Bankruptcy – gambling, excessive use of credit cards and blowing proceeds from sale of property – a dangerous cocktail!!

A recent Media Release by AFSA see link https://www.afsa.gov.au/resources/media-kit/media-archive/media-release-nsw-mcelwaine-nine-month-bond-for-offence-against-the-bankruptcy-act highlights the addiction of gambling and additionally that if forced into bankruptcy as a result of such gambling, then, in certain circumstances the individual may have committed an offence under Section 271 of the Bankruptcy Act. In this case, the individual went into bankruptcy voluntarily owing her creditors almost $440,000 using 22 credit cards. In the 12 months prior to her bankruptcy she sold property owned by her and claims to have blown almost $100,000 on gambling.
The individual was found guilty and placed on a 9 month good behaviour bond, as well as having other restrictions imposed.

As a Bankruptcy Trustee I have administered estates where gambling has been a cause of the bankruptcy. Whilst it has an impact of unsecured creditors via the high chance of there being no return to them, the other critical issue is discussing and establishing whether the individual (and possibly family members) has sought proper counselling. Otherwise the cycle may repeat itself in time. Whilst there are many organisations that do offer assistance and counselling, one service is the NSW Government Gambling Help Service or http://www.gamblinghelp.nsw.gov.au/ . It is a free gambling help counselling services for gamblers, family members and friends. It includes face-to-face counselling, financial counselling, a 24-hour Gambling Helpline (1800 858 858) and a 24-hour online Gambling Help service. Counselling and help are available in five community languages as well as English and there are also specialist Aboriginal programs.

Gambling can not only cause or result in significant financial hardship for the individual and their family, but critically it can lead to other extensions or behaviours as the financial crisis worsens. It is absolutely vital that if you are aware that a family member, friend or colleague may have such a problem you actively encourage them to get proper help.

As a Bankruptcy Trustee I am cognisant that individuals may find themselves in this precarious position and I believe that apart from assisting the individual in dealing with the financial crisis, they need to be pointed in the right direction to get help.

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