sold would pay back unsecured creditors, then BK will really not help you that much. If that is the case, then technically, you are not bankrupt.

[SinkingFast]

from commodity trading. Documentation is no problem there. See I graduated from dog tracks to Vegas, then to commodities. When doing a Chapter 13, do they ever go back to when you cashed out on the First mortgage and reduce the obligation? As for my second morgage, about 75% was for cash and the balance was credit card payoffs. Should I be looking at selling my place, and starting over instead of bk? It pretty much would be a "wash" Then Uncle Sam will probably have his hand out for taxes regarding capital income from selling the house. But have lost all my equity in commodities.

Actually, the Law changed on that issue several years ago. You may be able to buy a cheaper/less expensive cost basis house and not get pinged on Cap Gains.

http://www.irs.gov/publications/p523/index.html

Click on "Excluding the Gain" about half way down the page.

[Jman30]

I'm not sure how the courts will look at me. Haven't even talked to a lawyer yet. In the past 2 years, I have gambled away my retirement 401K, took out 2nds and went through a divorce. If I sold my place, today I might walk away with $20,000 max. Just curious what the courts will say about my behavior. Been seeing a shrink lately, and have been on anti-depressents now for years, trying to get my life turned around. Sure don't feel like getting scolded like a child for doing what I have done. Became an endless cycle.
Thanks, Dweezel

Dweezel, welcome to the boards! Don't worry about being scolded here. We've all done something to get into this spot. Mine was acting like a child in college and running up debt that I had no intention of paying. Credit cards, bouncing checks, overdraft, lines of credit, breaking leases. Sure I enjoyed myself at the time, but when I got married, started a family and became a responsible adult, all that old debt came back to haunt me.

As long as you get the help to control the addiction, BK, though very hard, will give you a new start on life.