Should I file for BKR?

[chucho26]

Here is my situation:

I have about 18 000$ of debts (mostly gambling) and a 17 000$ of student loans (that is NOT dischargeable).
I make max 2000$ per month net. I need a new car, probably used, MAXIMUM 3000$ that I will pay for it.
I could MAYBE pay my debts by working like a dog, getting exhausted in a few years, but it might hurt.

I am NOT planning on buying a house or a car in the futur. I am a nurse; therefore, bankruptcy does NOT affect my job or anything related to it (I verified).

The only negative aspect of the BKR would be the credit score, and frankly, I don<t care about it. Of course, if I don't get a discharge it would be very very hurtful.

Should I go for it? Is it worth it?

[bcohen]

More information would be needed to better advise you. Specifically, with regard to your gambling debts, how long ago were the debts incurred, how many debts are there, what is the amount of each debt, what is the nature of each debt, i.e. are they cash advances on credit cards, casino markers, promissory notes, etc?

[chucho26]

Hi Bcohen,

The gambling debts have occured in the past two years I would say including some this month. I always made many payments to my credit cards to try to clear them, but restarted to gamble.

I have about 16 000$ of gambling debts which are ALL either deposits on gambling websites with the credit card (MOST OF THEM) or cash advances.

No casino markers and no promissor notes at all.

What do you think?
Thanks!

[justbroke]

I think you should be consulting with several attorneys (3-5) about this issue. One of the questions will be whether you stopped and have it out of your system. It may include you registering with gambler's anonymous. I would try to tackle my gambling addiction before applying for bankruptcy (because any gambling you do the day after filing is non-dischargeable and could complicate your case).

I personally believe that you need some time between using all these cash advances and gambling on the eve of bankruptcy. In fact, anything 90 days prior to filing (and over $750) can be construed as both "eve of bankruptcy" and presumptuously non-dischargeable. I know that my court / district considers gambling to be a "luxury good or service".

The worse case is that you file for bankruptcy and the court finds the gambling debt to be non-dischargeable, and you don't get to discharge that debt. Then you have wasted the Chapter 7 discharge on the minor debt and will never be able to discharge that gambling debt. I actually had gambling debt but it was out of my system and was not from credit card advances (it was directly from wages). I was asked if it was out of my system. I had not gambled for 8 months prior to filing.

Of course, you circumstance may vary, but you really need to get it out of your system or bankruptcy is useless.

[chucho26]

I think you should be consulting with several attorneys (3-5) about this issue. One of the questions will be whether you stopped and have it out of your system. It may include you registering with gambler's anonymous. I would try to tackle my gambling addiction before applying for bankruptcy (because any gambling you do the day after filing is non-dischargeable and could complicate your case).

I personally believe that you need some time between using all these cash advances and gambling on the eve of bankruptcy. In fact, anything 90 days prior to filing (and over $750) can be construed as both "eve of bankruptcy" and presumptuously non-dischargeable. I know that my court / district considers gambling to be a "luxury good or service".

The worse case is that you file for bankruptcy and the court finds the gambling debt to be non-dischargeable, and you don't get to discharge that debt. Then you have wasted the Chapter 7 discharge on the minor debt and will never be able to discharge that gambling debt. I actually had gambling debt but it was out of my system and was not from credit card advances (it was directly from wages). I was asked if it was out of my system. I had not gambled for 8 months prior to filing.

Of course, you circumstance may vary, but you really need to get it out of your system or bankruptcy is useless.

Thanks for your reply:

I KNOW that I will NOT fill for bankruptcy for a minimum of 3 months and a half before the last gambling purchase. I will also go to GA meetings, I will probably go to the casino and self exclude myself and keep the paper.

I know that every case is different, but I would like you to answer the following questions if you could.


1) I have 17 000$ of student loans that are NOT dischargable and 16 000$ of debts on cc that can be dischargable (only 1 CREDIT CARD). Should I consider a consumer proposal in my situation? My goal would be to get rid of a MINIMUM of 10 000$ of that 16 000$ debt. Do you think it could work?

2) If I wait 3 months and a half to go bankrupt and I went to GA meetings, stopped the gambling and gambling transcations, do you think that there is STILL a possibility that my discharged is COMPLETELY OPPOSED and I will have to pay the 16 000$ in gambling debts until its last penny?

