Excessive gambling debts result in nondischargeable debt.

Here, FCC National Bank, and several other creditors, objected to the debtor’s bankruptcy on the basis that the debtor borrowed money without any ability or intention to repay the debts.

Prior to the filing of bankruptcy, the debtor withdrew $40,000.00 from a trust account. She gave away $20,000.00 of that money and gambled away the balance of the funds.

Among the debts listed on her bankruptcy schedules was an $8,000.00 bill owing to a Las Vegas hotel for a hotel room; the debtor took her new husband to Las Vegas for their wedding and incurred additional gambling losses of nearly $3,000.00.

She also borrowed more than $28,000.00 from various creditors, of which most of those funds were used to pay gambling losses. And, the debtor misrepresented her income and the purpose for the loans on the loan applications.

The Court held in FCC National Bank et al. v. Vickie Bartlett (U.S. Bkrtcy. Court, W.D. Missouri, Case Nos. 90-42082-3; 91-4024-3; 90-4205-3; 90-4206-3; 90-4221-3; and 90-4207-3), that the debts owing by Bartlett were incurred without any reasonable intent to repay the same.

The Bankruptcy Code does not discharge a debt incurred by fraud or without an intent to repay that obligation. Here, intent to deceive was inferred from all the circumstances. Five creditors received nondischargeable judgments.

Author: Charles R. Harroun, Attorney at Law