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    Gambling winnings during chapter 13

    I have gambled 1 time ($20) and won $2000. I am in Chapter 13, 100% payback; never late on payment. I'm reading trustee can move to dismiss case. True?

    #2
    Thank you for the reply justbroke. There seems to be far too much bankruptcy info on the web including several sites that say trustee will move to dismiss case or you will have need to pay winnings into case.

    Comment


      #3
      If you weren't already, in a 100% plan, you might have to pay the winnings to the trustee. Too be completely safe, call your attorney. He will probably say what justbroke predicts.
      LadyInTheRed is in the black!
      Filed Chap 13 April 2010. Discharged May 2015.
      $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

      Comment


        #4
        Originally posted by Traders View Post
        Thank you for the reply justbroke. There seems to be far too much bankruptcy info on the web including several sites that say trustee will move to dismiss case or you will have need to pay winnings into case.
        As LITR eludes, debtors in 100% plans don't have a problem with turnover of any "windfalls" or winnings because they are already paying back 100%.

        If you were not in a 100% plan, the trustee "may" decide to dismiss your case if you are a.) in jeopardy of not completing your plans, b.) not making your payments, and/or c.) not turning over any extra income. The problem is really to help true gamblers help themselves. The trustee is trying to keep the debtor on tract and adhering to the terms of the confirmation order. My confirmation order did not mention anything about gambling (and I have gambled in the past and disclosed the fact in my statement of financial affairs). My confirmation order did, however, mention disposable income and tax refunds. The real problem is not the gambling, per se, for the Chapter 13 Trustee. The real problem is that any winnings, in excess of losses, should be turned over as "disposable" income immediately.

        That last paragraph doesn't apply to you because you are in a 100% plan.

        (I could not find one Chapter 13 case in my district which was dismissed for gambling. Many were dismissed for not providing disposable income to the trustee or for not paying.)

        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog


        I am not an attorney. Any advice provided is not legal advice.

        Comment


          #5
          Why would you say anything to anyone?

          Comment


            #6
            Above $600 the place of winningmust send a 1099 form. The IRS, thus the Fed Gov't knows.

            Comment


              #7
              The above is not true. The winning has to be much higher than $600; for table games it is $10,000, for slots it is $1200. The 1099 is written if you win a jackpot that is $1200 or higher. If you were playing for a while, and won $2000 after several wins (each below $1200) but the total for the night ended up being$2000 you would not have a 1099 issued. I know this from personal experience. Did they issue one while you were playing? Do a web search and you can verify. If you're concerned just call and ask your attorney a general question. I agree though, this is not a habit you want to get hooked on - during your plan or ongoing. In terms of IRS reporting, if you've lost money playing during the same year, they can offset your winnings. Do you use a casino players card, where they track your play? If so, you can ask them for a statement of loss/winnings at the end of the year that you can use for tax purposes.
              Last edited by sophieanne; 01-15-2018, 12:33 PM.
              Filed Chapter 13 - 07/20/12
              Discharged 8/2/16

              Comment


                #8
                Originally posted by Traders
                Hello again.....unsecured creditors that did not participate in my Chapter 13, can they send me IRS paperwork to file on? I understand I will not have to do anything more with them.
                Yes. Any creditor that has "forgiven" debt will file a 1099-A/C with the IRS. If you filed bankruptcy, then you would file Form 982 along with those 1099-Cs to exclude that amount from your taxes since it was the result of insolvency. I recommend that you use a tax service to file your returns when you have 1099-Cs related to debt that was discharged in a bankruptcy. While that form may be easy to complete, I'm not a tax expert and you should get guidance from someone that does this for a living!

                Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                Status: (Auto) Discharged and Closed! 5/10
                Visit My BKForum Blog: justbroke's Blog


                I am not an attorney. Any advice provided is not legal advice.

                Comment


                  #9
                  UPDATE: I need some peace of mind. I am in Arkansas, 100% CH 13 pay. I start my 3rd year 1/1/19. I just paid $20K of the $46K I owe. My gambling has increased. I gambled 6 days in 2018. $59,300! I of course lost it all trying to hit a big one. I am assuming that because I am 100% pay that I am still ok????

                  Comment


                    #10
                    Traders,have you discussed your gambling activities with your attorney? My advice is to take caution when engaging in a gambling activity that could end up really big for you and then having to fork over the winnings to the trustee while in a CH13.
                    Filed CH13 Winter of 2018; Confirmed Summer of 2018; 5 Year payment plan

                    Comment


                      #11
                      I won $150 in a football pool and found $8.00 in the dryer. Should I run to my BK attorney and tell her?










                      Comment


                        #12
                        Originally posted by craneman View Post
                        I won $150 in a football pool and found $8.00 in the dryer. Should I run to my BK attorney and tell her?









                        Comments like yours deserve nothing but the trash can. Grow up, maybe go to FB and be sarcastic.

                        Comment


                          #13
                          Originally posted by Traders View Post

                          Comments like yours deserve nothing but the trash can. Grow up, maybe go to FB and be sarcastic.
                          I don't have a gambling problem.... Seek help for your addiction.

                          Comment


                            #14
                            In my moderator's voice, everyone please relax and stop any personal insults. It's un-necessary. We are all in or have been in bankruptcy. People provide advice of their own free accord and the BKForum rules do not permit any personal attacks.

