Legal Question in Bankruptcy in California

Re: Gambling debt

There is no express exception from discharge for a gambling debt in the bankruptcy code, so generally, it is safe to say that a gambling debt can be discharged. Where you run into a problem, however, is that one category of debt that is non-dischargeable is debts incurred through "fraud, deceit, etc..." In theory, if you lied when obtaining the debt, they may seek to have the debt exempted from the discharge based upon this exception. I only raise this issue because I have seen casinos pursue non-dischareability claims on exactly that basis - that the debtor lied when he obtained the line from the casino about his or her income, assets or ability to repay. Secondarily, there are exemption categories for cash advances of a certain amount within a certain time frame before filing, and for debts incurred for the purchase of luxury items within a certain time frame before filing. In theory, an argument could be made that the gambling debt is either or both of these types of obligation. Before you file, have a qualified attorney review the facts surrounding this debt to determine if it is going to cause you any trouble.

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