How to Clear Online Gambling Debt

The American Academy of Family Physicians (AAFP) reported that pathological gambling and online gambling debt affected between 5 and 15 million Americans. Not surprisingly, the incidence of gambling was highest amongst young people.

While only 61% of Americans had gambled in some way in the 1960's, this figure had grown to 80% by 1991. This is largely because gambling is now allowed in more states. In 1978, only 2 states allowed gambling. However, by 1998, only 2 states hadn't legalized gambling.

Seek Help with Your Gambling Addiction

Before online gambling debt can be tackled, it is absolutely essential that help is sought from a suitably accredited provider of pathological gambling help. Gamcare or Gamblers Anonymous (GA) are amongst the best known providers of such assistance. Until your gambling addiction in under control, tackling financial difficulties with a debt solution will not be effective.

Ways to Tackle Online Gambling Debt

Once your gambling addiction is under control, the time has come to identify an appropriate debt-free solution to clear online gambling debt. Gambling losses can be tackled with a debt settlement plan, filing for bankruptcy or a Debt Management Plan (DMP).

Debt Settlement Plan

This debt solution involves a careful negotiation process with creditors in order to write-off up to 50% of debt in order to reduce repayments. A monthly payment is then made for a period of 12 to 36 months; any remaining personal debt is written-off after the last payment has been made. Negotiations are carried out by a debt settlement company and a fee is payable for this service. Following a ruling by the Federal Trade Commission (FTC), fees can no longer be front-loaded.

Filing for Bankruptcy

It may be possible to clear your debts with chapter 7 or chapter 13 bankruptcy. Filing for bankruptcy under chapter 7 has the potential to clear your gambling losses in just 4 to 6 months. However, all of your debts mustn't be a direct consequence of gambling. If you have an income above the state median or non-exempt assets, such as stocks and shares, chapter 13 may be more appropriate. Most of your unsecured debt can be cleared over a 3 or 5-year period.

Debt Management Plan

A debt management company or intermediary will work with you to decide on an affordable monthly payment for your creditors. The objective is to reduce online gambling debt payments and spread the cost of repayment over a period of about 5 years. Most creditors will be prepared to freeze further interest payments and charges, although they aren't legally obligated to do so.

The first step towards dealing with online gambling debt is admitting that you have a problem and seeking help from Gamblers Anonymous (GA) or Gamcare. Once your gambling addiction is under control, seek assistance from a qualified debt counselor.

Sources

Lopez Viets VC, Miller WR. "Treatment approaches for pathological gamblers." Clin Psychol Rev 1997;17:689-702.

Disclaimer: This article in no way attempts to provide legal, financial or tax advice. One should consult a licensed attorney, tax advisor, or other qualified financial professional before proceeding.

Updated: 1 May 2011