How Chapter 7 Bankruptcy Affects Gambling Debts

Bankruptcy can be a useful tool for individuals who are struggling with overwhelming debt. However, not all debts are treated equally in bankruptcy. Gambling debts, in particular, can pose unique challenges when it comes to filing for Chapter 7 bankruptcy. Here’s what you need to know about how Chapter 7 bankruptcy affects gambling debts.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a type of bankruptcy that allows individuals to discharge most of their unsecured debts, such as credit card debt, medical bills, and personal loans. In a Chapter 7 bankruptcy, a court-appointed trustee may liquidate some of the debtor’s assets to repay creditors, but many types of property are exempt from liquidation, allowing individuals to keep their homes, cars, and other essential assets.

Gambling Debts and Chapter 7 Bankruptcy

Many people who struggle with gambling addiction find themselves saddled with significant gambling debts. These debts can be particularly challenging to deal with in bankruptcy because they are considered non-dischargeable in many cases. Under the Bankruptcy Code, debts incurred as a result of gambling or gambling-related activities are generally not dischargeable if they were incurred within 90 days of filing for bankruptcy.

Exceptions to Non-Dischargeable Gambling Debts

While gambling debts are often non-dischargeable in bankruptcy, there are some exceptions to this rule. If a debtor can demonstrate that they did not have the intent to defraud their creditors when incurring the gambling debts, they may be able to have these debts discharged in a Chapter 7 bankruptcy. Additionally, if the gambling debts were incurred for the purpose of providing basic necessities (such as food, shelter, or medical care) for the debtor or their dependents, they may also be dischargeable.

Seeking Professional Advice

Given the complexities of dealing with gambling debts in bankruptcy, individuals who are considering filing for Chapter 7 bankruptcy should seek the advice of an experienced bankruptcy attorney. A knowledgeable attorney can help debtors understand their options for dealing with gambling debts and guide them through the bankruptcy process.


Filing for Chapter 7 bankruptcy can provide a fresh start for individuals facing overwhelming debt. However, it’s important to understand how gambling debts are treated in bankruptcy and to seek the guidance of a qualified professional when navigating this process. By working with an experienced bankruptcy attorney, individuals can make informed decisions about how to address their gambling debts and move towards a more stable financial future.

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