Specialist Support for Debt confirm gambling debt can be included in bankruptcy petitions

A debt adviser requested assistance from Specialist Support for Debt (SSD) for a client with almost £25,000 of debts arising from a gambling addiction. 

The adviser had gained an overview of the client’s situation and talked him through his options. The client was keen to explore bankruptcy as it would give him a fresh start as he has no surplus income and it would help his mental health.
The adviser contacted Specialist Support for Debt to ask what issues there are surrounding gambling and bankruptcy.
SSD identified these issues for the adviser to consider:
If client has had a gambling addiction, which has contributed to the debt it would be wise to seek support from health professionals, a support group or confidential, free charities, GamCare and Gamblers Anonymous. They do not have to prove they have stopped gambling before they go bankrupt, but it is sensible for the client to be able to explain they do not intend to accrue further debt in future through gambling.
SSD confirmed gambling debt tends to show on credit card statements or transfers on bank accounts and large transactions where no assets are disclosed. This gambling debt is provable in bankruptcy petitions. It does not matter whether it built up because of an addiction or if they tried to win money to pay existing debts.
  • The client will be asked on the petition form whether they have incurred gambling debt in the last two years.
  • Once they have been formally made bankrupt, they will have to explain to the Official Receiver (OR) exactly why and how the debt built up. If they have lost money through gambling in the last two years, this must be declared on the bankruptcy forms.
  • However, if a large percentage of the debt is due to gambling (for example, 50% or more) it is possible a Bankruptcy Restrictions Undertaking (BRU) will be applied. This will extend certain restrictions for the client. The length of a BRU will be decided by the OR. The main restrictions that a BRU carries are –
    1. not being able to borrow money
    2. not being able to act as a Company Director.
  • When the OR is satisfied and the bankruptcy is approved it will be scheduled for 12 months, at this point it will be decided if it is to be extended with a BRU. The OR will also ask for previous 12 months of bank statements, which the adviser needs to have checked for evidence of recent gambling.
  • In the client’s interview with the OR it will be useful for him to be able to report that he is no longer gambling and explain or provide evidence about any help he is receiving to support him in regard to his conduct after making the Bankruptcy Order.
  • SSD reminded that advisers can signpost clients to the confidential, free charities GamCare and Gamblers Anonymous.
Extract from legislation The Insolvency (NI) Order 1989, which shows the risk of having a Bankruptcy Restriction Order – https://www.legislation.gov.uk/nisi/1989/2405/article/333/made
“….carrying on any gambling, rash and hazardous speculation or unreasonable extravagance which may have materially contributed to or increased the extent of the bankruptcy or which took place between [the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition] and commencement of the bankruptcy;
(section J)…”
To contact Specialist Support Debt Adviser Linda Wilson  Direct Dial: 028 9064 5919
Email: ssDebt@adviceni.net
Hours of work: Tuesday, Wednesday, Thursday 8am-5.30pm and Friday 8am-4.30pm