3) WHAT SHOULD I do in your opinion. So far I met 2 attorneys.
The first one told me: WAIT 90 DAYS and we will fill bankruptcy and you have good chances of your case not being objected.
The second one told me that a consumer proposal would be a good choice; however, according to the math we did I would save 8000$ from debts whereas in the bankruptcy I would be cleared of 16 000$

4) I know that when creditors OBJECT a discharge they must have a very strong case and a lot of money to get. I have one credit card that has a balance of 100$. If I cash-out 3000$ from that creditor to put it on my VISA and reduce the debt to 13 000$ instead of 16 000$ and have the other one at 3000$, do I have more chances of being discharged, KNOWING that the 3000$ credit card will probably not send lawyers for a tiny amount like that.

Thanks!

[justbroke]

1) I have 17 000$ of student loans that are NOT dischargable and 16 000$ of debts on cc that can be dischargable (only 1 CREDIT CARD). Should I consider a consumer proposal in my situation? My goal would be to get rid of a MINIMUM of 10 000$ of that 16 000$ debt. Do you think it could work?

I can't tell you what you should do in your particular situation. I can say that debt settlement does not work in most cases. I can say that not every creditor "wants" to settle. I can say that there can be a significant tax liability from settlement of debt. I can say that with every good intention I ever had with paying back over $120K in credit card debt, 100% settlement and actually paying it off, was never going to happen (despite my good intentions and plans).

2) If I wait 3 months and a half to go bankrupt and I went to GA meetings, stopped the gambling and gambling transcations, do you think that there is STILL a possibility that my discharged is COMPLETELY OPPOSED and I will have to pay the 16 000$ in gambling debts until its last penny?

Proving that you stopped is 90% of the issue. The other issue I'll discuss in #4.

3) WHAT SHOULD I do in your opinion. So far I met 2 attorneys.
The first one told me: WAIT 90 DAYS and we will fill bankruptcy and you have good chances of your case not being objected.
The second one told me that a consumer proposal would be a good choice; however, according to the math we did I would save 8000$ from debts whereas in the bankruptcy I would be cleared of 16 000$

I don't like the consumer proposal (debt settlement, debt management) because they hardly every work (period). The person who gains from a consumer debt management (settlement) is the debt management company!!!

4) I know that when creditors OBJECT a discharge they must have a very strong case and a lot of money to get. I have one credit card that has a balance of 100$. If I cash-out 3000$ from that creditor to put it on my VISA and reduce the debt to 13 000$ instead of 16 000$ and have the other one at 3000$, do I have more chances of being discharged, KNOWING that the 3000$ credit card will probably not send lawyers for a tiny amount like that.

Do not start to move money around. It helps nothing at all and complicates your case. What if both creditors then decided to claim that you took money without the intention to pay any of it back? Now you are really in a bind. (In fact, you mentioning that you would consider doing such is an indication that you don't intend to pay any of it back.) Just leave it alone. So long as you have been making payments to those credit cards, it is less likely that you will get an objection to discharge for that specific debt.

My personal opinion: stop gambling, get help, stop taking advances or using the credit cards, wait at least 90 days before filing, make regular credit card payments, and seek help from a licensed attorney. I would also consult with 3-5 attorneys about this issue since you have an ongoing gambling addiction. Ask the attorney if they specifically dealt with debtors with a very recent (current) gambling issue.

[Lindahill]

Bankruptcy may object your discharge on the basis that caused from gambling debt with no intention of paying the debt and considering bankruptcy as a way out. Gambling debt can be eliminated with bankruptcy but the court will assess very well if the debt were incurred in good intention

[chucho26]

[chucho26]

I can't tell you what you should do in your particular situation. I can say that debt settlement does not work in most cases. I can say that not every creditor "wants" to settle. I can say that there can be a significant tax liability from settlement of debt. I can say that with every good intention I ever had with paying back over $120K in credit card debt, 100% settlement and actually paying it off, was never going to happen (despite my good intentions and plans).

Proving that you stopped is 90% of the issue. The other issue I'll discuss in #4.

I don't like the consumer proposal (debt settlement, debt management) because they hardly every work (period). The person who gains from a consumer debt management (settlement) is the debt management company!!!