                            As justbroke (not a moderator)... as a person who has gambled, you do need to inform your attorney when you have significant gambling income. You should discuss gambling with your attorney as well. If the Trustee finds out, they could decide to seek dismissal of your case if they feel that it jeopardizes the plan.

                            Since you are in a 100% plan, it may not make affect anything, but I'd feel better with you discussing with your attorney. As you may already know, a 100% plan gives you the utmost flexibility as it allows you to discharge your debts.

                            I would rather you try to get gambling out of your system because it is never a good combination with bankruptcy, although the latter typically causes the former. If your Chapter 13 starts to fail and the Trustee finds out it is due to gambling, that could cause issues with any "good faith" challenges should you convert to Chapter 7. I'd rather find your successfully completing the Chapter 13 than to invite any cause of concern for the Trustee.

                            I believe that craneman was just saying that it's nobody's business but you, the IRS, and the casino and why tell your attorney or the Trustee. The reason is, craneman, is that this is significant gambling, not your Sunday office pool. Whether or not your Trustee would care is a question of how much do they look at your tax returns. If you don't submit tax returns to the Trustee, then they'd never know unless you disclosed the gambling. (Casinos send the IRS a W-2G, gambling winnings, on most winnings over $600.).

                            Bottom line, I don't think it matters "too" much, but I'm worried about the gambling and the long term affects on your Chapter 13.

                            Edited To Add: I was curious and looked up a case in which there was a "windfall" in a Chapter 13 case. The judge opined in In re Richardson, 283 B.R. 783, 800 (Bankr. D. Kan. 2002) that "If after plan confirmation, a debtor receives a windfall sufficient to pay the projected disposable income, but fails to do so, the trustee should move to dismiss the case, not try to pursue the windfall. Dismissal will deny the debtor a discharge and allow his or her creditors freedom to collect their full claims from the windfall under state law."

                            My personal opinion is that It's a gamble to gamble in an active Chapter 13 regardless of whether you're in a 100% plan or not. To answer your original question, I would still contact my attorney to make sure that the 100% plan covers me from any wrath of the Trustee should they find out.
                            Last edited by justbroke; 01-02-2019, 05:50 PM.
                            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                            Status: (Auto) Discharged and Closed! 5/10
                            Visit My BKForum Blog: justbroke's Blog


                            I am not an attorney. Any advice provided is not legal advice.

                            Comment


                              #15
                              Originally posted by justbroke View Post
                              In my moderator's voice, everyone please relax and stop any personal insults. It's un-necessary. We are all in or have been in bankruptcy. People provide advice of their own free accord and the BKForum rules do not permit any personal attacks.

                              As justbroke (not a moderator)... as a person who has gambled, you do need to inform your attorney when you have significant gambling income. You should discuss gambling with your attorney as well. If the Trustee finds out, they could decide to seek dismissal of your case if they feel that it jeopardizes the plan.

                              Since you are in a 100% plan, it may not make affect anything, but I'd feel better with you discussing with your attorney. As you may already know, a 100% plan gives you the utmost flexibility as it allows you to discharge your debts.

                              I would rather you try to get gambling out of your system because it is never a good combination with bankruptcy, although the latter typically causes the former. If your Chapter 13 starts to fail and the Trustee finds out it is due to gambling, that could cause issues with any "good faith" challenges should you convert to Chapter 7. I'd rather find your successfully completing the Chapter 13 than to invite any cause of concern for the Trustee.

                              I believe that craneman was just saying that it's nobody's business but you, the IRS, and the casino and why tell your attorney or the Trustee. The reason is, craneman, is that this is significant gambling, not your Sunday office pool. Whether or not your Trustee would care is a question of how much do they look at your tax returns. If you don't submit tax returns to the Trustee, then they'd never know unless you disclosed the gambling. (Casinos send the IRS a W-2G, gambling winnings, on most winnings over $600.).

                              Bottom line, I don't think it matters "too" much, but I'm worried about the gambling and the long term affects on your Chapter 13.

                              Edited To Add: I was curious and looked up a case in which there was a "windfall" in a Chapter 13 case. The judge opined in In re Richardson, 283 B.R. 783, 800 (Bankr. D. Kan. 2002) that "If after plan confirmation, a debtor receives a windfall sufficient to pay the projected disposable income, but fails to do so, the trustee should move to dismiss the case, not try to pursue the windfall. Dismissal will deny the debtor a discharge and allow his or her creditors freedom to collect their full claims from the windfall under state law."

                              My personal opinion is that It's a gamble to gamble in an active Chapter 13 regardless of whether you're in a 100% plan or not. To answer your original question, I would still contact my attorney to make sure that the 100% plan covers me from any wrath of the Trustee should they find out.
                              Response from attorney:
                              An increase in income would not affect you as long as you continue to make your payments and remain a full pay (100% pay).
                              With that being said, if you were to ever have a reduction in income which resulted in redoing the budget and lowering the payment, it could create issues. The reason for that is that the Trustee might ask for income information for the previous years to see if you could have paid more in previously. This should only happen if you were to have a change that resulted in us attempting to lower the payment.

                              Comment

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