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Is bankruptcy worth the gamble?

We have probably all seen an advert on the TV or a pop up on the internet promoting online gambling sites.  A few of us may have an app downloaded on our smartphones so we can place a cheeky bet on the football every now and then.  But when do the odd bets here and there turn in to reckless gambling and what are the lasting lifestyle effects?

In recent years we have seen a steady increase in the rise of gambling driven by easily accessible online platforms.  For most a little flutter here and there will not have any long term financial implications but for some gambling can turn into a dangerous addiction, spiralling out of control, often affecting not only the individual but their family and friends also.

The consequences of racking up gambling debts can be financially devastating.  What started as a tenner a week may now be upwards of £100 a day, maxed out credit cards and loans, just waiting for that big win to pay it all off.  Chances are that pay day will never come and if these debts cannot be paid off, sooner or later it may be that bankruptcy is the only option left.  For some, the risk of bankruptcy does not seem to be a deterrent but instead a way to write off those gambling debts when they become unmanageable.  The implications may be seen as less of a burden than the spiralling debt.

In fact, this could be wrong.  In the last two years the Insolvency Service has clamped down on those who have become bankrupt due to gambling, speculation or unnecessary extravagance.  It has been reported that the number of Bankruptcy Restriction Orders (BRO) filed against gamblers has increased 150% in this time.

Before being discharged from bankruptcy there are a number of restrictions enforced against a debtor.  These restrictions affect the ability to obtain credit and could impact on the debtors working life.  If the Official Receiver concludes that someone has behaved dishonestly or recklessly a BRO may be made.

A BRO is a legal order from the court which extends the period of time for which a bankrupt has to follow the restrictions that were in place.  This includes being unable to obtain credit of more than £500 without disclosing details of the BRO, becoming a director of a company and limiting job opportunities within the financial industry.  The extended period can be anything from two to 15 years.  There could also be extra restrictions to follow, enforced by the BRO.

Creditors will be told about the BRO, details will also be publicly available via the insolvency register and the court will also issue a notice about the BRO in the London Gazette.  It is also worth noting that it is a criminal offence to break any of the BRO restrictions, and if breached there could be a substantial fine or even imprisonment.

With the likely future increase of Bankruptcies due to gambling, it is understandable that the Official Receiver will continue to take the view that restrictions should stay in force even after the bankruptcy has been discharged, if someone has been found to have acted dishonestly or recklessly.

If you or your clients are struggling to manage your debts and would like further advice please contact our office about the options available so that the worst does not happen.

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