Do not start to move money around. It helps nothing at all and complicates your case. What if both creditors then decided to claim that you took money without the intention to pay any of it back? Now you are really in a bind. (In fact, you mentioning that you would consider doing such is an indication that you don't intend to pay any of it back.) Just leave it alone. So long as you have been making payments to those credit cards, it is less likely that you will get an objection to discharge for that specific debt.

My personal opinion: stop gambling, get help, stop taking advances or using the credit cards, wait at least 90 days before filing, make regular credit card payments, and seek help from a licensed attorney. I would also consult with 3-5 attorneys about this issue since you have an ongoing gambling addiction. Ask the attorney if they specifically dealt with debtors with a very recent (current) gambling issue.

Justbroke here is my last question for you ok.

I would like the most complete answer you could give me PLEASE!!!!

I am thinking about two options that I explain to you. In those two options, I will have self excluded myself from the casino (which I did yesterday), go to GA meetings, and of course, not used one penny for gambling. My last gambling statement is a 1000$ deposit on a website from my cc on November 15 roughly.

Option 1:

I go and fill a consumer proposal in WHICH, I will want to clear 10 000$ out of 18 000$ of debts that I have and agree to pay an amount for 60 months on my credit card. I will wait a minimum of TWO MONTHS before filling the consumer proposal after the date of the last gambling (November 15). IF THEY REFUSE THE CONSUMER PROPOSAL of offer me something bad, I will, on APRIL 15, which is FIVE MONTHS after my last gambling situation, fill for Bankruptcy.

Question: If I do this, KNOWING that I stopped gambling, I excluded myself from the casino, I went to GA meetings, I OFFERED THEM to pay part of the debt I contracted, I MADE a few minimum payments until April, DO YOU THINK THAT THEY COULD OPPOSE COMPLETELY MY DISCHARGE AND SAY YOU HAVE TO PAY THE TOTAL OF 18 000$ AND YOUR BKR IS COMPLETELY OPPOSED BYE BYE? I think that it should be extremeley unlikely


Option 2:
I wait 5 months after my last gambling purchase, I have stopped and excluded myself, I went to GA meetings, I did the minimum payments, and I fill for BKR 5 months after my last gambling purchase.

Do you think that this option is better than the first one? Why?!



Thanks!

[justbroke]

I can't say which is better for you personally. Debt management, through a consumer counseling service (CCS) works in some cases, but most of those people end up in bankruptcy. Why would that happen? If the creditor doesn't want to work with the CCS or the debtor just refuses or is unable to live by the repayment plans. Additionally, this is waste money if you do end up filing for bankruptcy because only 20% of them are ever completed or even successfully negotiated (source: Get Out of Debt).

Bankruptcy has finality. Creditors can't "negotiate" or not want to deal with the bankruptcy if they are dischargeable; their debt will be discharged whether paid at 100% or paid at 0%.

The real question is a financial decision but many people turn it into a moral decision; it's not a question of ethics because bankruptcy is a legal process. If you personally want to try the debt management route, then by all means try that route. I think of these as purely financial decisions. If I could discharge $10K in 90 days my "personal" decision would be to discharge that gambling debt. Everyone is welcome to bash me or cry foul, but what did the casino(s) actually lose?

[chucho26]

I can't say which is better for you personally. Debt management, through a consumer counseling service (CCS) works in some cases, but most of those people end up in bankruptcy. Why would that happen? If the creditor doesn't want to work with the CCS or the debtor just refuses or is unable to live by the repayment plans. Additionally, this is waste money if you do end up filing for bankruptcy because only 20% of them are ever completed or even successfully negotiated (source: Get Out of Debt).

Bankruptcy has finality. Creditors can't "negotiate" or not want to deal with the bankruptcy if they are dischargeable; there debt will be discharged whether paid at 100% or paid at 0%.

The real question is a financial decision but many people turn it into a moral decision; it's not a question of ethics because bankruptcy is a legal process. If you personally want to try the debt management route, then by all means try that route. I think of these as purely financial decisions. If I could discharge $10K in 90 days my "personal" decision would be to discharge that gambling debt. Everyone is welcome to bash me or cry foul, but what did the casino(s) actually lose?

I met with my trustee today and we might go with a bankruptcy in the next few months. He is pretty confident that the creditor will NOT oppose my discharge knowing that I excluded myself from the casinos, will not have a lot of money to pay back, it will be my first bankruptcy, and I will not gamble anymore!