Need straight talk on Ch 7

[beyondbroke]

I am in a horrible rut. Middle aged- all kids are educated and moved out.
I guess it was a mid life crisis but I got caught up in a gambling addiction that spiraled out of control.
It is so hard to admit what I have done to my life - even on an anonymous forum.
I won large sums of money and that’s what started the addiction and downward spiral. All of that money went right back to a casino x 5….
In the midst of the gambling crisis, I started an e-commerce business that was doing great, except I was taking every dime of profit and dumping it in a casino.
It was so bad, I would actually western union money to myself when I left credit and debit cards at home.
I have started taking steps like self exclusion and g/a meetings. I am fresh out of this but I have a ton of debt that I can not repay. Personal loans, credit cards, and a payday loan.
I have recently defaulted on all payments.
Nono of my credit is new. Most of my loans and credit are at least two years old.

At this point a Ch 7 is my only option out of this darkness.
I have paid about 1/3 of my attorney fees to file.
My business will be closed at the end of August and I won’t have much income at all- about $1400 a month.
I do not pay a lot of household expenses- my partner does.
I am utterly terrified for a trustee or even my attorney to see my bank accounts with hundreds and hundreds of gambling transactions.
Has anyone been in this position?

Thanks for listening

[beyondbroke]

I wanted to add a couple of things-

I have fears of my loans being contested. Both are two years old, they were pre approved with tax returns sent as income verification on one ( the largest) and income verification on the second one. I’m not worried too much about the credit card debt. No new charges, no luxury purchases, no new payday loans etc. I had closed all accounts and gone through credit counseling and reduced payments but loan payments were not included.

I also owe quite a chunk in taxes that I am currently paying.

[justbroke]

Welcome to BKForum!

First, I'm glad that you recognized that you have a gambling problem and that you have taken steps to self-exclude and to stop gambling. A bankruptcy will never fix a gambling habit and the Trustee will want to know that it is "out of your system" and that you have taken positive steps to avoid going down that path.

Second, your loans appear to be well-aged and you made payments towards them. Creditors that cry foul are usually looking at actual fraud where the debtor obtained loans on the eve of bankruptcy, or without the intention of paying back the loan. Without having those facts proven, it would take a miracle for a creditor to get a bankruptcy court to say that 2 years of payments on a loan show that you never intended to pay it back.

Third, it doesn't appear that you are currently using credit now that you know you are insolvent. Generally speaking, there is a presumption that you are insolvent 90 days before filing. It could be any longer, but the general rule is 90 days. From what you said I personally don't see any issue with making large purchased on the "eve of bankruptcy" (the 90-day insolvency rule). The fact that you're in credit counseling with the accounts closed does show that you want to pay back the creditors. I don't see an issue based on what you have stated.

Finally, you seem very contrite and show remorse. I don't think any Trustee will fault you for the gambling habit, but remember my first point. You have to keep going to GA and making sure you stay out of casinos or other places of gambling. The Trustee will likely need to hear those words and so will your attorney. I too did a bunch of gambling, but it wasn't the reason for my bankruptcy. I totally understand the excitement and dopamine from being in that environment. I've spent tens of thousands in casinos after a friend brought me to one in Puerto Rico. It took me 6 years to shake that habit. I hope you can get beyond this.

Once again, Welcome to BKForum.