How to write off gambling debt
July 1, 2015
If you have built up debt from gambling, you may be able to write off part or all of the debt via a formal Scottish insolvency route. Not all insolvency solutions allow debts to be written off, but you may be eligible for a Trust Deed if you meet certain criteria, with sequestration also being a possibility in serious cases of debt.
How a Trust Deed can help you with gambling debt
A Trust Deed is an arrangement made with your creditors to repay an agreed proportion of the total sum owed. This might include other monies in addition to the gambling debt, but if some or all of the arrears are related to gambling, it is likely that you will need to address the gambling habit or addiction before a Trust Deed is granted.
Trust Deeds generally last for a period of four years, and will appear on your credit file for six years from the starting date. The advantages of this form of insolvency solution are many, however, if you can gain control of your spending and focus on repaying the proportion of debt agreed.
Sometimes proof is needed that you have not gambled for a period of time, and although this is difficult to prove with any degree of certainty, your Trustee may issue a request to see your bank statements for several months previously.
What is a Protected Trust Deed
A Trust Deed becomes ‘protected’ if your property is transferred to the control of a Trustee. Up until that time the Trust Deed remains unprotected in the sense that your creditors can still legally pursue you through the courts for payment, and this could ultimately end in bankruptcy.
Once the Trust Deed becomes protected, all action against you ceases – hence you are protected from creditors as long as the terms of the Deed continue to be met.
Extra measures for gambling debt
- You will probably be required to source external help for a gambling addiction, addressing the problem before the level of debt repayments are negotiated. If you refuse to do this, it is unlikely that your creditor will agree to a Protected Trust Deed, or have faith in your long-term ability to keep up repayments.
- As mentioned above, your Trustee may require ‘proof’ that your gambling has stopped – this could be in the form of bank statements or other records.
In some instances, you might be forced into bankruptcy by your creditor. In the case of gambling debt, if you choose to enter bankruptcy with a view to starting afresh, your circumstances will be scrutinised to see if you have spent or gambled recklessly in the time leading up to the bankruptcy application.
If this is found to be the case, an order that restricts you from entering bankruptcy may be issued, but in many cases once the problem has got this far, it is usually already being dealt with by the debtor.
Scotland Debt Solutions can advise on all types of debt, including those caused by gambling. Contact one of our expert team to arrange a free initial consultation.
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