The increase in casinos, race tracks, government run lotteries and other forms of legalized gambling has also caused an increase in the number of people that file for personal bankruptcy. For the average person a night at the slots is just a form of entertainment, but for an increasing number of Canadians it’s an addiction that eventually leads to financial ruin.
Unlike a job loss or marriage break-up, the Courts are taking the view that gamblers are responsible in part for their own situation. I’ll leave it to the mental health experts to argue against that position, what I’d like to do is inform those persons with gambling issues how they may be treated by the bankruptcy Court.
My first bit of advice – if you have the means try and file a consumer proposal instead of filing a bankruptcy in Toronto. The fact that you voluntarily offer to repay a portion of your debt may keep you out of Court altogether. For those unfamiliar with consumer proposals, they are a legal procedure whereby you offer to repay a portion of your debts – generally at least 25% or more of what you owe. You are probably wondering why anyone would agree to accept only 25% of what you owe them? Well, the most common alternative to a consumer proposal is to file bankruptcy. If you file for bankruptcy your creditors will receive even less than that so a consumer proposal makes sense.
If you can’t afford to repay a portion of your debt and you have to file for bankruptcy then you need to understand that, if a significant portion of your debt is due to gambling, it is likely that you will be required to appear in Bankruptcy Court at the end of the process. Once there you will have to prove to the Court’s satisfaction that you’ve got your gambling problem under control. The Court will want to see proof that you have excluded yourself from Ontario’s casinos and race tracks, and that you are attending counseling for your gambling addiction. As part of the process the Court will likely order that you maintain the exclusion and counselling for another 3 to 5 years. If you used credit cards to pay for your gambling then the Court will probably ban you from obtaining a new credit card, again for 3 to 5 years.
Finally, if a significant portion of your debt was a result of your gambling the Court will likely order you to repay a portion of the debt. Usually it is at least 10%, but can be higher, or as much as the Court feels is reasonable.
If you have issues with gambling please seek out a qualified gambling counsellor. If together we determine that either a consumer proposal or bankruptcy is required to set things right, please give us a call at 310-PLAN (that’s 310-7526, no area code required) or e-mail us and we’ll help you work through the process.
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