Gambling debts (professional gambling) leads to possible Chapter 7 Bankruptcy

[delray]

So, here's my story. Gambling professionally for several years and things went from bad to worse during the pandemic.
I have racked up over $100,000 in credit card debts (cards that were opened a while back).

I quit my FT job back in 2014.

I have several NOL carry forwards for self prop. businesses that failed.

I have filed tax returns for all tax years up through TY 2019.

When I file taxes for this year, I will have a NOL of over $250k.

If I file for Chapter 7 in 2020 or early 2021, I have a few questions:

1. What happens to the previous years NOL carryforwards for my self prop. businesses? All in my own name... Also, what happens to the NOL for this year? Does everything go away? Do i get to keep any NOL for future years tax returns?
2. For the over 100k credit card debts - this was racked up from gambling (cash advances and cash directly into my savings accounts). My last withdrawal was not too long ago.... does that matter? Is there a time frame that I need to wait or does it matter?
3. I am insolvent. No assets -- i lost everything to the casino. How does that affect chapter 7?
4. How many years of tax returns do I have to provide? How about bank statements?
5. My credit cards were all in my own name ... no cosigners or anything like that
6. I took a personal loan from some relatives earlier in the year and paid them back partially in May. I still owe them roughly $65k. I am assuming that this debt also gets discharged, correct?
7. How long does Chapter 7 take? from filing to discharge paperwork?
8. Are gamblers (prof or otherwise) treated differently by the bankruptcy court?
9. Do you actually have to go into court and stand in front of a judge for this stuff or is it all done remotely?
10. How can a person with absolutely no assets -- completely busted -- get an attorney for this? Any recommendations?
11. What happens if for some reason I do not receive discharged debts?
12. Are there other gamblers on this forum? How did your case go? Any advice?

Thank you

[justbroke]

Welcome to BKForum.

1. What happens to the previous years NOL carryforwards for my self prop. businesses? All in my own name... Also, what happens to the NOL for this year? Does everything go away? Do i get to keep any NOL for future years tax returns?

This is a tax question. I don't believe that the bankruptcy affects an net-operating loss (NOL) in any way. You would file tax returns as normal. Whether or not the Chapter 7 Trustee will try to assert that any current year tax refund is fair game, is too fact and trustee-specific.

2. For the over 100k credit card debts - this was racked up from gambling (cash advances and cash directly into my savings accounts). My last withdrawal was not too long ago.... does that matter? Is there a time frame that I need to wait or does it matter?

Cash advances matter and the amount of time from when you made those advances will matter. Generally, cash advances within 70 days is considered to be a presumptively non-dischargeable. The creditor would still need to file a complaint (adversary proceeding) in order to determine that the debt is in fact non-dischargeable. However, if the creditor suspects fraud (especially related to the application), they may still seek that complaint and have the debt found to be non-dischareable.

3. I am insolvent. No assets -- i lost everything to the casino. How does that affect chapter 7?

A Chapter 7 is a liquidation. If you have no assets, then nothing can be liquidated. The lack of assets has no affect on the Chapter of bankruptcy that you're filing. In fact, most Chapter 7s are "no asset" Chapter 7s (mostly due to exemptions).

4. How many years of tax returns do I have to provide? How about bank statements?

It depends. You likely need 1 at the time of filing and the Trustee may likely request tax returns for two additional years. You also have to be up to date on your tax filings.

5. My credit cards were all in my own name ... no cosigners or anything like that

I don't read a question here.

6. I took a personal loan from some relatives earlier in the year and paid them back partially in May. I still owe them roughly $65k. I am assuming that this debt also gets discharged, correct?

Well, since you paid them back within the last year, it's a preference (and possibly a fraudulent conveyance). Hopefully you can show that you were paying all your other creditors on time and that you didn't "prefer" your family/friends over the other creditors. This is actually a place where a lot of debtors get exposed. Your family may be forced to return the money to the Trustee for distribution to the entire unsecured creditor pool.

7. How long does Chapter 7 take? from filing to discharge paperwork?

From filing to discharge is usually 90-120 days (give or take). How long it takes to close, however, is a different story. Since the Chapter 7 is about liquidation and managing that process, it could take 1 or more years to completely administratively close a Chapter 7. If you have those insider preferences, it will make it more complex. But, the bottom line is that the discharge comes regardless of the closing date and will come 60-days after your 341 Meeting of Creditors.

8. Are gamblers (prof or otherwise) treated differently by the bankruptcy court?

Not by the court, but the Trustees (in all Chapters of bankruptcy), know that gambling is a serious problem. They will ask many questions at the 341 Meeting. They will want to know, and hear you say, that it is completely out of your system. Bankruptcy will never cure a gambling addiction. In fact, it just may fuel it by allowing a debtor to wipe the slate clean, and then to start gambling again. The Trustee may have no sympathy, but that's because of the facts.

9. Do you actually have to go into court and stand in front of a judge for this stuff or is it all done remotely?

You typically only need to attend the 341 Meeting of Creditors. Most of those are being held via video conferences during the pandemic (COVID-19 Global Pandemic 2020).

10. How can a person with absolutely no assets -- completely busted -- get an attorney for this? Any recommendations?

Many courts have a Pro Bono (free) clinic where attorneys will help you with the paperwork. The problem for you is that you really need representation and perhaps at any hearings. I'm worried about your insider preferences (payments) to your family.

11. What happens if for some reason I do not receive discharged debts?

You would likely receive discharge of "most" of your debts. I can't speculate as to what would cause you to not receive a discharge unless there is actual fraud and the Trustee and/or creditors prove so.

12. Are there other gamblers on this forum? How did your case go? Any advice?

Yes, there are others here. I was not a professional gambler but I also had issues with gambling. I ran up significant debt on credit cards. It is out of my system. I haven't been in a casino since my bankruptcy filing.

[delray]

Welcome to BKForum.

This is a tax question. I don't believe that the bankruptcy affects an net-operating loss (NOL) in any way. You would file tax returns as normal. Whether or not the Chapter 7 Trustee will try to assert that any current year tax refund is fair game, is too fact and trustee-specific.

Cash advances matter and the amount of time from when you made those advances will matter. Generally, cash advances within 70 days is considered to be a presumptively non-dischargeable. The creditor would still need to file a complaint (adversary proceeding) in order to determine that the debt is in fact non-dischargeable. However, if the creditor suspects fraud (especially related to the application), they may still seek that complaint and have the debt found to be non-dischareable.

A Chapter 7 is a liquidation. If you have no assets, then nothing can be liquidated. The lack of assets has no affect on the Chapter of bankruptcy that you're filing. In fact, most Chapter 7s are "no asset" Chapter 7s (mostly due to exemptions).

It depends. You likely need 1 at the time of filing and the Trustee may likely request tax returns for two additional years. You also have to be up to date on your tax filings.

I don't read a question here.

Well, since you paid them back within the last year, it's a preference (and possibly a fraudulent conveyance). Hopefully you can show that you were paying all your other creditors on time and that you didn't "prefer" your family/friends over the other creditors. This is actually a place where a lot of debtors get exposed. Your family may be forced to return the money to the Trustee for distribution to the entire unsecured creditor pool.

From filing to discharge is usually 90-120 days (give or take). How long it takes to close, however, is a different story. Since the Chapter 7 is about liquidation and managing that process, it could take 1 or more years to completely administratively close a Chapter 7. If you have those insider preferences, it will make it more complex. But, the bottom line is that the discharge comes regardless of the closing date and will come 60-days after your 341 Meeting of Creditors.

Not by the court, but the Trustees (in all Chapters of bankruptcy), know that gambling is a serious problem. They will ask many questions at the 341 Meeting. They will want to know, and hear you say, that it is completely out of your system. Bankruptcy will never cure a gambling addiction. In fact, it just may fuel it by allowing a debtor to wipe the slate clean, and then to start gambling again. The Trustee may have no sympathy, but that's because of the facts.

You typically only need to attend the 341 Meeting of Creditors. Most of those are being held via video conferences during the pandemic (COVID-19 Global Pandemic 2020).

Many courts have a Pro Bono (free) clinic where attorneys will help you with the paperwork. The problem for you is that you really need representation and perhaps at any hearings. I'm worried about your insider preferences (payments) to your family.

You would likely receive discharge of "most" of your debts. I can't speculate as to what would cause you to not receive a discharge unless there is actual fraud and the Trustee and/or creditors prove so.

Yes, there are others here. I was not a professional gambler but I also had issues with gambling. I ran up significant debt on credit cards. It is out of my system. I haven't been in a casino since my bankruptcy filing.

How much debt related to gambling did you discharge in you BK filing? If you don't mind me asking? Also, some of the gam debt was incurred online during the pandemic lockdown (i.e. some of the more famous online casinos). transfers via crypto. does this create any problems? Probably a dumb question....

...Any suggestions for a pro bono attorney in FL?

[justbroke]

I do not know of specific attorneys offering pro bono services. However, I believe that most of the courts in Florida offer a Pro Bono clinic of sorts. You really need the help of an attorney and I would start with the clinic and see where you can get with that.

(I actually don't know the total amount and I'm afraid to even think about it. I don't know how to walk away, so I just stay away.)

[flashoflight]

I understand you are completely busted, but you need to get a real full-time job just like the rest of us to raise the money for an attorney. Many people are busted living paycheck to paycheck but they are capable of working full-time. I only say "real job" because it cannot be professional gambler or day trader ever again. I'll go as far as saying professional gambler and day trader/retail stock investor are not legitimate professions. Even a retail job would get you enough money to pay for a lawyer. You absolutely need an attorney. Simple chapter 7s can be done pro se but yours isn't one of them.

The second thing is you need to quit gambling for life before you file. Right now you're not gambling because you have no money. Paper evidence of self exclusion from local casinos and GA meetings would be a good start and provide good evidence for the trustee handling your case. I hope you turn this into a "Coming to Jesus" moment and turn your life around with the gambling addiction, and only then use the ch7 as a tool for rehabilitation. If you never enter a casino ever again like JB, chapter 7 is a great tool. Not so much if you continue gambling/day trading post-petition.